NTC 2019 Demonstrating ROI
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TechBridge presentation from NTC 2019 in Portland, OR on a new tool developed to measure the return on investment (ROI) for technology-related investments to nonprofits. Includes case studies from Mercy for Animals, National Immigrant Justice Center, and Rainbow Village
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NTC 2019 Demonstrating ROI
- 1. DEMONSTRATING ROI ONTECHNOLOGY PROJECTS TO WIN APPROVAL FROMYOUR LEADERSHIPTEAM MARCH 13, 2019 (10:30AM - 11:45PM) PRESENTERS: KAREN CRAMER, SEANWILLIAMS, JULIATOEPFER, ELIZABETH QUICK #19NTCTECHROI ROI CALCULATOR
- 2. 2 AGENDA INTRODUCTIONS USING ROITO WIN FUNDING: CASE STUDIES HOWTO CALCULATE ROI ROI CALCULATOR: LIVE DEMO NOTE: ROI = RETURN ON INVESTMENT COLLABORATION NOTES URL: HTTP://PO.ST/TECHROI-19NTC
- 3. Todays Speakers Karen Cramer TechBridge Performance Measurement Group Leader Sean Williams TechBridge Nonprofit Operations Consultant Julia Toepfer National Immigrant Justice Center Marketing & Online Engagement Manager Elizabeth Quick Mercy for Animals Director of Development
- 5. 5 NATIONAL IMMIGRANT JUSTICE CENTER CASE STUDY The communications team at the National Immigrant Justice Center has received buy-in from leadership and secured project funding (including through grants) for a range of technology projects: website redesigns, professional videos demonstrating the organization's impact, funds for online advertising, and upgrading online engagement tools. Staff members successfully demonstrate to leadership and stakeholders the impact of technology projects in terms of concrete metrics, such as additional donations, new supporters, new volunteers, and ultimately show how the projects will advance the organizations core mission and goals. PROJECT ROI: ONLINE RESOURCE LIBRARY 2,040 STAFF HOURS SAVED PERYEAR - 255 WORK DAYS! (PROJECTED) 22 MO.TO BREAK EVEN FUNDRAISING LIGHTBOX 42 NEW DONORS IN LESS THANTWOWEEKS 31 DONORS REENGAGED $20,000 IN DONATIONS ONLINE ENGAGEMENTTOOL 25% INCREASE IN DONATIONS (ADDITIONAL $40,500 IN 3 MO.) 676 NEW EMAIL SUBSCRIBERS
- 6. 6 MERCY FOR ANIMALS CASE STUDY In 2018, Mercy For Animals won board funding to move from home-built systems to Engaging Networks and Salesforce. Engaging Networks serves as the primary email campaign manager and donation processing facility and is integrated to Salesforce which serves as the primary Constituent Relationship Management (CRM) system.The process included presenting a funding proposal that demonstrated ROI and a technical document explaining the migration. MFA partnered with a migration partner for these efforts and has saved a lot of money as a result of indirect cost savings. PROJECT ROI: BY INVESTING $216,000 IN NEWTECHNOLOGY, MERCY FOR ANIMALSWILL SAVE $776,300OVERTHE NEXT 5 YEARS . STATISTICS: 5-YEAR GAIN: $776,300 5-YEAR ROI: 359% MONTHSTO BREAK EVEN: 13 INCREASE IN SINGLE DONATIONS: 3% INCREASE IN RECURRING DONATIONS: 11%
- 7. 7 RAINBOWVILLAGE GEORGIA SUCCESS STORY Rainbow Village, a nonprofit based in Duluth, GA, transforms the lives of homeless families with children by providing a stable community and services that instill initiative, self-development and accountability for future generations. Through working withTechBridges Performance Measurement team, Rainbow Village now has a comprehensive data strategy defining the critical metrics Rainbow Village staff members need to lead resident families forward on the path to self- sufficiency. TechBridge also defined the business processes to implement a custom Salesforce client management system to enable Rainbow Village to report on these metrics in real time through the click of a button resulting in annual savings valued at $18,900 per year through reducing staff member time required to manually enter, aggregate, and report on client metrics. PROJECT ROI: BY INVESTING $30,000 IN NEW TECHNOLOGY, RAINBOW VILLAGEWILL SAVE $83,475 OVERTHE NEXT 5YEARS . STATISTICS: 5-YEAR GAIN: $83,475 5-YEAR ROI: 178% MONTHSTO BREAK EVEN: 22 REDUCTION OFTIME SPENT ASSESSING CLIENTS: 50% REDUCTION OFTIME SPENT ON GRANT REPORTS: 566%
- 8. 8 HOWTO CALCULATE RETURN ON INVESTMENT (ROI)
- 9. 9 TECHBRIDGE EVOLUTION OF CALCULATING ROI 2001 TechBridge holds first annual Digital Ball. Begins funding and completing individual IT projects for nonprofits and reporting back on results to Atlanta CIO community. 2015 TechBridge raises $71,500 in crowdfunding dollars to fund custom Salesforce case management system for Atlanta Mission. Effectively decreases average time for daily client intake from 3 hours to less than 1 and transforms organizations ability to measure and report on key program metrics. 2017 TechBridge establishes Dream Big Fund in Georgia, Alabama, and Tennessee, facing increasing pressure to measure and report on collective impact of investments at the community level. 2018 TechBridge formalizes process to capture and report on project success through development of the ROI Calculator, requires all TechBridge projects to estimate project ROI at project kickoff. Rainbow Village wins additional foundation funding to implement Salesforce Case Management solution. 2019 TechBridge presents at NTC 2019 in Portland, OR
- 10. 10 METHODOLOGY PART 1: PROJECT COST METHODOLOGY PART 2: ANNUAL SAVINGS METHODOLOGY PART 3: ROI ANALYSIS MEASURING ROI: CALCULATE COST
- 11. 11 THREE ELEMENTS OFTECHNOLOGY COST 1. Design 3. Maintain 2. Build A New Home A New Technology $ Monthly Budget Bills & HOA Dues Make repairs Pay for new additions $ Hire builders Build the house Inspect the house Furnish the house Move In $ Hire architect Receive blueprints Understand cost to build Determine home value $ Hire technology consultants Receive business process maps Understand project cost Understand project value (ROI) $ Hire engineers Develop the system Test the system Train on the system Adopt the system $ Monthly Budget Hosting & Licensing Fees Technical Support Pay for new additions METHODOLOGY PART 1: PROJECT COST
- 12. 12 METHODOLOGY PART 1: PROJECT COST System Design Key Considerations: Multiply total hours identified under staff time by average hourly wage to translate units from hours to dollars. Document business processes, best practices, and opportunities for time savings through automation before investing in major technology to get an estimate you can trust and ensure effective change management. New Technology + Old Processes = Really Expensive New Technology
- 13. 13 METHODOLOGY PART 1: PROJECT COST Key Considerations: Multiply total hours identified under staff time by average hourly wage to translate units from hours to dollars. Hire additional staff needed to fill System Administrator role before project kickoff. Dont forget to account for overlap in licensing fees when making major system migration. System Build
- 14. 14 METHODOLOGY PART 1: PROJECT COST Key Considerations: Empower your employees and save time & money with a three-tier support model Hire a professional for major system upgrades Reduce or eliminate hosting fees with donated licenses from companies such as Salesforce or Microsoft System maintenance is a recurring cost that will impact annual savings System Maintenance
- 15. 15 METHODOLOGY PART 1: PROJECT COST METHODOLOGY PART 2: ANNUAL SAVINGS METHODOLOGY PART 3: ROI ANALYSIS MEASURING ROI: ESTIMATING BENEFIT
- 16. 16 METHODOLOGY PART 2: ANNUAL SAVINGS Dollars Savings Hours Savings Total Annual Savings $$$ Indirect Savings: 1. Estimate savings in staff time spent: Hours saved entering, managing, and cleaning up data Hours saved developing internal reports and reports to funders Hours saved developing Board Reports and Annual Impact Reports 2. Multiply total hours saved by average hourly wage 3. Convert all calculations to annual savings in USD Direct Savings: 1. Estimate savings (or increase) in recurring costs: Dollars saved in hosting fees Dollars saved in licensing fees Dollars saved in support fees 2. Convert all calculations to annual savings in USD
- 17. 17 METHODOLOGY PART 2: ANNUAL SAVINGS Direct Savings Example Annual Cost Old System New System Hosting Fees $1,000 $0 Licensing Fees $0 $500 Support Fees $2,500 $1,000 Total: $3,500 $1,500 Dollars Savings = $2,000 per year
- 18. 18 METHODOLOGY PART 2: ANNUAL SAVINGS Indirect Savings Example Estimated Annual Staff Time (Hours) Old System New System Data Entry 200 100 Data Management 50 25 Data Cleanup 10 2 Developing Internal Reports 120 24 Developing Funder Reports 200 80 Developing Board Reports 80 40 Developing Annual Impact Report 100 50 Total Hours: 760 321 = $10,975 per yearHours Savings Approximate Hourly Wage $25 $25 Dollar Value of Hours $19,000 $8,025 ConverttoUSD
- 19. 19 METHODOLOGY PART 2: ANNUAL SAVINGS Dollars Savings Hours Savings Total Annual Savings $$$ Indirect Savings: Direct Savings: $2,000 $10,975 $12,975 Total Annual Savings: Putting it all together
- 20. 20 METHODOLOGY PART 1: PROJECT COST METHODOLOGY PART 2: ANNUAL SAVINGS METHODOLOGY PART 3: ROI ANALYSIS MEASURING ROI: ANALYZE RESULTS
- 21. 21 METHODOLOGY PART 3: ROI ANALYSIS Metric Calculation Notes # Months to Break Even (Project Cost) / (Annual Savings / 12) Consider investing in smaller technology projects with faster rate of return to build momentum and confidence in leadership team 5-Year Investment Gain (Annual Savings * 5) (Project Cost) Only do the project if this number is positive! 5-Year ROI (5-Year Investment Gain) / (Project Cost) * 100% Calculates investment gain as a percent, accounting for amount of project cost 5-Year Increase in Clients Served (5-Year Investment Gain) * (Avg. Cost per Client) To calculate average cost per client, divide your organizations annual budget by the average number of clients served in a year (the cost per client should decrease after a successful project) Mission ROI (5-Year Investment Gain) * (Outcome Measure Cost) Consider how organizations mission metrics are impacted by project savings Use a tool such as Low Income Investment Funds Impact Calculator to translate project success into economic impact on community Standard ROI Metrics & Calculations:
- 22. 22 Cost Cumulative Annual Savings Total Investment Gain Year 1 $190,000 $81,485 ($108,515) Year 2 0 $162,970 ($27,030) Year 3 0 $244,455 $54,455 Year 4 0 $325,940 $135,940 Year 5 0 $407,425 $217,425 METHODOLOGY PART 3: ROI ANALYSIS 5-Year Investment Gain (~114.4%) IT Project Cost Annual Savings Break Even (28 Months) Sample ROI Trend:
- 23. 23 METHODOLOGY PART 3: ROI ANALYSIS Sample Output from TechBridge ROI Calculator:
- 25. 25 RESOURCES Generic ROI Calculator by calculator.net TechBridge GA Social Impact Collaborative blog post on Measuring the ROI of Technology Investments Practical Guide to Developing and Maintaining and Nonprofit Data Strategy Nonprofit Finance Fund: Types of nonprofit capital Ten Financial Lessons for Nonprofits and Funders Financial scorecard metrics Financial projection tool Video on Outputs vs Outcomes Low Income Investment Fund (LIIF) Social Impact Calculator Graphics Credit: Icons made by SmashIcons at www.flaticon.com
- 26. 26 Speaker Contacts: Karen Cramer: kcramer@techbridge.org Sean Williams: swilliams@techbridge.org JuliaToepfer: jtoepfer@heartlandalliance.org Elizabeth Quick: lizq@mercyforanimals.org ThankYou! Thanks for joining us today and please remember to fill out your session specific survey! 際際滷s available in the collaboration notes http://po.st/techROI-19NTC
Editor's Notes
- #10: 2001 first digital ball 2015 atlanta mission 20? dream big 2018 ROI cal
- #13: Tell Cy Fenton Story Tell Todd Holcolm Story Julia: A note on funding for tech projects: pursue tech-specific grants- may be less readily available, but may be easier to get buy-in from leadership
- #22: Julia:油Start small- demonstrate success on a small scale to build trust and clout, and then move to bigger investment projects Julia: Make sure you have everything in place to track these benefits when the project is underway. Set clear goals BEFORE the project and be prepared to track- easier to measure your progress toward goal & better demonstrate success