Planning your biggest fundraising gala of the year. Managing grants and writing proposals. Recruiting and training volunteers. Increasing community outreach. Speaking to legislators to increase policy support. Building awareness campaigns for your mission. Figuring out a way to pay for it all.
As a nonprofit, your responsibilities are endless. When your mind is occupied by so many things directly related to your mission, you're not taking a second to think about the latest technology offerings in your space. It’s simply not a priority.
But when certain technology can make a huge difference in how you operate and manage the money you use to support that very mission, it’s worth pausing and considering your options.
Hiline CEO & Co-Founder, Matt Gardner has a few things to say about the relationship between nonprofits and technology, but make sure to keep reading to see exactly what technology challenges for nonprofits are standing in the way and how to change them to better your financial outcomes.
Technology challenges for nonprofits
For nonprofits, digital transformation is typically the last item on a list of things they're looking to accomplish. Unfortunately, that leads to some pretty frustrating challenges.
1. They lack access for-profits have
Every person within your nonprofit is occupied with funding your mission. No one is sitting there researching the different tools and platforms that can improve your financial operations. That lack of awareness and access alone prevents you from realizing the ways you can use technology to combat everyday challenges.
2. They’re the last to innovate
When you're not staying up to date on the latest offerings, you tend to be the last one to make any changes. Technology innovation happens only when (if ever) you find the time to find the right tools for your nonprofit.
3. They’re extremely manual
Think about how many paper checks and donations come through your doors. Manual processes make it hard to track your accounts payable and increase admin work, leading to disconnected functions throughout the entire organization.
Hiline CEO, Matt Gardner
4. They’re run on a fractional basis
Most nonprofits rely on volunteers to keep the organization running. While very smart, capable people likely make up for your volunteer base, they have less incentive to be truly engaged with your operations.
Unlike for-profit businesses, which compensate their executive boards for their full commitment to their responsibilities, the board alignment nonprofits receive can vary based on their budgets and the time members can dedicate to the cause.
5. They struggle to recruit talent
As noble as the work is, not everyone wants to take a job with a heavy workload for a smaller budgeted salary.
When you do find people to fill executive roles, they’re often operations-oriented and can be intimidated by all the more granular factors of financial operations like HR and payroll.
You, like many organizations, can also hold the (inaccurate) idea that you need a large financial team, even though they don’t always have the budget to build one out. Until you find the money and people to cover those responsibilities, finances are managed as ad hoc tasks.
6. They’re limited in how they use money
Anyone who handles nonprofit finances knows that you can’t use money however you want or need. Most donations and funding are earmarked for specific functions, leaving you wondering how you’ll cover the costs of your mission and still plan (and fund) future needs.
If you think that you can only solve all of these challenges by overhauling the way nonprofits have always run, you might be surprised at how much of an impact the right financial solution can make.
Where technology makes a difference for nonprofits
Nonprofit organizations that learn to see technology as an asset — not just another thing to find funding for — quickly realize their financial operations have been changed for good. Here’s what can result.
1. Decluttered processes
The first thing you'll notice when you start to use a nonprofit accounting solution is how quickly and easily you can simplify your existing processes. You can use the platform to reduce admin work and streamline workflows, bridging the various operations of financial management.
Suddenly, you're not manually inputting numbers into 12 different Excel sheets to manage your cash flow, track your funding, and organize payroll — it’s all in one system. All the paper checks and receipts you keep track of? They're automatically accounted for.
2. Improved bookkeeping
Your resources are limited, so you shouldn't have to spend all your time balancing your books. Nonprofit technology solutions help you set up controls on the front end so you get real-time insight into your financial activity.
By connecting specific financial tools, you can easily track accounts payable, establish credit card spending rules, and manage bills within specific programs. That frees up time on your plate to get back to working on your mission.
3. Optimized financial planning strategies
Forget having to worry about whether or not you're going to run out of money as time goes on. Financial operation systems that are tailored to nonprofit needs use data to navigate your funding flow and create stronger budgets and financial forecasts for you.
In a fraction of the time, you can create plans for long-term financial stability and ensure you maintain stable operations.
4. Enhanced compliance reporting
Compliance reporting can be overwhelming. Even with your best efforts, one mistake can land you in a heap of trouble.
Using nonprofit accounting technology, you can see exactly where your money is and what programs it goes to. With clear performance indicators that show the value of your efforts and meet fund accounting standards, you can streamline audits and meet tax requirements without the stress that comes from doing it manually.
5. Increased fundraising opportunities
Donors want to see that you’re putting the money you’re raising to good use. Financial management technology helps prove it.
As you get greater visibility into your financial operations, you can better predict your cash flow and pivot your fundraising tactics as needed. From there, it’s as simple as pulling detailed reports that communicate your financial stability to donors.
Imagine how much easier it would be to manage your financial operations if you got all those benefits. There are specific ways you want to use technology to make it all happen.
Using nonprofit accounting software for digital transformation
No matter the size of your nonprofit, the right accounting software — and the right people on your side as you use it — seriously improves the way you support your mission. Here’s how:
1. Monthly reporting
Save time and effort when you need to provide information to the IRS, the Financial Accounting Standards Board, or your donors. Pull reports clear, real-time financial data that keep you compliant and maintain trust and accountability.
2. Bookkeeping
Make sure you're balancing your books in line with fund accounting practices. Maintain transparent, accurate books, better manage donations, grants, and overhead, and grow your nonprofit as you sustain pristine financial health.
3. Budgeting and forecasting
Balance short-term needs with long-term stability. Use historical data and financial tools to create detailed plans, budgets, and forecasts that allow you to meet objectives and keep your operations running smoothly.
You can also get a head start with our nonprofit budget template.
4. HR and payroll
Ensure you're taking care of the people who help make your mission possible. Build budgets that account for full-time staff, seasonal hires, benefits, and taxes and adapt for fluctuation during the year.
5. Compliance and tax audits
Avoid falling into hot water with regulatory bodies. Leverage monthly reporting and clean bookkeeping to prove that you're properly handling your finances and meeting any and all tax liabilities.
We make your mission our mission
When you decide to give your time and talents to a nonprofit, you're taking on a noble mission. At Hiline, we do everything we can to support you.
We understand the limited capacity and nuances that nonprofits deal with and make it our mission to deliver accounting services that address your unique needs.
See how we can become your partner as you work to make a difference in the world.
Hiline Nonprofit Accounts Director, Deng Gai
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