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Technology can help nonprofits manage rising operating costs when it removes a specific source of avoidable work—such as repeat data entry, manual reporting, or disconnected systems—and the full cost of adopting it is lower than the value it delivers. It is not an automatic cost-cutting measure: software, setup, migration, training, security, and staff time all count. Start by measuring one costly process, then pilot a focused change and assess both its financial impact and its effect on services.
Where technology may ease cost pressure
Nonprofits face pressure from rising program costs and staffing challenges, but technology is useful only when it addresses a concrete operational problem. Sage’s 2025 survey found that program participation and costs had reached their highest levels in the report’s five-year history, and described staffing as the sector’s most pressing challenge. These are survey findings, not a census of every nonprofit. The report also found that 85% of respondents recognized the importance of metrics, while 9% considered their organizations highly data-driven. Sage’s 2025 Nonprofit Technology Impact Report points to a gap between valuing data and using it consistently.
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Technology is most promising where staff repeatedly move the same information, assemble routine reports by hand, or wait for data held in separate systems. Momentive’s 2026 survey of 500 U.S. nonprofit and educational organization executives—each from an organization with at least $500,000 in annual revenue—found that 48% cited repetitive administrative work as a top technology frustration, 42% cited manual data entry across multiple platforms, and 41% cited difficulty accessing real-time data and reports. The survey was conducted May 1–14, 2026; its percentages describe that sample, not all nonprofits. Momentive Software’s survey release identifies pain points, but does not show that a particular tool will solve them or save a specific organization money.
Processes worth examining
- Repeated data entry: Staff copy information among finance, donor, grant, or program systems. Check whether a better-integrated workflow can reduce duplication without creating more reconciliation work.
- Recurring reports: Teams compile the same figures manually for internal decisions, funders, or board reporting. A consistent data source or automated report may reduce preparation time, provided the underlying data is accurate.
- Disconnected workflows: Information is hard to find or arrives too late for a decision. A system that connects the relevant steps may improve access, but integration and migration have costs of their own.
- Equipment replacement: Hardware is a real budget category, but buying new equipment is not inherently a cost-saving strategy. Consider repair, reuse, support needs, and replacement timing alongside purchase price.
How to tell whether a technology change will cost less overall
Compare the proposed change with a measured version of the current process. Include both direct expenses and staff effort; a subscription price alone does not show whether a tool is affordable over its useful life. ServiceNow’s 2024 nonprofit report discusses digital transformation and potential mission impact, but its quantified impacts are company economic modeling, not guaranteed savings or measured results for an individual organization. ServiceNow’s 2024 report can suggest dimensions to evaluate, not a forecast for your budget.
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- Purchase and recurring fees: Record subscription or license costs, renewal terms, and any expected price changes.
- Implementation: Include setup, configuration, integration, data cleanup, and migration effort.
- People and training: Estimate staff time to learn, operate, maintain, and troubleshoot the system, plus vendor or outside support.
- Risk and controls: Account for security, privacy, compliance, accessibility, and data-export needs. Confirm that controls and support meet the organization’s requirements.
- Current-process baseline: Measure time spent, delays, error correction, and any other direct costs for the workflow being considered. Compare like with like over a defined period.
Do not count every hour saved as cash savings: staff time may instead be redirected to programs, fundraising, or other necessary work. That can still be valuable, but distinguish released capacity from a reduction in actual spending. Set a target that reflects the intended outcome—for example, fewer hours preparing a report or shorter processing time—and check that service quality does not deteriorate.
A practical way to evaluate and pilot a change
- Map one process before shopping. Record who performs each step, how often it happens, how long it takes, where errors or delays arise, and which systems are involved.
- Choose one pain point and establish a baseline. Use a measurable indicator, such as hours spent on a recurring report, duplicate-entry steps, processing time, or the time needed to access grant or program information.
- Compare options against the real workflow. Assess total cost, fit with accounting, donor, grant, and program processes, integration, migration, training, accessibility, privacy and security controls, reporting, data export, and vendor support.
- Name an owner and set a bounded pilot. Choose a small group or process, set a realistic schedule, train participants, and define a success measure and a review date before launch.
- Review results before expanding. Compare the pilot with the baseline, include staff feedback and service quality, and decide whether to stop, adjust, or scale. Budget for ongoing administration and renewals; periodically check for unused features, overlapping licenses, and changed workflows.
Implementation capacity itself affects cost. The Chronicle of Philanthropy reported on a 2025 Clarion Research survey of more than 350 nonprofit leaders: nearly 9 in 10 said technology was vital to fundraising, while most said they spent less than 3% of their budgets on it. Respondents also cited budget constraints, limited in-house expertise, and insufficient time to vet and implement tools as obstacles. These survey results should not be read as proof that a larger technology budget automatically produces better outcomes. The Chronicle’s survey coverage underscores why a named owner, manageable scope, and staff time for implementation belong in the cost calculation.
Prioritize fit and capacity, not spending more
Technology budgets vary substantially across nonprofits. NTEN and Heller Consulting’s 2024 Digital Investments Report found that 54% of survey respondents listed hardware and equipment among their technology-budget spending categories. That is a share of respondents naming a category—not the share of budgets spent on hardware, and not evidence that new equipment reduces operating costs. The report also cautions against treating higher spending as a simple proxy for adoption or effectiveness. NTEN’s 2024 report supports prioritizing investments by need and likely use, rather than buying equipment or software because it is available.
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The available figures come from surveys with different samples and definitions, so they should not be compared as one trend line or treated as audited cost studies. They can help identify questions to ask, but they cannot establish the return on a specific purchase. No universal cost-saving amount follows from adopting automation, AI, new hardware, or a software platform. The strongest basis for a decision is a local baseline, a complete cost estimate, and a pilot that measures the outcomes the organization actually needs.
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