John,
Since I support "non profits" myself

...
Let's rather start with the basics:
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We know now: Your budget is 1500 (us)$
8 users - and lets assume this doubles at max
You recommend: switch, ups, tape backup
BUT WHAT DOES YOUR NP-ORG DO? - pro bono deskwork or heavy database & storage...?Some thoughts:
* 16port switch (= double current need) seems ok and is l.t. 100bucks - buy!
* ups (?)... do you have such unstable mains? - Make it a "breaker only for the server" first...
___IF still "YES", buy a ups with sme support that will last for just a few minutes while SME cleanly autoshuts.
___SME has built in ups-software. For locally available brand with easy install, search this forum ...
* Tape backup, like k_graham says, can be "virtual backup" and NOT cheap ...
___IMnsHO it all depends on the type/amount of data you have to save. RAID1 in SME is "the cost of a 2nd HD".
___(and installation is as easy as answering a question or two at install).
___Then you could backup once a week/once a month to DVD.
___If you have to backup Gigabytes of Data (where you will not be happy with your budget anyway) think "removable HD".
STAY WITH STANDARD HARDWARE - DELL-POWEREDGE is ... a PROLIANT (mostly) isn't.
Remember: Your local PC-Shop may be willing to support too...and for gateway/server 1GHz is quite OK!
Here's the 400SC Specs:
http://www.dell.co.yu/servers/PE400SC/pe400sc.pdfthey are a good guidance for a search.
* buy at least 256MB RAM
* buy the/a 120Gb HD (it's fast too)
...and DO USE GOOD NETWORK cabling .-)
...no mouse

...and a loaner for keyboard, graphics card and monitor are sufficient if the Bios supports that.
Last not least: SME is quite up to the task - go for it.
...give us more data - and you get more thoughts
Regards
Reinhold