Automation Drives Philanthropy's Performance

Faced with tight donations and variable costs, DonorsChoose.org must manage every dollar we spend in order to deliver for our customers, provide the accountability demanded by our philanthropic marketplace, and fuel our plans for rapid, yet sustainable growth. For us, meeting these needs requires leveraging technology-based solutions.

Our Mission

DonorsChoose.org is a unique online community designed to fulfill needs and foster innovation in our nation’s public schools. Through our website, teachers can submit their best ideas for materials and experiences that their students need to learn. Any individual can then search these projects and support those that they find most compelling. Once a teacher’s project is fully funded, DonorsChoose.org manages the process of procuring the precise materials necessary to bring that project to life in a classroom, from sourcing and ordering through invoicing and payment.

Two years ago, the majority of this process was done manually. On an operational level, we sent purchase orders and reconciled and paid invoices using paper-based processes. A staff member would take several minutes to send a single purchase order this way, but the more orders we received, the more work we had to do. We knew that soon we would be unable to keep up, risking our service to teachers and donors and hindering our impact on low-income students.

To scale gracefully after national expansion, our long-term objectives were very clear:

• Continue our exponential yearly growth in citizen philanthropists’ support for teachers’ project requests, usually doubling our annual business with suppliers
• Focus on reaching our goal of becoming a self-sustaining organization within five years

We knew applying technology was the only viable strategy for accomplishing both goals.

Our Challenges

DonorsChoose.org needed a solution to provide automated, systemic ways to collaborate with suppliers and capitalize on cost-effective procurement opportunities. Every penny saved is passed on to donors so they can support more teachers’ requests. The more classroom projects funded, the more DonorsChoose.org’s impact grows.

But we faced a number of challenges identifying the right solution. First, as a nonprofit with 50 staff members, DonorsChoose.org lacked deep e-procurement expertise and had no bandwidth to set up, host, and manage a complex in-house system. We had to find a tool that would be delivered on-demand as a fully scalable service.

In addition, our unique business model requires tailored flexibility. In processing tens of thousands of small orders for our customers across the country, DonorsChoose.org requires quick and detailed visibility into every step of the procurement process. Our teachers need to know the status of their orders and the shipping info for every box of learning materials routed to their classrooms. Our donors expect full transparency into every single transaction – whether for $10 for crayons, $100 for dictionaries, or $1000 for microscopes.

Because the technological capabilities of our suppliers vary widely – some lack any e-commerce capabilities and some have hugely complex, automated systems – we needed a solution that could accommodate all suppliers so as not to limit teachers’ creativity when requesting resources for their students.

The timing of the project was also a factor. We would be enabling new suppliers onto the system at the same time we were deploying batch ordering, so the solution would need to be able to convert thousands of purchase orders to a new format from legacy records. The solution would need to integrate seamlessly with our existing procurement system to avoid any disruption to our operational workflow.

Additionally, as a small nonprofit organization, we had sensitive resource constraints. We were not big enough to absorb cost overruns or handle a product that could not be easily fixed or enhanced.