Cloud computing promises lower technology costs and greater efficiency and productivity. Yet many nonprofits have yet to move to the cloud, possibly because their staffs are smaller, their IT expertise is limited or they’re simply so focused on their mission that they don’t have time to consider new technologies. Fortunately, cloud computing is a fairly simple concept that’s relatively easy to adopt. Here’s what your organization needs to know.

Remote control

Cloud computing, also known as “software as a service,” uses a network of remote third-party servers made available online. Rather than relying on your organization’s own computers or server, you remotely share software and storage to process, manage and share information. You’re probably familiar with webmail services such as Gmail or Yahoo Mail. These are, in fact, cloud computing alternatives to hosting email on your own server.

For many nonprofits, the greatest advantage of using cloud services is lower costs. The technology generally eliminates pricey contracts and per-user licensing fees. Instead, cloud customers typically pay a monthly subscription fee or are billed based on actual usage. What’s more, service providers update their offerings and provide security patches on an ongoing basis. Also, most cloud platforms make it easier to track and report funds over multiple time periods, analyze budgets, expenses and cash flows, and produce specialized data reports.

Another benefit — particularly for nonprofits that are growing or shrinking or that have fluctuating technology needs throughout the year — is the scalability of cloud services. You can scale up when you need more storage or data capacity and scale back when you need less. Also, because cloud services aren’t limited to a physical location and can be accessed from anywhere, they make it easy for colleagues, board members and volunteers to collaborate on projects.

Rest assured

For some nonprofits, uncertainty about the security and privacy provided by cloud services has given them pause in the past. But most reputable services now boast better protections, including firewalls, authorization restrictions and data encryption, than your own nonprofit could afford to put in place on its own. And cloud services typically offer continuous data backup and disaster recovery capabilities, so you don’t have to worry about losing important records related to donors, employees and your organization’s finances due to a physical server failure.

That said, your nonprofit can’t possibly have as much control over a cloud system as it would of its own infrastructure. So if control is a priority, you need to weigh it against the other benefits of cloud computing.

Vendor options

To find a cloud computing vendor, seek recommendations from other nonprofits, IT experts and professional advisors such as your CPA. You’ll want to look for a service that:

• Frequently updates features,
• Immediately responds to security threats,
• Protects the privacy of your data,
• Backs up data in multiple locations around the country, and
• Allows you to retrieve all of your data in a nonproprietary format should the service go out of business.

Cost is another major consideration when selecting a vendor. But your nonprofit may qualify for discounts or even gratis services. Last January, for example, Microsoft pledged to donate $1 billion in Microsoft Cloud services to nonprofits over a three-year period.

Get satisfaction

Before leaping into the cloud, be sure to research your options. Once you’ve selected one, plan to regularly revisit your decision. If, after a year or so, you’re not satisfied with your cloud service, look into alternatives.

BPM for Nonprofits

BPM is one of the largest California-based accounting and consulting firms, ranking in the top 50 in the country. It has served the San Francisco Bay Area's emerging and mid-cap businesses, as well as high-net-worth individuals, since 1986. Our Nonprofit services group, one of BPM’s most established practice groups, consists of over sixty professionals across our tax, assurance and consulting practices. One of our founding goals was to make a difference in the manner nonprofits were served by our profession. Each member of our group brings differing expertise from our tax, audit, consulting and accounting departments – together we provide a comprehensive understanding of the functions needed to operate a nonprofit organization. For more information, contact Daniel Figueredo at (415) 288-6284 or Shannon Winter at (408) 961-6308.