Cloud Computing for Not-for-Profits: An overview of the benefits and risks of cloud technology in not-for-profit organizations.

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1 Cloud Computing for Not-for-Profits: An overview of the benefits and risks of cloud technology in not-for-profit organizations Samantha Long Canisius College

2 Long 2 Executive Summary Not-for-profit organizations, especially larger ones, rely heavily on databases and other information systems to manage their fundraising efforts, constituent relations, and other organizational operations. Within the not-for-profit sector a lack of adequate funding and technology savvy personnel are often major setbacks when it comes to meeting such IT needs. However the emergence of cloud technology over the past several years has offered a potential solution to these long-standing issues within the public sector. Of course this new technology des not come without risks or setbacks and non-profit leaders should be aware of these prior to investing in this new technology. While it may be the perfect solution to IT needs in some organizations it may not be right for others, but there are a lot of resources out there to help non-profit organizations make that decision, some of which will be discussed in case studies throughout this paper.

3 Long 3 There are many different definitions out there for the term cloud computing. Some are very broad and others are very narrow. According to InfoWorld.com cloud computing encompasses any subscription-based or pay-per-use service that, in real time over the Internet, extends IT's existing capabilities. This definition is based on what IT always needs; increased capacity and capabilities without new infrastructure, software licenses, or personnel (InfoWorld.com). Cloud computing has both benefits and risks that need to be considered by an organization prior to converting to cloud-based applications. The benefits of cloud computing for non-profits include lower IT costs, less of a need for IT personnel, a reduced carbon footprint, and greater capacity, choice, and flexibility when it comes to IT decision making. With cloud computing an organization can more easily grow or downsize without wasting, or having a lack of, IT resources. With pay-per-use and subscription based services it is easy to adjust your IT expenditures to meet your organizations immediate needs. (Hoffmann) Organizations have more choice when it comes to picking which applications will best serve their needs, as opposed to being stuck with traditional application suites. Another potential benefit is increased productivity. If employees are spending less time dealing with IT issues they can focus on the really important work at hand. It is important, when making this decision, for an organization to assess whether cloud computing or traditional desktop applications will best serve their needs for specific tasks and functions. Questions an organization should ask when considering cloud technology as an IT solution include: How many people will be using this application? Does the cloud version of the application have the same functionality and controls as the desktop version? Do staff members need to access these applications outside the organization, or would it be beneficial to the organization for them to be able to? Would a combination of both the cloud and desktop applications be the most beneficial route for the organization? Many times the cloud version of an application does not have the same functionality or controls as the traditional desktop version. (Techsoup.org) Many not-for-profit organizations store sensitive and confidential client information. For this reason, security is a huge concern especially when it comes to the consideration of storing this information in a cloud database. Doing so could put confidential data at risk. How confidential the data an organization stores is something to consider before moving to the cloud. Organizations also need to consider that thy will have to rely on an Internet connection to access these applications and get their work done. They also need to trust the company they chosen to get their services through to maintain the infrastructure and keep everything updated.

4 Long 4 Most non-profit organizations need to keep track of several different groups of constituents like their donors, beneficiaries, and volunteers. Managing and maintaining good relationships with individuals in theses groups is vital to accomplishing the goals of the organization. Many non-profit organizations store information on each of these groups in a different place (e.g. a fundraising database, a spreadsheet, or a filing cabinet). However many organizations are beginning to realize that assembling and managing all of these contacts from one place, such as a cloud based CRM, can have a huge impact on how they are managed and maximize the impact of each of those relationships. ( Harmon) TechSoup.org s Jim Lynch has made some predictions about where cloud technology will take the not-forprofit sector over the next several years. In an article he outlines five trends we should expect to see develop. Lynch predicts that more and more applications and services will become cloud based and over the next decade organizations will be in a state of hybrid cloud adoption. Meaning most organizations will be using a combination of both traditional in-house, and cloud based software. He also notes that the shift to the cloud will be very gradual, as there is not yet an IT system that is fully hosted in the cloud. Organizations will slowly start to adopt cloudbased applications like a database or online meeting service. Although cloud computing will reduce software, hardware and IT costs, many nit-for-pro=fits receives these through donations, and therefore may not reduce costs as much by switching to the cloud just yet. One example of a non-profit organization that has benefited from switching some of their business processes to cloud-based applications is Benchmark Family Services. Benchmark Family Services is a non-profit organization headquartered in Ohio. Benchmark is a provider of therapeutic foster care operating in six states. They screen families, place children in appropriate homes, and provide case-management services at more than thirty locations throughout those six states. Because of the sensitive nature of the work they do and the confidential information they keep (i.e. medical records and case notes), network and information security are vital. Because of this Benchmark Benchmark uses Symantec MessageLabs Security.Cloud and Symantec Endpoint Protection.Cloud, which they beta tested for Symantec in 2010, to ensure security. By using these cloud-based services Benchmark has been able to block 700 spam/malware/inappropriate a month from entering employees inboxes, save 20 hours of IT time dealing with problems that would have arisen because of those s, and save 10 hours a week that would have been spent managing the antivirus servers. The new, hosted antivirus solution, which replaced

5 Long 5 Symantec s traditional antivirus software, eliminated the need for Benchmark to manage an antivirus server in each of its 30 sites. Hanrahan used to spend 10 hours a week doing so and now he spends just a few minutes a day checking the security of their hardware. The majority of the organization s employees are social workers and as described by Benchmark s CIO Jason Hanrahan, not the most tech-savvy individuals. An issue non-profit organizations face. Another success story for cloud computing in a non-profit organization is that of the Metanexus Institute, which saved $176,000 a year by switching to a cloud-based data management system and a cloud-based customer relations management system. The Metanexus institute is a works to promote interaction between religion and science through publications and symposia at universities around the world. (Grassie) As many non-profits have over the past several years, the Metanexus Institute has had to make budget and staff cuts due to a lack of funding and expensive IT infrastructure necessary to operate. After making several big changes to move their business processes to the cloud Metanexus had reduced their monthly IT expenses from $5,000 to $300 and saved an additional $10,000 per month because they no longer needed IT staff. In all they were able to save $176,000 a year by taking advantage of cloud computing and the free services offered o non-profits by many of the big name cloud providers. (Grassie) The first step Metanexus took was to move the 400 gigabytes of data they had stored in their computer file server to a cloud-based data management system. They now pay $50 a month for Egnyte cloud services. Another major change Metanexus made in order to accomplish these savings was to switch from a paid outside service who managed their Microsoft Exchange Server, desktop It support, and remote backups, to Google Apps, which happens to be free for non-profit organizations. In order to completely discontinue use of their in-house servers, which consumed about $350 a month in electricity, Metanexus had to also convert their CRM data from Filemaker, to a hosted CRM database. Metanexus was able to accomplish this at no cost as well. The Salesforce Foundation offers a free web-based CRM database to eligible non-profits. This service would have normally cost around $1,500 a month. Metanexus also made changes to their phone/internet services, which were costing them around $365 a month. Since they had downsized from 10 employees to 4, they were planning on downsizing their office or jettisoning the office completely as key staff members live in geographically dispersed areas. (Grassie) However they would still need a phone system to conduct their business. For $45 a month they received four phone lines from Toktumi, who provides a virtual systems that works through employees laptops. There is also a free app

6 Long 6 that can turn their personal Iphone or Android into their office line. Metanexus also moved all of their accounting data from the traditional desktop QuickBooks software (which could only be stored and viewed on one person s laptop) to QuickBooks Online, where all employees could safely view the organizations accounting information. All of these changes not only saved the organization a substantial amount of money but also allowed their office to be completely portable. It is clear that cloud computing it where organizational IT is headed, though it will be a gradual process, especially for smaller organizations like not-for-profit ones. It seems that the benefits outweigh the risks for most organizations and certainly outweigh the costs in comparison to traditional IT infrastructures as seen in the case of Metanexus Institute. In his article about Metanexus William Grassie said, The problem with computer technology is that it is always changing. Early adopters often make expensive mistakes. It s easy to get locked into a system, which makes it more and more difficult to change, but change we must. Organizations need to be willing to take some risk in order to reap the benefits that Metanexus Institute and Benchmark Family Services have. There are a ton of resources and services out there, many of which are free for non-profit organizations, that can help them through these changes, saving them time, money, resources, and hassle. If organizations make the proper assessments and take he proper steps they can increase productivity and focus on their missions, their reasons for existing that make their communities a better place.

7 Long 7 Works Cited Benchmark Family Services: Cloud-based and Endpoint Security Keeps People People Productive. Symantec Corporation Gruman, Galen & Knorr, Eric. What Cloud Computing Really Means. InfoWorld. < Grassie, William. How a Small Non-Profit Made Simple Tech Tweaks and saved $176,000. The Chronicle of Philanthropy. February 20 th, < Harmon, Elliott. CRM in The Cloud: Right For Your Organization? Techsoup.org. October 25 th, < Hoffmann, Rem & Jordan, Rob. Cloud Computing 101: What You Need to Know. Nonprofit Technology Network. June 18 th, < Lynch, Jim. Cloud Basics for Non-Profits and Libraries. Techsoup.org. November 2 nd, < Polka, Laryssa. Non-Profits Overcome Cutbacks With Cloud Database Apps. Caspio Blog. December 5 th, < Why Should Non-Profits Care About Cloud Computing? Techsoup Blog. December 7 th, <

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