MSPs are in business for two main reasons: to provide advanced technical services to their customers and to make a profit. One tremendous, untapped opportunity is selling to nonprofits.
Often, MSPs avoid doing business with nonprofits, assuming they won’t make money because these organizations don’t have enough funds or lack technical knowledge. However, nonprofits can be an excellent source of work for MSPs due to their sheer volume alone. And they have the ability to pay for managed services by raising funds or applying for grants to cover their tech needs.
In 2022, there were nearly 2 million nonprofits operating in the U.S., including 1.48 million 501(c)(3) tax-exempt organizations, according to the IRS. Plus, employment at nonprofit organizations grew much faster than those of for-profit organizations, U.S. Bureau of Labor Statistics data showed.
Industry expert and ChannelPro featured speaker Rosene Johnson defines nonprofits as more than just a tax-designated organization. Rather, they can be cause-based, service-based, or mission-focused. They also can include universities, hospitals, financial services organizations, and associations.
Below, Johnson shares why MSPs should strongly consider selling to nonprofit customers.
How do nonprofits typically get their tech support?
They depend heavily on MSPs. Nonprofits are particularly vulnerable to cybersecurity breaches because they don’t have the capacity to protect their data without help. They also depend on MSPs to stay relevant technologically because they either don’t have the capacity for a senior IT professional or the funding to get the training their professionals need.
How can nonprofit customers benefit MSPs?
There is a huge opportunity for collaboration on both sides. Nonprofits tend to be more collaborative and less competitive, so they are more open to the idea of partnerships. That means MSPs and nonprofits can help each other. In one of my roles, for example, we had a wonderful MSP that provided IT services to us. During our events, the MSP would staff a table to market its services.
How can MSPs overcome the misconceptions that they won’t make as much money from a nonprofit or that the margins won’t be as good?
It depends on the MSP packages themselves. A lot of times nonprofits either want a one-stop shop or an MSP that does one thing very well. They will find money to support those opportunities. But it’s a fair concern, especially if the nonprofit is smaller. If you’re working with an organization with 1,000 employees, you’ll see more revenue than working with a nonprofit with 200 employees.
Other than money, what are some benefits of working with nonprofits?
I’ve seen MSPs donate some of their time per month and use that as a tax write-off, which can help justify that revenue shift. And if you’re working with a nonprofit doing great work, that can be good press for the MSP.
What would seal the deal if an MSP is selling to nonprofits?
It’s about providing value. If MSPs have some type of connection with the cause, that can also make a difference. If there is a heart and mind connection, it will make a difference to the nonprofit.
What research should MSPs do before pitching?
Find out what nonprofits are in your region. There are plenty of resources to do that, including LinkedIn, along with chambers of commerce, and the local United Way. These organizations tend to have a pulse on the challenges facing nonprofits. That helps MSPs get a better idea of what language to use along with the need. Sometimes, it even results in referrals.
Images: Erica Stella Photography
