Specializing in a specific industry helps you stand out in a crowded field, turning you from just another vendor into a trusted insider to high-value clients. In our Industry Deep Dive series, we’re drilling down into the ins and outs of targeting specific verticals, getting firsthand advice and tips from MSPs who are succeeding with specialization—and providing guidance on how you can too. We started with healthcare (see Tapping into the Pulse of Healthcare: How MSPs Are Finding an Rx for Growth). In this installment, we get some firsthand advice and tips from MSPs who are serving nonprofit organizations.
The nonprofit sector might seem like an unlikely goldmine for MSPs. After all, these organizations are notorious for tight budgets, outdated technology, and lean staffing. But some MSPs have found that serving mission-driven organizations offers advantages from profits to purpose.
It’s a good time to figure out how to grow your business with nonprofit clients too. Recent studies from Grandview Research and NTEN, a nonprofit technology advocacy firm, show nonprofits spend on technology even when budgets are tight. And their spend is increasing steadily every year. A 2024 benchmarking survey from BDO found 59% of nonprofits planned to increase technology spending in the next 12 months, with 23% saying the increase would be significant.
We talked with three MSPs leaders who’ve successfully cracked the code. With nonprofits making up anywhere from 20% to the majority of their business, they’re enjoying healthy margins and building sustainable practices.
Choosing to Serve Those Who Serve
Working with nonprofits started accidentally for Stuart Bryan, president of Norwich, Connecticut-based I-M Technology. When his previous employer lost a major enterprise client and seemed uninterested in supporting remaining customers, Bryan saw an opportunity. Then a sales manager, he walked into the accounts payable office.
“I asked one question,” says Bryan. ‘Who pays their bills early and on time?’ She gave me a list.” That list included several nonprofits. When Bryan launched his own company with his boss’s blessing in 2003, nonprofits became foundational clients.
That strategic beginning eventually reflected a personal ethos. “I try to lead very intentionally and make sure that what I do professionally doesn’t ever conflict with my personal mission and my personal core values,” Bryan says. “When a client is actively doing good work and is actively benefiting the community, it’s very easy to get behind that customer and support them and feel good about the work that you do.”
For Josiv Krstinovski, CEO of Parsippany, New Jersey-based KRS IT Consulting, the original motivation was more personal. Nonprofits had supported his family while his father battled cancer, and he wanted to give back. “Something that I saw firsthand with nonprofits is that they do support a lot of people in need,” Krstinovski says. “That kind of inspired me to help and protect a lot of these organizations.”
Supporting nonprofits requires understanding them, says Nimer Saikaly, president of San Diego, California-based Ciprus Consulting. “Early on, we saw a disconnect. Many nonprofits were underserved by IT providers who didn’t understand the unique balance between mission, compliance, and constrained budgets. We made a conscious decision to specialize in supporting mission-driven organizations because we genuinely care about the work they do.”
Unique Tech Challenges
While every industry has its pain points, nonprofits present unique challenges that require specialized understanding. The issues go beyond just limited budgets. “Nonprofits often face a trifecta of challenges: limited budgets, lean internal IT staff, and rising compliance demands, especially in areas like cybersecurity and data privacy,” says Saikaly.
Higher levels of employee churn create a greater need for speedy onboarding and offboarding, says Bryan. Nonprofits also struggle with data sprawl, having information scattered across multiple platforms and systems without a cohesive strategy. They end up using a chaotic mix of tools, “a local server, Dropbox, Google Drive, OneDrive, SharePoint, an email client, a variety of spreadsheets, a homebrew Access database, a nonprofit fundraising platform, plus various state, local, or federal portals that they must report results back into,” says Bryan.
This fractured approach creates serious operational challenges for nonprofits. “How do you prove that you’re doing what you said you did? How do you communicate that with your donors or your donor prospects?” Bryan asks clients.
What’s more, MSPs say many nonprofits don’t realize how badly cybercriminals want the sensitive data they tend to hold, and how easily bad actors could shut down their operations. As a result, they often have a lax security posture characterized by inadequate security controls and outdated systems and equipment.
“And a lot of the time, because they have such an older system, they’re afraid to upgrade, maybe invest in something that could be a larger expense for them,” Krstinovski says.
Adapting to Nonprofit Needs
Whether good intentions or good payment history leads an MSP to nonprofits, it takes specific strategies to successfully serve them.
For starters, there’s no getting around the tight budgets. Some MSPs offer separate nonprofit pricing, but there’s more you can do. Krstinovski has found success helping nonprofits navigate vendor discount programs they often don’t know exist. “Microsoft, for instance, has a lot of discounted programs in terms of licensing that they’re entitled to,” he says. “There’s also instances where Microsoft will give them free grant licenses that they can apply for at no cost.”
Krstinovski’s team also developed a hardware-as-a-service model designed for nonprofits after one client needed 30 new computers but lacked the upfront capital. “We were able to help procure, purchase, and basically add the 30 computers to their plan. Every three years we’ll go in and either replace them, or they’re free to keep the computers after the three-year mark,” Krstinovski says.
It’s also important to tailor your positioning, says Bryan. He advises getting nonprofit leaders to see your MSP as a technology board member who can have conversations about things like tech platforms, not just vendor services. In a sector where many clients don’t even list technology as separate line items in their budget, having a go-to technology authority enables much needed visibility and strategy.
MSPs can help nonprofits prevent costly mistake too. Bryan recalls one client whose leadership hadn’t shared a planned cloud migration with the staff. “We evaluated five products for the client, and then somebody bought a sixth that we never even knew existed.” The result was around $40,000 wasted on hardware and software that were inadequate and unused within six months.
Marketing to the Mission-Driven
Word-of-mouth referrals are the top business generator, plus multi-channel campaigns (mailers, social media, etc.). But nonprofit decision-makers and buying processes are different from most business clients, so using typical B2B marketing could be a mistake.
In most cases, MSPs are dealing with finance-focused decision-makers such as the CEO or CFO, not technical staff. These buyers have specific concerns. “The CFO is the person that’s behind all the different budgets that they have per year. They need something that’s more of a flat-rate type of plan where they know what their spend is going to be and there’s not going to be some hidden surprises,” Krstinovski says.
There may also be additional, atypical stakeholders weighing in.
“Most decision-makers are a blend of executive leadership, operations directors, and sometimes board members or grant influencers. They’re not just buying IT but investing in a long-term partnership,” says Saikaly.
Bryan stresses the importance of understanding nonprofit budget cycles as well. “Their budgets are usually set three to four months before the fiscal year for them starts. They don’t generally handle surprise well.” So, take note that “surprises” run on a different timeline in this sector.
All of this means MSPs must be more proactive in their planning and communication. You’ll need to set clear expectations and roadmaps for clients whose budget is probably firmly fixed.
Getting Rich in the Niche
While serving nonprofits requires patience and specialized approaches, the business benefits can be substantial. Both Saikaly and Bryan say nonprofit clients tend to be stickier than others.
“Our nonprofit clients have been some of our most loyal, some of our best net promoters and referral sources. They’ve just basically been champions for our business,” Bryan says. He adds that as those clients stick around for three to seven years or more, you’ve solved many of their problems and don’t have to charge a lot for the account to be profitable.
Saikaly says a nonprofit focus creates competitive advantages. “Specializing allows us to be extremely efficient. We know the tools, compliance frameworks, and funding cycles nonprofits operate under. That means we can implement solutions faster, avoid costly missteps, and provide strategic guidance that other generalist MSPs often miss.”
Finally, there’s an important, if intangible, impact on the staff of MSPs who feel good about supporting nonprofits.
“The biggest benefit is purpose. We’re not just solving IT issues; we’re helping organizations that tackle homelessness, education, mental health, and social justice. That gives our work deeper meaning and keeps our team highly motivated,” Saikaly says.
But Still, Choose Wisely
Success in the nonprofit sector isn’t guaranteed, so choose clients that serve both your heart strings and your purse strings.
“If they’ve got fractured leadership, lack a strategic plan or a clear vision, they can be very chaotic and very expensive,” Bryan says. The key is finding organizations that align with your own approach. “You have to partner with clients that look and smell like you do … If you’re a growing business, you’re probably better off doing business with growing organizations … Our best clients are ones that are looking to grow, get better, and iterate.”
Krstinovski says it’s also important to jell beyond business. “We try to connect on a deep personal level with everyone that we work with, especially nonprofits, and just really understand and support their goals and their missions behind [them].”
In short, serving nonprofits successfully demands specialized processes, adapted pricing models, and a genuine commitment to understanding their unique challenges. But for MSPs willing to invest in this approach, it can become one of the most rewarding and profitable segments of their business in the long run.
