Impress donors, strengthen compliance, clarify financials: How ERPs help nonprofits boost efficiency and impact
- A modern, cloud-based ERP system can help your nonprofit organization to operate more efficiently and deliver a greater impact.
- Implement an ERP to help your team automate manual financial and accounting tasks, refocus on higher-level work, build financial dashboards to drive smarter leadership decisions, create data stories to wow donors and assess program outcomes to deploy resources for maximum impact.
- To decide whether an ERP upgrade makes sense, document how much time your team spends on manual, low-level tasks that slow down your work and then consult an advisory firm to discuss what an ERP implementation could deliver.
As nonprofits steer through an era of financial, social and technological disruption, more leaders are turning to upgraded systems to help their organizations work more efficiently and boost impact. And a modern, cloud-based enterprise resource planning (ERP) platform is the foundation for this effort.
A new ERP system helps your nonprofit to operate more effectively by allowing you to automate routine tasks so your staff can focus on higher-level work. You’ll also be better positioned to tell your nonprofit’s story through data, allowing you to impress donors and satisfy auditors or regulators.
Keep reading to learn more.
Why should nonprofit CFOs care about an ERP system upgrade?
The business world has long prioritized efficiency. However, driven by a shrinking federal funding pool and increased regulatory scrutiny, pressure to lean into cost-cutting or optimize operations has reached nonprofits as well.
Private donors, foundations, and grant monitors expect to see that you’re running a tight ship — and a modern accounting system like an ERP makes doing that easier for your nonprofit to achieve. It also allows you to find efficiencies that give you room to redeploy your efforts towards more valuable areas.
Also worth noting: Potential new employees simply don’t want to work with legacy systems. If you’re running a paper-based accounting system that exists mostly in the minds of a small handful of your team members rather than as documented processes, you’ll have a tough time recruiting and onboarding new staff when those current team members move on or retire.
How does an ERP help your nonprofit to cut costs or redistribute time to higher-value tasks?
A modern ERP helps your organization operate more efficiently by automating or speeding up time-consuming financial and accounting tasks that your team used to do by hand. This allows your staff to focus on higher-value work while your leadership gets clearer, more current data to guide their decisions. For example, Easterseals New Jersey demonstrates how modernizing an ERP system can support the addition and integration of new client services, as highlighted in the case study.
Automate routine tasks
Nonprofits that still operate on legacy accounting systems or spreadsheets spend a great deal of time simply organizing data. Your team may have to invest dozens of hours a month manually collecting data from multiple disconnected systems and then painstakingly turning it into financial, accounting or compliance reports.
A modern ERP allows you to automate processes that you previously handled manually. Your ERP can essentially serve as a hub for your various systems, allowing you to automatically pull financial data and put it into dashboards, models, or reports so that it can be quickly available for auditors, donors or your leadership.
Focus on higher value work
Because your team will no longer have to put so much time into gathering data or doing basic reporting, you’ll be able to deploy them to greater effect. Essentially, any task you can automate with an ERP system is an opportunity for you to refocus your team’s efforts on work that is more valuable to your organization, like financial forecasting or assessing the impact of your programmatic work.
Higher-value work also often has the benefit of being more interesting and engaging for your individual team members, which can reduce the likelihood of burnout.
Understand your financial picture
Automating your financial reporting processes gives you access to real-time (or near real-time) financial data via dashboards. This helps your finance and leadership team get a much clearer understanding of your nonprofit’s current financial picture, rather than relying on data that may be weeks or even months old by the time it gets in front of decision-makers.
Make smarter strategic decisions
Clearer financial data and an accounting team freed up to focus on modeling and forecasting empower your leadership to make smarter strategic decisions. Your leadership and your board will be able to assess multiple strategic options, discern the impact of current programs, steer away from waste and move your organization in a more sustainable direction.
How does an ERP help your nonprofit to boost impact?
A modern ERP solution can also help your nonprofit increase impact to better serve your constituents. This is because an ERP can help give you the tools to impress donors, as well as track your impact so you can refocus your resources on programs that make the biggest difference in your constituents’ lives.
Simplify your 990 process
An ERP makes it faster and simpler to accurately complete your 990. But this won’t just save your team time — it will also impress donors. Both foundations and some individual private donors will closely scrutinize your 990 before making a donation, so any mistakes or inaccuracies can be costly.
Track your organizational impact
Your ERP can also help you to track program financial performance and impact to get a clear sense of what’s working and what isn’t. You’ll have more data to assess program performance so you can really understand what your organization is actually accomplishing from a constituent services perspective.
Tell data stories to wow donors
That program impact data will also be incredibly useful for attracting donors. Even small donors on crowdfunding platforms increasingly want to know what kind of outcomes their dollars will help to create, while larger donors or foundations will often look for an in-depth accounting of your impact before making a substantial commitment.
Your ERP can help give you the ability to tell data stories around the work that you do, allowing you to highlight not just individual anecdotes but rigorous, data-backed assertions about how your donors can help transform lives if they choose to give you their support.
Focus on your most effective programs
Finally, if you have clearer data around program performance, you can also make smarter resource allocations. If your nonprofit runs three programs and two are delivering real results while one isn’t, you’ll have the data you need to decide whether you should continue funding all three or refocus your efforts on the two that are making a significant difference.
What’s next?
Upgrading to a modern, cloud-based ERP system can transform how your organization operates. But getting it in place is a process.
Start by simply paying attention to how much time your team spends doing manual or legacy processes that could be done vastly more quickly with a modern ERP. Notice the inefficiencies that are slowing you down, exhausting your team and hurting your impact. Document all this and discuss it with your leadership and your board.
When you’re ready to actually start the upgrade process, find an advisory firm to help. An advisor can work with your team to determine which ERP platform makes the most sense for your specific needs, then guide you through the implementation process so you can get the new system up and running more quickly and effectively.
An example is how Project C.U.R.E. transformed its operations by modernizing its ERP and technology platform, with additional details in the case study.
How Wipfli can help
We advise nonprofits on improving performance, strengthening financials and adapting to change. Let’s talk about your goals and how tools like a modern ERP system can help you achieve them. Start a conversation.
Let’s make your nonprofit stronger
