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Calculating ROI Of Technology Investment
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How to Measure the ROI of Nonprofit Board Software


Making the decision to invest in any technology for your nonprofit can be tricky, particularly if it’s hard to quantify the return on that investment. You don’t want to pay out for software that doesn’t deliver benefits and good value.

Have you been considering board management software and need to get the rest of the board to understand its benefits? This article outlines how to measure the ROI of nonprofit board management software so you can bring a clear business case to your next meeting.

The Cost of Board Meeting Inefficiency

Board meeting inefficiency can result in lost time, errors, and even risks – insecure data or bad decisions due to not having the right data to hand.

Inefficient processes slow down workflows. The slower processes go, the more money nonprofits lose.

Inefficiency means board trustees and staff lose time. What many boards fail to account for is the many minutes that can be lost within a day. It may not seem like much when one person loses a few minutes here and there, but it starts to add up when you multiply the minutes lost by many people.

Inefficient processes also negatively impact the morale of your volunteer board, employees and volunteers. Low morale can cause people to work more slowly, and possibly, lose faith in the nonprofit and its leadership.

Conversely, more efficient processes help keep everything up to date, thereby decreasing risks. Board members and staff won’t spend as much time backtracking to retrieve data.

Moreover, technology gives boards more data and better data, which can be used to make better decisions for the nonprofit. Better decisions save the nonprofit time and money and improve the nonprofit’s reputational status as well.

When it comes to reputation, there is a lot to lose, considering nonprofits are accountable to donors, stakeholders, and the community at large.

The value of board management software really does pay off in efficiency terms but it also provides other benefits that can more than justify its cost.

On the other side of the coin, not having board management software brings another set of hidden costs and risks. Among others, these risks include:

  • Potential data breaches and reputational risk. Donors and supporters want to know that your organization is taking the necessary steps to keep data safe. Nonprofits and charities need to make cybersecurity and donor data safety a top priority.
  • Risk of making the wrong decision. If your board makes a wrong decision because board members didn’t have the right information, the cost implications can be enormous.
  • Material security. According to Forrester, who interviewed representatives of organizations using Diligent Board Leadership & Collaboration software, interviewees shared that board and committee materials and communications contain very sensitive information, and they viewed the need to print or email materials as a security risk.

How to Evaluate the Benefits of Board Management Software

In making the case for board software, you have to look at the outcomes and benefits of the software versus the software itself.

The most basic formula will give you a starting point for calculating the ROI of software:

The Benefit of Investment in the Software — Cost of the Investment
____________________________________________________________      X 100  =  ROI of the Software

Cost of the Investment

As a simplified example, if your nonprofit saved $10,000 because of investing in board management software and you made an investment of $5,000 on software, you would subtract $5,000 from $10,000 to get the top number which would be $5,000. Then, divide by 5,000, which gives you 1. Now, multiply that by 100, and it gives you a 100% return on your investment.

While the investment cost is easy to calculate (your board technology software partner should give you a quote for those costs), the benefits of ROI improving software can be harder to figure out. It is easier to assess the benefits when you break them down into hard and soft benefits.

Hard Benefits of Board Management Software

What are the hard benefits of board management software? The easiest metric to calculate is outcomes resulting from better efficiency, usually measured in costs and/or time saved.

Start with working out how much time you could save on board meeting management.

Here you will need the hourly wage of your board admin or secretary and the number of board meetings per year.

Then quantify the time spent on activities and expenses for each board meeting.

So, for example, before, during and after board meetings there’s usually time spent on

  • preparing and gathering information
  • version control (updating documents, reprints and send)
  • collecting feedback (sending out reminders and checking the documents)

You can also quantify costs such as printing, packaging, courier etc.

Forrester has quantified approximately 50% to 60% time savings for board and committee material creation, this includes preparing and distributing board and committee materials for monthly and quarterly meetings which requires substantial effort from governance professionals.

They estimate annual time savings to create and share board and committee materials for an average organization to be 600 hours.

Forrester also cites time savings for IT administration of board management software. Organizations can nearly or completely eliminate time spent on ongoing IT support activities for board management software because product administrators are able to manage board and leadership collaboration themselves without needing IT support.

There may be additional savings made if you are switching to a better solution with reduced risk costs and reduced software subscription and support costs.

Other hard benefits include:

  • Saved time from simplifying workflow processes for your organization
  • Quicker training of board members and support staff in key areas
  • Faster reporting

What about Soft Benefits?

Soft benefits are more intangible. They are harder to quantify in dollars and cents. Nonetheless, soft benefits are no less important than hard ones and should be taken into account when calculating your ROI measurement.

What kinds of factors are considered soft benefits? The following list should give you a start:

  • Improved board and committee member and donor perception of the organization. Your nonprofit is demonstrating its commitment to following best governance practices.
  • Improved board engagement, responsiveness and satisfaction. According to Forrester, organizations can expect better response rates from board and committee members because the technology is user-friendly, engaging, and reminds them to approve items and vote on resolutions etc.
  • Quicker reporting from committees to help inform the board. Committee reports can be uploaded into the board area keeping the board informed.
  • Better data to inform decisions. By reducing the time and effort it takes to create and update board and committee materials and by improving user adoption, administrators can share the latest materials with board members faster. This allows executives more time to review materials and have richer conversations in their meetings, leading to better decisions.
  • Better onboarding and everboarding. Providing pre-induction materials to new board members while making important materials available to existing board members to keep them up-to-date on key areas for governance, compliance and risk.
  • Improved security of sensitive board materials.
  • Partnership with your software vendor. By collaborating with a vendor like BoardEffect, your organization can leverage expertise in the governance, risk, and compliance (GRC) space, gaining access to valuable insights and best practices, with new opportunities for learning and growth.

The ROI is Proven

With clear-cut calculations along with strong arguments on both the hard and soft benefits, a case for investing in board management software is straightforward to make. In fact, the question might be, can you afford not to invest in it? With challenges such as cybersecurity, regulations and compliance, keeping board volunteer members active and engaged, there’s a lot for nonprofit boards to manage.

BoardEffect provides many valuable benefits for nonprofit organizations, from secure communications, easy access to key documents, streamlined agenda and meeting management, and peace of mind against evolving risks and potential costs.

Jill Holtz

Jill is a Content Strategy Manager at Diligent. Her strategy background and content expertise working across a variety of sectors, including education, non-profit and with local government partners, allows her to provide unique insights for organizations looking to achieve modern governance.

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