In order to better understand the information technology (IT) and application service requirements of non-profit organizations, we propose a survey of the Council of Michigan Foundations (CMF)  and the Michigan Nonprofit Association (MNA) membership. This proposed study is particularly timely considering changes that are occurring in the IT and application service markets.
In the past, organizations purchased software applications and absorbed high costs to support and update these applications. Recently, this traditional application paradigm has been challenged by the emergence of "application service providers (ASPs)," or outside vendors who supply and support applications via the Internet (also called "application hosting" or "subscription-based computing"). The ASP model offers a number of potential advantages, including: freeing organizations from staffing costly information technology support departments; providing applications that are up-to-date; offering sophisticated features that would tax most small and medium-sized organizations; and providing access to applications that are used only once or occasionally.
Most ASP development has focused on for-profit enterprises. Industry estimates suggest there are currently several thousand ASP customers with expected growth to 136,000 by 2001 and to more than 3 million by 2004. Similarly, while there are currently only a small number of ASP companies (e.g., Agliti, Corio, Futurelink) projections suggest that by the end of 2000 there will be several hundred ASP firms.
Non-profit organizations represent a potentially attractive audience for ASPs. In fact, this was the theme of a workshop held at the University of Michigan’s School of Information, Making advanced technology work for community serving organizations: The potential impact of OSS and ASPs, May 12-13, 2000 . Specifically, the small size and low overhead of many non-profit operations preclude aggressive investment in IT and applications. Under the ASP model, however, the large start-up and recurring costs associated with sophisticated IT and application installations can be mitigated. A concern, though, is that potential benefits associated with non-profit use of ASPs may be lost through lack of attention by ASP companies – largely focused on for-profit customers – to the special needs of non-profit organizations.
To better fit the ASP model to non-profit concerns, a Seattle-based organization called NPower has surveyed Washington non-profit organizations about their IT and application needs and has initiated a pilot ASP project among a sub-set of these non-profit organizations.
The research proposed here builds on the NPower project by collecting data from a sample of Michigan non-profits – primarily grant making organizations in the Council of Michigan Foundations and in the Michigan Nonprofit Association . The goals of the proposed research are: a) to characterize the overall IT and application service climate for CMF and MNA member organizations; b) to identify CMF and MNA member organizations that are strong candidates for an NPower -type ASP pilot in Michigan; and c) to explore how IT and application service provision can improve performance among grant making organizations (the NPower pilot in Seattle focused on grant recipient organizations).
This project is supported by grant 2000-00491 from the Charles Stewart Mott Foundation .
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