The Strategic Use of Information Technology by Nonprofit Organizations: Increasing

Capacity and Untapped Potential

Darrene Hackler; Gregory D. Saxton

Darrene Hackler and Gregory D. Saxton. (2007). The strategic use of information technology by nonprofit organizations: Increasing capacity and untapped potential. Public Administration

Review, 67(3), pp. 474-487.

Abstract: How are nonprofits using information technology (IT) to enhance mission-related outcomes and boost organizational performance? In this paper we examine large-scale survey data of nonprofits’ technology planning, acquisition, and implementation to assess the strategic use of IT in these organizations. We further evaluate their strategic technology-use potential through an examination of those IT-related competencies and practices that the literature deems critical for the successful strategic employment of technology resources. We find several promising developments alongside significant deficits in the strategic utilization of IT, especially in the areas of financial sustainability, strategic communications and relationship-building, and collaborations and partnerships. To boost IT’s mission-related impact, nonprofits will have to enhance their organizational capacities in long-term IT planning; budgeting, staffing, and training; performance measurement; Internet and website capabilities; and the vision, support, and involvement of senior management. Accordingly, we end with recommendations for overcoming some of the most pressing challenges. Keywords: Nonprofit organizations, strategic management, information technology, IT

Public Administration Review, vol. 67, no. 3, pp. 474-487, 2007

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The Strategic Use of Information Technology by Nonprofit Organizations:

Increasing Capacity and Untapped Potential

The world is changing rapidly for America’s nonprofit sector. While the past 25 years

have seen the number of organizations in the sector almost double and paid employment jump

from five percent to seven percent of the US total (Independent Sector 2001b), the operating

environment has grown more and more challenging for charitable organizations. They are

increasingly in direct competition with other nonprofit as well as for-profit entities. The

nonprofit community has struggled to fill gaps caused by cutbacks in public sector services at the

same time as it has been hit hard by the economic downturn’s double-whammy of decreased

government funding and increased demand for services. Meanwhile, high-profile scandals,1 in

conjunction with the spread of financial transparency through the Guidestar website, have

spurred demands for greater oversight and accountability as well as more “professional,” better-

quality services. In brief, nonprofit organizations are working in an era of heightened scrutiny,

greater demands, fewer resources, and increased competition (Adams and Perlmutter 1995; Ryan

1999; Burt and Taylor 2003).

Information technology (IT) has been held up as a way for nonprofit organizations to

innovatively and simultaneously address these challenges (Cnaan 1989; Te’eni and Speltz 1992;

Kolleck 1993; Elliott, Katsioloudes, and Weldon 1998; Berlinger and Te’eni 1999; Burt and

Taylor 2000, 2003). Bridging the gap between the current and potential uses of IT is, however, a

considerable undertaking that organizations have been slow in exploiting (Gordon 1998; Burt

and Taylor 2000). This paper represents a critical step in understanding what it means to increase

a nonprofit organization’s IT capacity in pursuit of the mission.

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Based on a comprehensive review of survey data on nonprofits’ IT usage patterns in Gift

In Kind International’s 2001 Technology Tracking Study, we examine nonprofits’ ability to

utilize IT to enhance organizational capacity and sustain the organizational mission. We pay

special attention to two dimensions of these organizations’ strategic use of the technology: 1)

their capabilities in the organizational and IT-related competencies found to be critical

“antecedents” for the strategic employment of IT resources, and 2) their ultimate success in using

the technology to help the organization further the mission and enhance overall performance.

Specifically, based on the insights of the strategic management literature, we first assess

nonprofits’ performance on six key strategic organizational competencies: IT planning; IT

budgeting, staffing, and training; Internet and website capabilities and use; the measurement of

IT effectiveness; board support and involvement in IT decision-making; and leaders’

understanding of the strategic potential of information technology. We then examine their ability

to exploit the technology for explicitly “mission-related” uses, focusing on strategic

communications, marketing, and relationship-building; the acquisition of funding sources and

financial sustainability; and the use of partnerships, collaborations, and donor assistance.

Overall, we find several promising developments alongside significant deficits in

nonprofits’ strategic use of the technology. In order to boost the mission-related utilization and

overall organizational impact of IT, nonprofit organizations will first have to enhance their

capacity in several key technological competencies and organizational practices. Nonprofit

leaders will especially need to obtain a better overall appreciation of IT’s full potential, along

with the willingness and capacity to more directly link the acquisition and utilization of IT to the

organizational mission. Not surprisingly, we find a strong connection between organizational

wealth and the capacity to successfully translate IT resources into improved organizational

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performance. We also find a link between strategy and engaging in intra-sectoral partnerships.

Those organizations that have explicit institutional strategies and missions are more likely to be

involved in IT partnerships and also to have more diverse funding bases. In general, the

education and support of management to develop these institutional structures are essential to the

growth of IT capacity and long-term organizational sustainability.

Nonprofits effectively need considerable outside assistance in capacity building and the

strategic use of IT so that they can better manage technological, financial and organizational

change. On the one hand, partnerships and collaborations should form a key strategic element in

the nonprofit community’s capacity-boosting efforts. On the other, in order for nonprofits to

understand how this technology can best serve its purpose, IT investment by donors should allow

nonprofits to utilize IT for internal efficiency gains, better service delivery, and training. Overall,

what is needed is a fundamental shift in the way that nonprofits gain support for and utilize IT.

The Importance and Transformational Potential of Information Technology

We define IT as applied computer systems, including computer hardware, software

programs, computer networking, and the consulting services to support the use and

implementation of information technology. The diffusion of IT throughout the nonprofit sector

has brought with it considerable potential for organizational change. Beyond simple increases in

administrative efficiency, the successful implementation of IT has the capacity to incite

organizational transformations (Burt and Taylor 2000) by fundamentally reconfiguring a

nonprofit’s structures and working relationships—both within the organization and with its

external constituents and organizational networks—and by transforming and significantly

improving its organizational learning and knowledge management systems (Castells 1996; Burt

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and Taylor 2000). In certain sectors of the nonprofit economy, such as the political advocacy

arena, IT is already “revolutionizing” standing practices (McNutt and Boland 1999).

This can, however, be a double-edged sword. For good or bad, IT has the power to

change the nature of nonprofit employees’ working conditions—including workload, working

environment, and interpersonal relationships—and can in the process have a considerable impact

on both employee job satisfaction and the internal distribution of organizational power (Saidel

and Cour 2003). On the positive side, the technology can “level the playing field” for

organizations of varying resources (Turner 1998; McNutt and Boland 1999). On the negative

side, IT has “raised the bar” for numerous critical organizational activities by changing donors’

and other stakeholders’ expectations regarding, for instance, the quality of grant proposals

(Schneider 2003). This makes it complicated for nonprofits without adequate resources to

compete with more technologically sophisticated organizations. With time, nonprofits that lack

the money, time, and technological expertise “fall even further behind in their quest to support

and improve their programs” (Schneider 2003, 383).

In her study of small minority-based nonprofits in Kenosha, Wisconsin, Schneider found

that “… nonprofits that could not effectively use IT often lost out on funding opportunities

because they had trouble meeting expectations for proposal quality and record-keeping systems

that both private and governmental funders now expect” (2003, 385). Even worse, poor

utilization of IT had the compounding effect of damaging the organization’s reputation and in the

process weakening its social networks and ties with critical local constituencies. Taken as a

whole, enhanced “expectations about the use of technology increase the gaps between a

community’s haves and have-nots” (Schneider 2003, 383).

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In short, the organizational and sectoral consequences of inadequate IT capacity are

serious. An exploration of how well nonprofits are employing the technology to increase their

organizational capacity and effectiveness is hence both timely and vital.

Data and Methods

Our analysis is based on data from a survey created and conducted by Gifts In Kind

International, the 2001 Technology Tracking Study of the Nonprofit Sector (see the web appendix

for full text of the survey). Gifts In Kind International is the third largest charity in the US and is

known for product philanthropy. It partners with manufacturers and retailers, including 44

percent of the Fortune 500 companies, to provide donated products and services to nonprofit

organizations in need. To fulfill this mission, it regularly tracks technology use of nonprofit

organizations to understand how it and high-tech companies can assist nonprofits with

technology. Although the survey effort by Gifts In Kind is for the express purpose of

understanding nonprofits’ technology needs, the survey also provides a substantial research

opportunity: the survey generated 1,572 unique responses from a wide array of nonprofit

organizations that are tax-exempt under section 501(c)(3) of the US Federal Tax Code.

It is typically difficult to conduct a random sample of the universe of nonprofit

organizations due to the absence of a systematic collection that lists all nonprofits. For example,

only nonprofits with annual budgets greater than $25,000 are required to file the IRS Form 990,

yet churches and certain other types of religious organizations are automatically granted tax-

exempt status but are not required to file the Form 990 regardless of their annual budgets.

Consequently, Gifts In Kind utilized a snowball sampling method to increase the number of

responses and types of organizations to assess nonprofit usage of IT. Beyond disseminating the

survey questionnaire to more than 2,000 nonprofit organizations in August and September of

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2001 registered with Gifts In Kind International as partners or recipients of donations, additional

survey dissemination strategies were employed to increase responses and gain a more complete

picture of nonprofit technology needs. Specifically, Gifts In Kind also distributed the survey to:

1) 240 United Ways; 2) 17,000 readers of Blackbaud’s electronic newsletter; 3) 50 grant making

associations (so that they would distribute it to their grantees and grant applicants); and 4) 120 of

the largest national nonprofit organizations, as determined by Gifts In Kind survey designers, in

order for it to be distributed to their affiliates. The survey questionnaire’s directions requested

that each organization complete only one survey.

The snowball sampling method resulted in 1,572 valid responses, and the results for this

survey have a margin of error of +/- 3 percent at a 95% confidence level. Gifts In Kind provided

us with this cleaned database of survey responses; however, for privacy reasons, all cases were

anonymous. Understanding these constraints, we conducted a series of bivariate tests on the

differences among nonprofits based on budgets, Internet access, and other factors. However,

given that Gifts In Kind did not utilize a sample frame and that a snowball sample is not random,

the results may be difficult to generalize.

The survey data nonetheless offer a meaningful portrait of nonprofit technology use. Our

analysis of macro-level trends in nonprofits’ usage of IT benefit from the diverse sampling base

of this survey as well as the attention to detailed organizational strategies. The Gifts In Kind

questionnaire requested that the information technology expert of each organization complete the

survey and answer all questions from the organization’s perspective. This request is an attempt to

secure the most accurate IT profile, given that the IT expert would most likely be the person with

the most knowledge about the IT capabilities of the organization as well as be integral in

deploying any systems and efforts.

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The responding organizations operate in a wide variety of service areas. Of the 24

primary service area categories, the most common were community development (8.2 percent),

health issues (8.4 percent), mentoring/youth activities (7.8 percent), services for families (8.9

percent), domestic violence (11.8 percent), education (9.1 percent), and programs for the

disabled (8.9 percent).2 The average organization in our sample has 10 volunteers, a staff of 42,

and a total annual budget of $3,614,588. About half (47 percent) have budgets greater than $1

million, and the range is from $80,000 to just over $60 million.

Survey research is one method that can address the analysis of larger samples and

systematically collect information on IT usage in a diverse and difficult-to-assess population. As

with all survey data, there are limitations in utilizing the Gifts In Kind survey, including

sampling (as noted above) and potential respondent bias.3 Nevertheless, where other data sources

do not exist or have significant gaps, survey research is an efficient method for conducting larger

sample comparisons and allow for the analysis of relationships.

Because we examine the macro issues of IT across a broad spectrum of nonprofit

organizations, we apply macro-level data and methods for our analysis. If instead we examined

issues within individual nonprofit organizations through a series of case studies, the diversity of

the nonprofit industry would quickly limit the generalizability of our findings beyond the

specific type of organization studied and would effectively lend a micro-level orientation to our

conclusions. In our study, in contrast, we examine a full range of nonprofit organizations—

including large nonprofit hospitals, small political advocacy groups, wealthy family foundations,

all-volunteer environmental and religious organizations, and everything in between. Because our

focus is on the IT challenges facing this nonprofit sector as a whole, we purposefully utilize

macro data and methods and accept the caveats of doing so. Our data and findings hence provide

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an important general view of nonprofit IT usage and identify areas where opportunities and

challenges exist.

Nonprofits’ Strategic Use of Information Technology

Our focus here is on the strategic use of IT in nonprofit organizations. In for-profit

organizations, the ultimate strategic goal is to acquire profits and market share while enhancing

shareholder wealth (see, for example, Porter 1980; Jensen 1998). In nonprofit organizations, in

contrast, financial outcomes are merely a means to an end. The ultimate strategic goal is

fulfillment of its social mission—to the creation of public value (see Moore 2000 for an excellent

overview; see also Bryce 1992; Bryson 1995). Accordingly, in our discussion of the strategic

uses of IT, we concentrate on how the technology is used to help the organization further its

mission and heighten its effectiveness in achieving key mission-related organizational outcomes.

This focus on strategic outcomes is in line with recent theoretical and empirical work in

the strategic management field, which has come to focus increasingly on the ability of IT to

move from a “back room,” administrative function to a more central strategic function for public,

private, and nonprofit organizations alike (Glazer 1993; Henderson and Venkatraman 1993;

Buhalis 1998; Berlinger and Te’eni 1999; Lu and Ramamurthy 2004). This research typically

approaches the topic from the theoretical perspective of the “resource-based” view (RBV) of the

firm (Barney 1991), which posits that organizations can enhance their competitiveness and

maximize returns through the development and deployment of key organizational resources.

Initial research in the RBV perspective concentrated on the capabilities (Grant 1991) that

derive from an organization’s “tangible” resources—its physical, technological, and financial

assets—as well as its “intangible” resources—its intellectual property, organizational networks,

and the company and brand image and reputation. With the diffusion of IT throughout the public,

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private, and nonprofit sectors, the RBV has more recently come to be used to explore the link

between IT and organizational performance (see, among others, Sethi and King 1994;

Brynjolfsson and Hitt 1996; Bharadwaj 2000), with IT explicitly regarded as a strategic resource

for the organization.

This research has in particular illuminated two important components of organizations’

strategic use of IT: 1) the various organizational and IT-related assets, capabilities, and practices

that seem to be critical “pre-requisites” for or “antecedents” of the successful strategic

employment of IT resources (Rockart, Earl, and Ross 1996; Buhalis 1998; Bharadwaj 2000;

Brynjolfsson and Hitt 2000; Zhu and Kraemer 2002; Aral and Weill 2004; Weill and Aral 2005);

and 2) the various ways in which the technology can be used to help an organization reach its

strategic aims—the efficacy of the actual mission-related uses of the technology (Sethi and King

1994; Brynjolfsson and Hitt 1996; Buhalis 1998; Lu and Ramamurthy 2004). Our analysis is

designed to shed light on both of these crucial elements in assessing nonprofit organizations’

ability to strategically employ IT.

Basic Technical Infrastructure and IT Resources

First, we briefly examine the organizations’ basic technical infrastructure. Organizations

develop their IT-based strategic potential by fostering a set of capabilities and practices that build

on this basic architecture (Weill and Aral 2005). Obviously, without a minimum level of capacity

in terms of IT hardware and software, an organization will not be able to use IT for any

meaningful administrative function, much less a strategic function (Henderson and Venkatraman

1993; Weill and Broadbent 1998). The Gifts In Kind survey contains a number of questions that

allow us to examine the technical infrastructure and basic computerization that nonprofits

possess and can potentially exploit for strategic purposes.

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In terms of workstation hardware, the data show that 98 percent of all organizations have

some form of desktop computer in the office, 59 percent of the offices have laptop computers,

and 4.5 percent house a mainframe computer. The typical office has 30 total computers and 6

laser printers, the age of which varies widely by the organization. While 14 percent of the

organizations have computers with an average age of approximately a year or less, the average

computer age in 32 percent of the nonprofits is 3 years or older.

Basic networking and Internet access capabilities are similarly diverse. We see, first of

all, that server hardware is becoming the norm: network servers are employed in 61 percent of

the nonprofits surveyed. Moreover, the central offices of 73 percent of the organizations are

networked so that information can be shared electronically within the office, with 28 percent of

those networks consisting of peer-to-peer networks and the remainder (72 percent) being

centrally wired. A minority of organizations (39 percent) have networks that staff can access

remotely. Access to the Internet, however, is now commonplace. Fully 97 percent of the

nonprofits have Internet access from the office, with 56 percent of the organizations accessing

the web through a high-speed, broadband connection (DSL, T1, fractional T1, or cable modem).

Seventy percent of individual workstations now have Internet access, up from 59 percent in

2000.

Critical Organizational Capabilities for the Successful Strategic Use of IT

As noted above, we concentrate on two elements of nonprofits’ ability to exploit the

technology for mission-related purposes. First, we examine six critical IT-related organizational

characteristics that the literature has cited as antecedents or “pre-requisites” of the successful

strategic use of IT—IT planning; IT budgeting, staffing, and training; Internet and website

capabilities and use; the measurement of IT’s effectiveness; board support and involvement in IT

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decision-making; and leaders’ understanding of the strategic potential of IT. According to Weill

and Aral (2005), judicious development of such mutually reinforcing competencies and practices

is essential for the creation of an organization that has the “IT savvy” to successfully translate IT

architecture into strategic results.

Planning for IT. One of the most important practices for the successful strategic

utilization of information technology is IT planning (Buhalis 1998). Though some of our results

indicate that IT priorities are often dwarfed by other concerns, an important minority (32

percent) is engaging in long-term IT planning. We find that such planning is more of a concern

for those nonprofits with budgets greater than $1 million, though nearly 40 percent of nonprofits

with budgets less than this mark intend to craft a long-term technology plan in the near future.

Those with Internet access are also more likely to have such a plan. This is in line with evidence

from Spigelman and Evans’ nfpSynergy surveys4 of British charities. They found that 79 percent

of organizations in 2003 (up from 55 percent in 2000) had some sort of “strategic plan”

specifically for the use of the Internet, and “It tends to be medium-sized charities with medium

income and larger web budgets, as well as those that set their sites up earlier and update them

more frequently” (Spigelman and Evans 2004, 20). We have no idea, though, whether these

strategies are effective, nor whether they fit into a comprehensive organizational strategy.

IT Budgeting, Training, and Staffing. A second essential competency noted in the

literature relates to the next stage in the strategic planning process: the implementation of the IT

plan (Henderson and Venkatraman 1993). Budgeting for IT hardware and software purchases,

training, and staffing are particularly important components of successful implementation (see,

for instance, Buhalis 1998; Aral and Weill 2004). Weill and Aral (2005) argue that these steps

are critical for the development of “firm-wide IT skills,” one of the core competencies of the

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“tech savvy” organization striving to use IT to reach strategic goals. At the same time,

limitations of financial resources, equipment, expertise, and training can have a negative impact

on both employees’ and managers’ attitudes towards computer usage, which can in turn further

limit the effectiveness of the organization’s incorporation of IT into the workplace (Berlinger

and Te’eni 1999).

Our data show that the majority of nonprofits budget for purchasing and upgrading

hardware (57 percent) and software (58 percent) as well as computer maintenance (63 percent),

but only 36 percent budget for computer-related training. While this seems like good news, on

average these activities receive only nine percent of the budget after personnel costs are

removed, and this is a highly skewed average since 56 percent of nonprofits report that less than

two percent is available for these essential IT activities. Also critical is that the amount set aside

for training is extremely variable with overall budgets, such that training is a luxury good for

lower budget organizations.

In fact, we see that overall financial capacity does appear to be a barrier to nonprofit

organizations seeking technology solutions. In line with previous research, nonprofits with lower

budgets have less access to IT (Berlinger and Te’eni 1999; McNutt and Boland 1999; Schneider

2003). For example, the proportion of workers in the office who use a computer daily (28 percent

overall) is positively related to the size of the organizational budget. In addition to lower IT

hardware, software, and training budgets, there is, for example, considerable variability in

Internet access depending on the size of the budget. While all nonprofits with budgets greater

than $10 million report that they have Internet access, only 12 percent of those with total annual

budgets below $100,000 have such access. Nonprofits with lower budgets are also more likely to

have fewer computers with Internet access. The speed of Internet access further demonstrates the

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disadvantage of nonprofits with lower budgets—while a majority (57 percent) with budgets less

than $1 million access the Internet via a modem, only 31 percent enjoy the higher bandwidth

options. In short, financial capacity appears to be a significant barrier to IT use. One of the

critical organizational characteristics for the successful strategic use of IT is, in effect, access to

sufficient financial resources.

Interestingly, most nonprofits (84 percent) have a full-time staff person for technical

support, but when queried on the primary way that support is delivered, 27 percent still rely on

volunteers, friends or interns to provide this service. Only in nonprofits with budgets greater than

$5 million are technical support staff regularly dedicated to IT or information systems in the

office. Nonprofits with budgets less than $1 million, in contrast, are more likely to have

volunteers or friends provide technical support (86 percent). Though this may seem to be a sound

cost-saving measure, the outcomes are often negative. In their study of religious nonprofits,

Berlinger and Te’eni (1999, 406) found that, “Of the clergy we talked to, only one who had

relied on volunteers for introducing computers was happy with the result.…Indeed, most of the

clergy had very negative experiences relying on volunteers.”

Internet and Website Capabilities and Use. Nonprofits are also continuing to devote

greater resources to their websites. Seventy-seven percent of the nonprofits in the Gifts In Kind

survey had an organizational website in 2001. This is important insofar as highly developed

Internet and web-based usage and capabilities (Aral and Weill 2004; Weill and Aral 2005) is

another core competency of the “IT savvy” organization that is able to translate IT resources into

substantive strategic benefits.

There is significant variation in the Gifts In Kind survey regarding who within or outside

the organization is charged with maintaining functional and technical enhancements to the

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organizational website: In 24 percent of the organizations, the website is maintained by an

internal Information Systems department; in 13 percent of cases, by communications staff; in 28

percent of cases, by an outside vendor; and in 32 percent of cases, volunteers play a significant

role in website maintenance.5 This variation may point to important differences in orientation

toward the website—is it a “communications” tool, a “technical” tool, or a “strategic” tool? The

use of volunteers for developing or maintaining the site implies an organization may not view it

as an important mission-related resource.

Just as important as the website content provided by the organization are the

organization’s predominant uses of the Internet. The more sophisticated the organization’s

virtual work processes, the greater the strategic potential. There are several dimensions to this

organizational “Internet capability” (Weill and Aral 2005). First, there is the extent to which IT

is used for internal and external communication. The Gifts In Kind survey shows almost

universal use of the Internet (specifically, e-mail) for internal communications (95 percent of

organizations) but great variability in terms of external communication. Seventy-eight percent of

nonprofits use the Internet to provide information about their organization, 59 percent use the

technology to network with peers, and 59 percent use it to transfer information among other

organizations. Less frequently, organizations communicate via online bulletin boards (15 percent

of nonprofits) or live chat rooms (5 percent of organizations).

Nonprofits are also increasingly using the Internet to access external information,

purchase products, and conduct research. Forty-one percent of organizations subscribe to work-

related discussion lists (listservs), and 45 percent use the Internet to access online databases.

More organizations (64 percent) purchase services, supplies, or other products over the Internet,

and still more organizations are using the Internet to conduct relevant research—71 percent to

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investigate funding sources and 58 percent to conduct program-development and program-

management research.

The Gifts In Kind survey also asks organizations how they plan to use the Internet. With

regard to internal and external communications as well as research and information gathering,

there are not large gaps between current and planned uses. There are, however, significant gaps

in regard to more sophisticated Internet uses like training and recruiting. Specifically, whereas 22

percent of organizations currently use the Internet to acquire training, 44 percent plan to do so in

the near future. Similarly, only 8 percent of nonprofits currently provide Internet-based training,

but 29 percent would like to do so. Staff and volunteer recruitment is likewise a popular

capability. Forty-four percent of nonprofits use the Internet to help recruit staff and volunteers,

yet 57 percent plan to avail themselves of this function in the future.

Measuring Effectiveness. While the IT capabilities, organizational culture, and planning

efforts provide evidence for what nonprofit organizations are doing, it does not address whether

their actions are evaluated or judged effective. Yet the measurement of results is an essential

component of the strategic planning process. Several questions in the Gifts In Kind survey ask

nonprofits to reflect on this subject. In general, few nonprofits measure the effect of IT purchases

(25 percent), and this holds across all budgets. Of the minority measuring the effect of IT, the

two most preferred methods are the measurement of staff productivity (21 percent) and tracking

the number of clients served (16 percent). Nonprofits with the largest budgets are most likely to

measure staff productivity, and all nonprofits are as likely to track clients served. The lack of

interest or willingness to evaluate IT effectiveness may stem from various issues: 1) IT may be a

luxury item that is not directly tied to the mission, 2) organizations may either not have the

number of staff members or enough trained to use IT to worry about effectiveness, and 3)

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addressing specific service delivery with IT may require many new organizational changes and

design of new processes before evaluation is possible. Of course, larger budgets may lessen the

effect of some of these. Nonetheless, the data reflect that nonprofits do not relate IT to the

bottom line as much as expected.

Organizational Support and Board Involvement in IT Decision-Making. Another

critical factor in a nonprofit’s ability to translate IT resources into strategic organizational results

is the commitment and involvement of senior management and the board of directors in a full

range of IT decisions, from long-term planning to website content (see, inter alia, Roberts 1988;

Buhalis 1998; Aral and Weill 2004; Weill and Aral 2005). Indeed, strong support from the board

and the executive director are one of the most important characteristics of organizations that “use

technology well” (Independent Sector 2001a, 1). Among other things, the attitudes of nonprofit

boards and executive directors towards IT are critical in helping surmount resistance by the staff

during implementation (Howell and Higgins 1990; Berlinger and Te’eni 1999). Their attitudes

(whether positive or negative) have a big impact on the success of computerization efforts, as

well as on staff’s ultimate satisfaction with the technology (Berlinger and Te’eni 1999). The

presence of the board in decision-making also increases the importance of IT as a valuable

contributor to a nonprofit’s mission. If IT is seen as a way that nonprofits can improve service

delivery, and organizations then institutionalize their support for it, the success of IT will be

securely coupled to the mission and financial sustainability of those organizations.

According to the Gifts In Kind survey, in organizations with such support, there is more

likely to be a clear association between technology purchases and the organizational bottom line

and, among other things, IT is more likely to be linked to grant funding. As noted above, only 32

percent of nonprofits are engaged in long-term IT planning. The good news is that 73 percent of

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those require the board of directors to approve this plan. When the board of directors is required

to approve long-term technology plans, nearly double the number of nonprofits associate the

effect of technology with increased grant funding (from 46 to 86 percent) or believe that new

technology could bring additional funding (from 36 to 83 percent).

Nonprofit Leaders’ Understanding of the Strategic Potential of IT. Related to board and

executive involvement is organizational leaders’ understanding of the strategic potential of IT.

Research has shown a strong connection between the role of IT “champions” or “visionaries”

and the resultant strategic value of IT investments (Howell and Higgins 1990; Henderson and

Venkantraman 1993; Berlinger and Te’eni 1999; Brynjolfsson and Hitt 2000; Aral and Weill

2004). Overall, the board and senior management’s level of expertise and familiarity with IT’s

change-making potential affects not only how technology is acquired and implemented but, more

importantly, the extent to which such efforts are linked to the organizational mission.

What do nonprofit leaders think about the potential of information technology? When

asked what a technology purchase could improve, few respond a reduction of costs (six percent)

or freeing staff to pursue other projects (11 percent). Instead, the top two responses are

increasing the number of clients served (27 percent) and achieving better communication among

staff members (26 percent). These are important regardless of the nonprofit’s budget. The first is

related directly to mission, but the latter may characterize the type of IT usage most common

among nonprofits—e-mail and networks to share information internally and with other

organizations. The Gifts In Kind survey limits questions about current use to only how the

Internet is utilized and, indeed, e-mail has the greatest number of responses (92 percent), and

more than half of the organizations associate networking and sharing information with the

Internet (57 percent). Thus, for nonprofits in this sample, the improvement in coordination and

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communication as well as increase in client base are how organizations evaluate whether IT is

assisting with the mission. The evolution beyond this phase to concrete measures is of the utmost

importance. Increasing nonprofits’ IT capacity means understanding how IT can be used to

implement new service delivery models and systems and then learning to measure whether it is

assisting or not in that capacity. In short, it means understanding how IT is much more than just

the Internet or e-mail.

Mission-Related Uses of IT

A critical supposition of this paper is that IT is a resource that can help an organization

meet its mission-related goals. In the previous section we examined nonprofit capabilities in a set

of mutually reinforcing competencies and practices that have been posited as essential for

organizations to successfully translate IT resources into strategic outcomes. In this section we

now turn to an examination of how nonprofits are able to exploit this technological potential for

explicit mission-related aims. We concentrate on three dimensions that are both integral to

achieving nonprofits’ social mission and amenable to analysis via the Gifts In Kind survey:

strategic communications and relationship-building, the acquisition of funding sources and

financial sustainability, and the use of partnerships, collaborations, and donor assistance.

Strategic Communications and Relationship-Building. One of the most promising

mission-related uses of the technology lies in the potential for organizations to build

relationships and communicate with clients and other external stakeholders via electronic

networks (Berlinger and Te’eni 1999; Independent Sector 2001a). Evidence from the UK

suggests that nonprofits have been relatively slow in adopting such uses. In their 1998 study of

438 medium and large British voluntary organizations,6 Burt and Taylor (2000) found that fewer

than 35 percent of nonprofits used advanced information and communications technologies “to

19

provide basic information to stakeholders. Fewer still provided opportunities to participate in

internal decision making or wider policy issues using media such as electronic voting, virtual

conferences, or electronic discussion forums” (p. 134). Only seven percent used IT in

interagency data exchange, and less than three percent had electronic meetings with partner

organizations. In short, there is little evidence of “liaison and communication across a network of

associated institutions, groups, and individuals” (Burt and Taylor 2000, 134).

Our results dovetail with this earlier evidence. The Gifts In Kind survey shows only a

small minority of organizations using the Internet for strategic communications. Just over 15

percent of nonprofits use the Internet to deliver services to their clients, 13 percent use the

technology to conduct advocacy campaigns, and 27 percent of nonprofits use it to encourage

involvement in community programs. What is interesting are the answers to a question regarding

nonprofits’ planned uses of the Internet, for it is with the strategic uses that we see the biggest

gaps between current and planned uses. For instance, 32 percent of nonprofits plan to use the

Internet to conduct advocacy campaigns, 37 percent to deliver services to clients, and 55 percent

to encourage involvement in community programs. In effect, more than double the number of

organizations plan to use the Internet for these three activities than are currently using it.

IT, Funding Sources, and Financial Sustainability. IT should also be able to assist the

organization with long-term financial sustainability—a requisite component of successful

nonprofit mission fulfillment (Bryce 1992; Moore 2000). Evidence from the UK suggests that

more and more organizations (52 percent in 2003) are striving to increase revenue and expand

services by using the Internet to conduct internal and external market research and e-mail and

web-based fundraising campaigns (Spigelman and Evans 2004).

20

The Gifts In Kind survey contains several questions related to online sales, fundraising,

and grantseeking activities. The data show, first of all, that only 14 percent of organizations sell

their products or services over the Internet, although 30 percent are planning to do so. More

popular is using the Internet for fundraising by accepting or soliciting online donations, a service

of which 25 percent of organizations currently avail themselves and 59 percent are planning to.

In regard to grantseeking activities, many nonprofits report that researching funding sources on

the Internet is common. It is the third priority for both current (68 percent) and future (67

percent) Internet usage. In addition, 51 percent of nonprofits use the Internet to apply for

government and private funding (with 66 percent planning to do so).

Given the importance of funding, the exposure to additional sources is imperative.

However, most nonprofits do not link the use of technology solutions to a possible increase in

grant funding. Only 26 percent report an increase in grant funding as a result of new technology.

Even fewer (11 percent) measure the effect of new technology by tracking whether grant funding

increases. Not surprisingly, organizations with budgets less than $1 million account for a

majority of those hoping for increased grant funding (67 percent) and of those currently

measuring impact with funding (52 percent). Thus, while many nonprofits value the Internet for

its influence on increasing funding, new technology purchases and uses are not so clearly

associated with the bottom line of the organization.

Collaborations, Partnerships and Donor Assistance. Judicious use of external

partnerships, joint ventures, strategic alliances, and key donor relationships to expand capacities

and achieve desired results is often an important component of nonprofit strategies (Moore

2000). It can be especially helpful for enhancing an organization’s IT-related strategic outcomes

21

(see Henderson and Venkatraman 1993) by helping an organization secure funding, operational

capacity, and other critical IT competencies that can in turn help boost overall performance.

Building on our findings in the previous section, we find here that the lack of a clear

association between the acquisition and employment of IT and the organizational bottom line is

further related to the extent that nonprofits strive to build and maintain partnerships with other

organizations. Not only is the presence of sound partnerships a further indication of

organizational support, but it also helps assure that IT is handled appropriately, and more

generally serves to increase the probability that IT can enhance the organization’s long-term

sustainability. If partnerships with technical support experts, web site hosts, vendors that provide

training, and other consultants are vigorously monitored, nonprofits will receive better service.

However, budgets can hamper this process. Nonprofits with budgets less than $1 million are less

likely to be able to hire outside vendors to train their staffs on new technologies (36 percent), are

more likely to rely on other companies to host their websites (49 percent), and are less likely to

be able to have on-site or online technology training and consulting (58 and 55 percent,

respectively).

The desire for successful partnerships is clearly revealed when nonprofits indicate which

donor gifts of IT would be most beneficial. Nonprofits most desire donations that provide

computer software training (45 percent), computer maintenance and support (38 percent),

website enhancements and updates (32 percent), and donation of assistance to develop a five-

year technology plan (29 percent). Such desired donations are less of the pure “computer

hardware or software” variety, and call instead for the donor community to make a concerted

effort to increase nonprofit IT capacity so that they can achieve the most with what they have.

From integrating technology into nonprofit service delivery to planning for long-term expansion

22

and strategy, the donor community needs to think beyond computers and software. Donors

should help fill these gaps, since facilitating partnerships with strong service providers and

providing nonprofits with what they most need institutionalizes IT and helps ensure its success in

helping organizations fulfill their mission.

Discussion and Conclusions: Increasing Capacity and Untapped Potential

Covering more with less leaves nonprofits with no choice but to embrace new methods of

doing business. As it has in the private sector, IT is beginning to fill this role for nonprofit

organizations. From enabling greater internal productivity to providing new opportunities for

service delivery, IT is a potential solution. This paper is a first step in understanding what it

means to increase a nonprofit organization’s strategic IT capabilities. Based on comprehensive

analyses of survey data on nonprofits’ IT usage patterns, we examine nonprofits’ ability to utilize

IT to advance the organizational mission.

We began our paper with the premise that effective utilization of IT not only has the

potential to boost nonprofits’ organizational capacity and effectiveness, but also that expectations

for such utilization are increasingly elevated. Given the high stakes at the organizational and

sectoral levels, our examination of how well nonprofits are taking advantage of IT’s change-

making potential is particularly timely.

Our analysis shows that, although basic utilization of IT in the form of computers, e-mail,

Internet access, and websites has grown relatively rapidly, there are nevertheless several critical

deficiencies in the typical nonprofit’s employment of IT to help fulfill the organizational

mission. In these concluding sections we summarize nonprofits’ capabilities in the critical

organizational “pre-requisites” of successful IT utilization, discuss the most important challenges

23

and opportunities in nonprofits’ future strategic employment of IT, and elaborate on the critical

potential role that collaborations, partnerships, and donor assistance should play in this endeavor.

Critical Organizational Competencies: The Need for Capacity-Building

In this paper we first looked at those critical IT-related organizational characteristics that

have been cited as antecedents of the successful strategic use of IT. According to the literature,

judicious development of these mutually reinforcing competencies and practices is essential for

the creation of an organization that has the “tech savvy” to successfully translate IT architecture

into strategic results. How are nonprofits doing along these lines?

We find several promising developments alongside significant deficits in nonprofits’

technological competencies and organizational practices. Overall, in order to boost the strategic

utilization and overall organizational impact of IT, nonprofit organizations will first have to

enhance their IT capacity, especially in regard to long-term and short-term planning, budgeting,

training and staffing, Internet and website capabilities and use, support and involvement from

senior management and the board, the measurement of effectiveness, and leaders’ understanding

of IT’s change-making potential.

In line with previous research (Berlinger and Te’eni 1999; McNutt and Boland 1999;

Schneider 2003) money and, highly related to this, the availability of appropriate equipment

(especially computers, hardware, and software) are among the most salient factors. We find that,

first of all, in the typical nonprofit organization a relatively low proportion of the budget is

dedicated to IT. Smaller organizations, however, appear to be particularly constrained by the lack

of budgetary resources. We find that organizations with lower budgets had fewer staff with daily

use of a computer, were more likely to rely on volunteers to implement their IT solutions, were

less likely to use IT to measure staff and organizational performance, and were less likely to

24

have a long-range IT plan, full-time IT support staff, high-speed Internet access, and either on-

site, off-site, or online IT training for their employees. Less wealthy nonprofits are, in short, less

likely to have the organizational capacity, or “IT savvy,” that can facilitate the strategic

utilization of information technology.

That said, resource limitations go beyond the purely direct financial capacity of nonprofit

organizations. Our findings support those of Schneider (2003) that the lack of staff, the lack of

familiarity, and the lack of time can be the most significant barriers to the effective utilization of

IT. The existence of dedicated, knowledgeable full-time staff has been shown (Berlinger and

Te’eni 1999; McNutt and Boland 1999) to be especially critical in IT projects, yet, unfortunately,

too many of the nonprofits in our analysis are having to rely on part-time staff and/or volunteers.

To jump this hurdle, nonprofits will need to enhance the educational and experience levels of

their key support staff as well as front-line personnel.

Another core competency of organizations that are able to translate IT resources into

substantive strategic benefits is highly developed Internet and web-based usage and capabilities.

On the positive side, the typical nonprofit organization now has a website and is continuing to

devote greater resources to it. However, here too there is an over-reliance on volunteers. In

addition to “professionalizing” these services, the next step is to move away from

“brochureware” by continuing to add more sophisticated and interactive website content.

Just as important as website content are the organization’s predominant uses of the

Internet—the more sophisticated the organization’s virtual work processes and overall “Internet

capability,” the greater the strategic potential flowing from the technology. We find that the

average nonprofit is doing quite well in terms of using the technology for internal

communications. The next step will be to enhance their external communications capabilities—

25

especially in regard to providing information about their organization, networking with peers,

transferring information among other organizations, and communicating via online bulletin

boards and live chat rooms. Nonprofits are also increasingly using the Internet to access external

information, purchase products, and conduct research. On the horizon are plans by a considerable

proportion of organizations to use the Internet for more sophisticated features like the

recruitment of staff and volunteers (57 percent of nonprofits) or the provision (29 percent) and

acquisition (44 percent) of training.

Previous research had also cited the support, involvement, attitudes, expertise, and IT-

related strategic vision of higher-level management and the board of directors as essential

determinants of the planning, acquisition, implementation, satisfaction with, and ultimate

strategic success of IT projects. Fortunately, we find that the majority of boards are involved in

approving long-term IT plans. Management approval does not therefore appear to be a

significant barrier. Beyond this, the results are mixed. We do not have solid evidence that top

management “champions” IT solutions nor that management fully understands the newer,

strategic role that IT can play in their organizations.

To a large extent, it is plausible that the under-utilization of IT found here is related to

nonprofit leaders’ understanding of the technology’s strategic potential. We find the same

general under-appreciation of the technology-mission relationship that Saidel and Cour

witnessed in a series of interviews with nonprofit leaders: though they seem “aware of the

connection at some level,…it is not clear…just how carefully decision makers examine the

relationship between mission and technology” (2003, 22). Our study effectively corroborates the

findings of previous research (Berlinger and Te’eni 1999; Burt and Taylor 2000; Schneider

2003) that many organizations continue to view IT as a non-strategic “administrative tool.”

26

The effects of a non-strategic approach to IT are seen all down the line in nonprofits’

acquisition and implementation of the technology. We found that nonprofits do not adequately

engage in planning, budgeting, staffing, training, or collaborations for IT-related activities and

materials. There are also deficiencies in the development of explicit organizational strategies for

the integration of IT into the workplace. This is visible in the dearth of advanced Internet

strategies, in strategic planning for IT, and in the development of measures to evaluate the

performance and impact of IT. In the end, we concur with Spigelman and Evans that “not enough

emphasis is being placed on solidifying and integrating a wider Internet and/or technology

strategy within the voluntary sector” (2004, 28).

Untapped Potential: Opportunities and Challenges in Nonprofits’ Strategic Use of IT

We also found mixed results in nonprofits’ mission-related utilization of IT, especially in

the areas of marketing research, strategic communications and relationship-building; and

fundraising, grantseeking, and financial sustainability. We find that organizations are

increasingly employing IT to engage in research activities, especially in terms of grantseeking

efforts and internal and external market research. E-mail and web-based fundraising campaigns

are also more and more commonplace, as are website donations. In brief, nonprofits are utilizing

the simplest and most direct ways of employing IT.

At the same time, because of the above-cited “missing pieces” in nonprofit organizations’

IT capacity, nonprofits may be losing out on much of the strategic potential of advanced

information technologies. This is especially the case with the use of the web. Though previous

research had found that leaders of 61 percent of voluntary organizations believe they are

“making the most of the Internet” (Spigelman and Evans 2004, 9), our evidence suggests that

this relatively high figure is chiefly the result of a lack of understanding of IT’s full potential. For

27

most nonprofits, the website is not a primary business feature; it remains instead on the “strategy

periphery” (Spigelman and Evans 2004, 11). Nonprofits could begin by using technology to

better track those who visit and use the organization’s website. In profiling their website users,

organizations would acquire the ability to segment their audiences and create communication

channels that would facilitate targeted marketing, communications, and fundraising appeals.

The next wave of IT in the nonprofit sector should also consider greater utilization of

advanced electronic networking capabilities—especially the most interactive elements—in their

stakeholder engagement efforts and in their strategic communications, outreach, and marketing

plans. Yet a minority of organizations’ websites contain the simplest of interactive features such

as subscribable newsletters or allowing users to update their own profiles and records online.

Likewise, only a minority of nonprofits use IT to relay anything more than basic information to

their constituents, and only a very small minority employ techniques to facilitate significant

stakeholder participation in decision-making, governance, or service delivery. Overall, we

concur with Spigelman and Evans that “charities really need to start thinking about websites as a

tool for building relationships, not just as a way of getting some information across” (2004, 29).

This is especially relevant given the great potential of second-generation, “Web 2.0”

applications to facilitate intense interactions between organizations and their consumers. For

instance, interactive blogs, discussion lists, bulletin boards, real-time consultations, online

training, virtual conferences, personalizable intranets and extranets, and social networking

software can play a valuable role in strengthening bonds, building trust, and communicating

strategically with core constituents. And the recent development and growth of collaborative

“wikis,” online surveying and polling tools, and tagging and social bookmarking projects has

opened up a world of opportunities for intense, decentralized, and highly participatory problem-

28

solving, decision-making, brainstorming, and knowledge-creation efforts. Collectively, the rapid

spread of these more interactive technologies has dramatically increased organizations’ ability to

communicate with, strategically engage, and be responsive to their constituents.

Overall, the employment of IT can be a powerful driver of organizational change.

Comprehensive use of the core electronic networking technologies and applications can wind up

engendering a fundamental transformation in an organization’s structure, values, business

models, and networks of internal and external relationships. Organizations that do take full

advantage of the interactive and reflexive qualities of the technology, such as Friends of the

Earth or the Samaritans in the UK (Burt and Taylor 2000), can end up building true “intelligent

organizations.” This “more radical change,” however, would require “powerful new visions to

emerge and be embraced” (Burt and Taylor 2003, 125). For most organizations, presumably,

change on such a scale is not necessarily the ideal nor on the immediate horizon.

In the near term, current-generation IT nevertheless has considerable strategic potential

for nonprofit organizations. It can and should play a critical role in helping an organization fulfill

its primary mission. Yet as we have just argued, the typical nonprofit has not tapped into this

potential. Our study suggests two primary reasons for this under-utilization. First, it appears

many nonprofit leaders are only just beginning to see the “strategic,” rather than merely

“administrative,” role for IT in their organizations. Second, and perhaps more importantly, not

all nonprofits have the “tech savvy”—in terms of the requisite organizational competencies and

practices—to translate their basic IT architecture into strategic benefits for the organization.

Increasing nonprofit organizations’ technological capacity while simultaneously boosting the

strategic orientation of their leaders’ approach to IT is, accordingly, an area where nonprofits

will need considerable assistance from external agencies.

29

The Need for IT Partnerships, Collaborations, and External Assistance

Many of the strategic deficiencies outlined above appear to be inter-connected. As

Berlinger and Te’eni (1999) argue, limited resources lead to less extensive planning and training

and is linked to poorer-quality, more difficult-to-use (often donated) equipment and lower

technical skills, which leads to sub-par performance, which then leads to more negative attitudes,

which leads in turn to an overall less effective utilization of computer resources. In short,

nonprofits need help beyond just money, or equipment, or training. A holistic approach is called

for instead.

In fact, one of our key conclusions is that nonprofits need considerable outside assistance

in boosting their IT capacity. To enhance the strategic use of IT, there will need to be more

extensive and judicious use of partnerships, collaborations, and new forms of donor assistance.

This corroborates a key finding of an Independent Sector report that “Strategic use of technology

is likely to require long-term collaborations with for-profit and nonprofit partners” (2001a, 1).

Schneider (2003) echoes the need for collaborations, especially for those organizations lacking

adequate resources.

In effect, most nonprofits understand that the deployment of an internal IT infrastructure

would help them to address both competition and accountability and meet the increasing

demands placed on them. But nonprofits need more than just IT equipment. They need support to

learn how to utilize IT in an innovative manner and evaluate whether the investment in IT has

been beneficial. However, donors and grantmakers too often provide the funding for equipment

purchases without an understanding that nonprofits need more than a one-time, narrowly defined

contribution. It may be that to effectively use IT, nonprofits must receive support to build an

understanding of and capacity for IT utilization. Unfortunately, training, technical assistance and

30

maintenance of IT are issues that are less likely to receive funding given the long-term nature of

such support. In addition, the capacity of a nonprofit to enlist new technologies to deliver

services in new ways (e.g., online commerce and databases) is missing, and this is the step that

would allow nonprofits to embrace IT innovation.

The idea of nonprofit capacity, whether in regard to IT competencies or organizational

sustainability, is thus an issue in which the donor community can and should assist. However,

from integrating technology into nonprofit service delivery to planning for long-term expansion

and strategy, the donor community needs to think beyond computers and software. Nonprofits

need assistance in capacity building so that they can manage technological, financial and

partnership change. Above all, the education and support of management to develop the critical

institutional structures described above are essential to the growth of capacity, long-term

sustainability, and the fulfillment of the mission.

The donor community’s provision of computer hardware and software does remain

essential to the capital foundation of nonprofits. However, in order for nonprofits to understand

how this technology can best serve its purpose, IT investment by donors should allow nonprofits

to utilize IT for internal efficiency gains, better service delivery, and training. Staff must be

adequately trained, and management must have the technical education to innovatively integrate

technology into service delivery and evaluate its effectiveness. Support that allows nonprofits to

discover new ways to use IT creatively and innovatively, beyond websites, is an essential step

for nonprofits to survive in this competitive environment. Donors need to support a nonprofit’s

exploration of how this is possible. This support must reach beyond equipment and seek to assist

nonprofits in building IT capacity. In-kind donations as well as the requirements that many

foundations place upon the funds that they give to nonprofits should allow for this. In brief, what

31

is needed is a fundamental shift in the way that nonprofits gain support for and utilize IT. IT

capacity and long-term sustainability require internal organization and institutional structures

that can support change, and donors must be willing to provide “change” resources.

32

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Notes

1. For example, the United Way’s CEO was accused of lavish personal spending and

mismanagement of funds while the Red Cross faced complaints that donations given to the

September 11th fund were allegedly used for other purposes, including internal operations.

2. The other primary service areas (in percents) were arts/culture (4.2); civic affairs (0.7);

conservation/environment (2.1); crime prevention/substance abuse (2.5); disaster relief (1.0);

historic preservation (0.8); human services (4.0); child welfare (0.8); housing/homelessness

(2.8); hunger relief (1.5); literacy (1.3); programs for the elderly (3.3); child care/day care (3.2);

religious/evangelical services (2.9); adoption/foster care (0.4); mental health (0.9); other (4.6).

3. In regard to bias, a nonprofit may be more likely to respond to a survey that is of personal

interest (for example, readers of Blackbaud’s newsletter) or about a subject that is of greater

concern in the organization at that point in time, and unlikely to respond if the organization is

less involved or not using IT. In addition, respondents are likely to portray their organizations’

situations in a more positive light in an effort to rank or score well in given indices. Finally, the

organizational status of a person with knowledge of how the organization utilizes IT is sure to

vary across nonprofits. Larger nonprofits will be more likely to have designated IT staff while

smaller ones will not and may rely on knowledgeable employees or volunteers.

4. The 2003 nfpSynergy survey was a non-random web survey of 143 British charities that was

sent in a link (www.nfpsynergy.net/vp05sample) via e-mail to approximately 2,000

organizations in nfpSynergy’s contacts database. British “charities” are similar to US 501(c)(3)

nonprofit organizations, except that religious organizations are not classified as “charities” in the

UK.

37

5. In addition, in 30 percent of the organizations, “other internal staff” were charged with

maintaining the web site. Organizations were able to select all applicable categories, so

percentages do not add up to 100.

6. Burt and Taylor used a stratified random sampling method, selecting 1,490 British charitable

organizations with incomes above £250,000 per year from a database provided by Aurelian

Information Ltd., a commercial provider specializing in the voluntary sector. The results have a

margin of error of +/- 3 percent at a 9 percent confidence level.