In today’s fast-evolving digital landscape, nonprofits and associations rely on a complex web of technology (including CRMs, email marketing systems, social media tools, and data integrations) to engage members and advance their missions. Yet, many organizations find themselves hampered by outdated systems, inefficient processes, and a patchwork of solutions. This hidden challenge is known as technical debt, and its impact can be profound, leading to lost opportunities, wasted resources, and strategic stagnation.

Technical debt is not just an IT issue; it’s a strategic, operational, and financial challenge. And if left unaddressed, it can quietly erode your organization’s ability to deliver value, connect with members, and grow. So what exactly is technical debt, and how can associations calculate and manage it?

What Is Technical Debt?

Technical debt refers to the cost of delaying the reworking of your systems. This can include using shortcuts, continuing to use outdated technology, or implementing temporary fixes to avoid larger modernization projects. It’s like borrowing against the future—you save time (and maybe money) today by sticking with workarounds, using “Band-Aid fixes”, or delaying upgrades, but you incur debt in the form of higher expenses for future projects, inefficient operations, and lost opportunities.

It’s important to note that technical debt isn’t always the result of bad decisions. Sometimes, technical debt can be a strategic decision, like choosing a quick fix to meet a deadline, knowing you’ll need to come back and address it later. But when unmanaged, this debt compounds. Almost all organizations will need to incur some technical debt at some point, but it’s important to find the level you’re comfortable with—either as a whole or on a per-project basis.

Here are some common signs of technical debt:

• Outdated or unsupported platforms
• Unintegrated systems
• Poor data quality
• Absence of necessary systems
• Manual processes that should be automated
• Lack of staff training or documentation
• Insufficient omnichannel capabilities

Individually, these issues may seem like annoyances. Together, they form a web of inefficiencies that hold you and your organization back.

The Risks of Technical Debt: Lost Opportunities and Wasted Resources

Unchecked technical debt isn’t just a technical problem, it quietly drains your organization’s time, costs money, and hampers impact. When your technology can’t keep up, you focus on workarounds instead of member engagement, personalization, or innovation.

Consider these real-world impacts:

• Lost revenue: Poor data quality and outdated or disconnected systems can prevent you from reaching the right people, sharing your message effectively, or personalizing messaging.
• Reduced brand value: Poor user experiences, inconsistent communications, and lack of innovation can erode your organization’s reputation and member loyalty.
• Missed opportunities: Without the right tools, your team can’t implement new strategies or respond to member needs.
• Security and compliance risks: Outdated or poorly integrated systems may expose your organization to data breaches or regulatory violations.
• Employee frustration and burnout: Manual tasks, lack of automation, and difficult-to-use systems make everyday work harder than it needs to be.

Case Study: An Outdated Email Marketing System

Let’s focus on this one example of technical debt: An association using an outdated email marketing system found that staff had to manually segment lists to send communications, resulting in two full-time employees dedicated just to this workaround. This not only inflated costs but also limited the organization’s ability to engage members effectively and grow its base.

The hidden costs of standing still quickly add up. But how do you know the true cost, in dollars and cents, of your technical debt?

How to Calculate Your Technical Debt

We developed a four-step model to help you calculate technical debt and begin building a roadmap for change.

Step 1: Document the Current State

Start by taking inventory of all the systems in your tech stack. List the platforms, tools, and customizations you use. Include manual workarounds, unsupported plug-ins, and known pain points like duplicate data or slow performance.

The goal is to make hidden debt visible by capturing the full scope of inefficiencies.

Let’s take our case study about the outdated email system. In this example, here are the issues we’ve uncovered:

System	System Costs	Issues
Email marketing system ("old and janky")	$40,000 per year for licensing	•Lack of audience segmentation •No customer journeys •No omnichannel delivery

  

Step 2: Evaluate the Impact

Next, assess how your current systems are affecting staff efficiency, member engagement, and revenue.

• Estimate the number of staff hours spent on manual fixes, list transfers, or troubleshooting.
• Identify security and compliance risks.
• Estimate the opportunity cost of lost leads, member retention or acquisition issues, and revenue left on the table due to a lack of personalization or segmentation.

This is where your technical debt becomes tangible (the cost of standing still).

In our email system example, this looks like:

Issues	Work Around	Workaround Cost
Lack of audience segmentation	Staff manually cuts lists for each blast email	Equivalent of 2 FTEs supporting email marketing: $300,000
No customer journeys	Communications to members are disjointed, impacting the member experience	10% lower retention (1k members at $150 dues revenue and $50 non-dues revenue = $200,000)
No omnichannel delivery	Staff posts same message across channels	Equivalent of .5 FTE supporting social media marketing: $75,000

So the estimated cost of technical debt totaled $575,000 per year in lost time and opportunity.

Step 3: Envision the Future State

Imagine what your ideal system or process looks like. What capabilities would a new platform give you? What could you accomplish if systems were integrated and staff were trained? Be realistic about your needs and research current solutions on the market. Estimate the cost of implementing the changes, including licensing, training, and staff time.

In our case study, we want to replace the old system with a modern, best-in-class system. So we’re estimating the cost to be:

Ideal System(s)	Licensing Costs	Implementation Costs	Training Costs
New email marketing system (year 1)	$80,000	$100,000	$20,000

In the email case study, the ideal future state came with a one-time cost of $200,000 in the first year, and $80,000 in subsequent years (when implementation and training are no longer needed).

Step 4: Compare the Cost of Debt vs. the Cost of Change

This is where the model comes full circle. By comparing the annual cost of technical debt with the one-time and ongoing cost of modernization, you can make a compelling case for change.

Following through with our case study:

Cost	Current	Ideal
Licensing	$40,000	$80,000
Opportunity cost	$200,000	N/A
Staff salary on workarounds	$375,000	N/A (Staff time repurposed)
Implementation	N/A	$100,000
Training	N/A	$20,000
TOTAL	$615,000	$200,000

Important note: This isn’t your budget. It’s just the cost of the current systems with technical debt, against new systems without technical debt. Staff salary will need to be repurposed to another budget line.

From Assessment to Action

This model only works if you’re realistic about both the current costs and the proposed future state. But once you've documented, evaluated, and envisioned what’s possible, the next step is to build a roadmap. Start with short-term wins that are low effort and high impact. In the mediumterm, tackle major upgrades or integrations. And in the long term, aim to build a unified, modern tech ecosystem that evolves with your organization, while continuing to document and evaluate the technical debt implications of your decisions.

The most important thing? Get started (we have resources to help you). Don’t let perfection be the enemy of progress. Even rough, realistic estimates are better than nothing. Associations that proactively manage their technical debt will be more agile, resilient, and member-focused in the years to come.