What is a Sunk Cost?
A sunk cost is something that all companies and organizations should try to avoid whenever possible. Put simply, sunk costs are items that you have had to spend money on that you will never see again, or be able to get back in any way. For most organizations, it is necessary to take on certain sunk costs; however, many of them can be avoided by careful planning.
Streamlining the company’s costs not only helps to save your organization money, but will help to make your organization more efficient as well. An example of a common sunk cost for many organizations is proprietary software.
This software is rarely customizable and can be rather inflexible as your organization grows and faces new challenges. The licensing fee associated with proprietary software can be expensive and is considered a sunk cost since you will never be able to reverse the cost.
How Does it Effect Non Profits?
Non profit organizations, in particular, should avoid sunk costs. A successful non profit understands that the less spent on running the organization, the better. It simply does not make sense to spend money on software that is not customizable.
Non profits vary in organization and overall goals, so being able to customize your software is crucial to your non profit’s success. The success of most non profit’s lies in their efficiency. Because non profit’s handle the information of numerous volunteers and donators, it is vital that they have a system to be able to organize their contributors to ensure efficiency.
Open Source Software for Non Profits
Open source software is a fantastic solution for non profit organizations seeking software that can be customized to their specific needs. Also, open source software cuts the unwanted sunk costs of proprietary software, saving the non profit additional money while providing even greater services than the average proprietary software.
Open source refers to the open source code made available to the non profit. With access to this code, a non profit is able to completely customize the way that the software will work for them. This ensures that all of the aspects of the non profit are taken care of and that the non profit can run much more efficiently with the help of the software.
For more information about non profit open source software solutions, contact a constituent relationship management open source software provider.
Joseph Devine
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