A blackboard with an x axis labelled 'Cost' and a y axis labelled 'Value'. There is a red dot bullseye marked in the bottom right quadrant.

How to build your knowledge of digital costs and be ready to make core and project funding applications. A Content Seeds article.

This blog explains how to evaluate what digital and technology expenses are on your organisation’s horizon. It will increase your knowledge and help you add digital expenses to any funding application.

It will be most useful if you already have a digital strategy and roadmap. These are the foundation for informed decision-making and resource allocation.

But sometimes funding opportunities arise when you don’t have an up-to-date strategy.

Read: all Catalyst’s resources on digital strategy.

Read Part 1: How to understand your current digital costs.

Why you need foresight

Using digital tools sustainably and impactfully requires foresight and adaptability. It also needs a commitment to responsible financial management. This is possible through exploration, collaboration and skills development. This will help you use and budget for digital tools in ways that align with your mission.

1. Consider how your services are evolving

You need to understand what your service users and staff need. This will help you identify the digital tools you already use need to evolve and adapt.  Where possible use data to build a picture of how your service users are behaving.  For example if there is an increase in online referrals but the online referral process is inefficient you can make improvements.

Tip: Digital costs include any external support you might need to evolve your services. Do you need a service designer or user researcher to help you understand people's needs?

2. Carry out a value and resource analysis

Without a strategy and roadmap you will lack a rationale for choosing what to budget for. Your projects and internal operations will suffer for this. Carrying out a value analysis will help you identify initiatives worth investing in and seeking funding for.

You may also need to allocate more time to your team to skill up, run and manage new or existing projects.  Assess what this might look like and build out the associated costs. This will help you include accurate personnel costs in any funding request.

Tip: To help you identify your priorities use this value analysis tool.

3. Get quotations

Uncertainty is an inherent part of digital, often leading to unforeseen expenses. Build your knowledge of costs and value by talking to software companies and peer organisations.

If you expect to make updates to software you already use (for example, your website) then get some quotes. Do this even if you are not sure you will have budget for the work. This will reduce the likelihood of unforeseen digital costs further down the line.

Even if you lack enough clarity to get accurate quotes you can still make estimates. Talk to other charities using similar tools about their costs and the user experience. Ask software providers about likely financial requirements.

Tip: Get at least 3 quotes (never only 1) so you can assess whether you are getting a good deal. Most quotes are valid for 3 months.

4. Assess what skills you need to support your digital infrastructure

Carry out a digital skills audit. This will help you identify digital skills to support your services and operations.  It will also show where you need to invest in upskilling staff or recruiting for new skills. Your organisation only benefits from digital tech if your team know how to use it. So include continuous professional development in digital costs in your budget.

Tip: talk to Trustees, volunteers and other organisations to find out where free support might be available.

Our next blog provides guidance on how to position digital costs as part of your core operating budget. It will show you how to weave them into all your funding applications.

To get ideas about how other organisations are using digital tools and how much it costs them you can explore Catalyst's Shared Digital Guides.

Further information

Read the other parts of this guide:


Image: "Cost Value Matrix Graph Business Concept" by focusonmore.com is licensed under CC BY 2.0.

Our Catalyst network - what we do

Support & services

Our free services help you make the right decisions and find the right support to make digital happen.

Learn what other non-profits are doing

39+ organisations share 50+ Guides to how they use digital tools to run their services. Visit Shared Digital Guides.