A "cloud" solution is generally typified by remote access to computing resources and software functionality and frequently involves the storage and maintenance of related data. Today, cloud computing facilitates applications, e-mail, peer-to-peer communication, content sharing, and electronic transactions or storage for nonprofits. In many respects, the “cloud” has become a synonym for the “Internet” as cloud computing now encompasses nearly all available computing services and resources.

Cloud offerings utlilized by nonprofits tend to come in three flavors. Infrastructure as a Service (IaaS) offerings deliver information technology infrastructure assets, such as additional computing power or storage. Platform as a Service (PaaS) offerings provide a computing platform with capabilities, such as database management, security, and workflow management, to enable end users to develop and execute their own applications. And, Software as a Service (SaaS) offerings provide software applications on a remotely accessible basis. SaaS offerings are probably the most commonly understood type of "cloud" solution.

Cloud computing solutions can avoid the traditional need to invest in computer hardware and software resources required for on-site computing power and related storage equipment and space. Costs therefore evolve from capital expenditures for information technology equipment and resources to operating expenses for the cloud providers’ fees. Cloud computing also can minimize the need for on-site, technical support service expertise that would traditionally be required to implement, maintain, and secure computer hardware and software resources. Consequently, cloud computing offers nonprofits software and storage capacity and capability without the need to invest in as much infrastructure, personnel, and software licensing.

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