Why Expanding Nonprofits Struggle with Technology
I was reading recently (on Reddit/r/nonprofit) about a poor soul who has experienced significant growth in their nonprofit. Their “growth” came in the form of expanded reach and impact. Every leader’s dream. There was only one problem: they kept track of all their data in multiple spreadsheets. As they attempted to deliver services to their new markets, they couldn’t make use of their data. It was too spread out. It quickly became clear that their digital infrastructure couldn’t support their growth.
They had made the mistake of growing their impact without scaling their capabilities first.
This is the “Growth Trap” – growing without scaling.
Especially with technology, what worked yesterday doesn’t always work today, and it’s very unlikely to work tomorrow.
This transition doesn’t announce itself; you just look up one day and notice you’re drowning. By then, damage is already being caused. Reputation. Impact. Perhaps worse.
The cause
Growth comes in many forms, such as organizational size, services offered, or an increasing supporter base. These technically cause the Growth Trap, but they’re not the root cause. The true cause of the Growth Trap is deficient leadership.
My goal isn’t to point fingers, it’s to shed light. There are many reasons that leadership could be lacking. Perhaps this problem isn’t on the radar, so to speak. Maybe it just never seemed serious enough to take action.
In a 2025 study on Nonprofit Technology Impact by Sage, 41% of respondents lack automation and organizational efficiency, 35% rely on manual reporting, and 29% experience inefficiencies and delays due to disparate systems. The data shows that this is still a major problem for many.
They had made the mistake of growing their impact without scaling their capabilities first.
Five signs you’ve fallen into the Growth Trap
1. Reactive decision-making
Technology investments should be proactive instead of reactive. This means looking ahead through the lens of your strategy and planning based on future needs. Technology decisions made based on current needs may sound acceptable, but it’s far from helpful; decisions made in crisis mode are even worse.
Sometimes, buying a new software product or digital solution isn’t even evaluated. Your staff are making those decisions autonomously, often without knowledge or regard for how they are damaging the business’s efficacy and security at large.
Both scenarios lead to security, technical debt, and future integration challenges that are expensive to resolve. And if they lead to a data breach, it might spell disaster for the organization.
2. Technology silos
In agriculture, a silo is used to store grain. Wheat in one silo, corn in another. They exist to keep the grain separate. This is good for farming but horrible for technology.
Technology silos happen when data is trapped in its respective application, process, or team (department), isolated from everything else. This prevents you from making important relations in your data, dramatically reducing its value. Data is used to provide insight and intelligence to your business, whether it’s marketing or operations.
As your organization grows, so can its technology footprint. Without intentional integration in all the tools you use, data silos are unintentionally built. Duplicate and inconsistent data becomes a nightmare to manage, and it simply can’t be trusted. If you’ve ever wondered, “Where is our single source of truth?” you likely are suffering from siloed data.
3. Communication breakdown
Keeping the “silo” concept in mind. There’s another negative besides data segregation that should be mentioned, and that’s impaired communication. It’s often expressed as: “The left hand doesn’t know what the right hand is doing.”
Teams working independently of each other don’t usually stop and think before they do something. When they encounter a roadblock, they struggle asking: “Has anyone else solved this problem before?” It’s not malicious intent, the question simply doesn’t come to mind. They simply solve the problem and move on. But what happens when they solve duplicate problems with technology?
This often leads to “Shadow Tech,” which sounds really cool, but trust me, it’s not. Shadow technology is simply software applications or digital processes that exist without anyone else’s knowledge. No vendor vetting process, no security, no oversight. Data exists in these unknown corners of your business, and it’s unprotected. Not to mention, duplicated effort is expensive.
Do you know what’s running out there?
4. Manual process overload
The introduction story (tracking important data in spreadsheets) brought another problem to light. Inefficiency. Their inability to make use of the data is bad enough, but someone had to input the data into the spreadsheets!
Manual processes, like data entry, sucks valuable time away from your team. They should be delivering missional services or building for the future. Forcing them to spend time on tasks that could be automated is a waste.
I’m sure you’ve heard it said: “Your people are your greatest asset.” And I’m sure that you agree. So why use that valuable (expensive) resource on things that computers can do faster, more accurately, and cheaper? Technology doesn’t replace humans, it frees them up to do things only humans can do.
5. Declining return on technology investment
The vendor’s sales team made you a promise (probably multiple), and you’re not seeing them come through. You spent the money, but aren’t seeing the return on investment. Maybe you’ve been paying into technology with the corresponding efficiency gains.
It’s understandable how frustrating this is. It’s a resource drain and leaves you feeling a little helpless. These tools were supposed to bring clarity, but all you’re left with is complexity.
Why traditional solutions fail
Our society is rife with the idea that more tools lead to fewer problems. But in reality, more tools create new problems of their own. The solution is not in the tools. Likely, more or better tools won’t be effective anyway.
The solution is in clearer thinking.
Vendors that claim to solve a myriad of problems with their products. For every problem, you need a product. But as you grow, the expense and headache of managing all these products grow too. Eventually, this haphazard assortment of “solutions” will break the back of the organization. It collapses under its own weight.
This is the natural end of the Growth Trap.
Breaking free from the Growth Trap
Clearer thinking. That’s the real solution. Take a step back and strategize how technology will serve your mission. When you do this, the outliers become obvious; you can streamline what is working and eliminate what is not. You can also identify the gaps that lock you into the Growth Trap.
When nonprofits invest in technology:
- 96% report improved program and service delivery.
- 89% experience increased organizational capacity and growth.
- 82% achieve better fundraising and financial stability. 1
When you have a focused strategy for technology, you inherently prioritize integration. You see all the parts as a whole. This perspective is invaluable. It allows you to drive toward your goals and grow the right way, by scaling your capabilities before you grow.
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