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How to align finance, tech and talent to battle nonprofits’ top challenges

May 18, 2021

Wipfli recently released the findings from its fourth annual Nonprofit Priorities Benchmark survey, which asks nonprofit employees to share their top priorities, challenges and concerns for the coming year. Workforce-related issues dominated the list in 2021, as well as fundraising. 

The top three challenges nonprofits say they’ll face this year:

  1. Employee engagement/burnout
  2. Fundraising
  3. Recruitment/workforce

These challenges are distinct but also interconnected. For example, talent management affects financial growth and impact, and technology can improve engagement among both staff and funders. That means the solutions must also be aligned.

Nonprofits can make progress on their top priorities by getting their finance, technology and talent strategies in sync. 

Finance

Fundraising affects a variety of operations and decisions within the organization. In most cases, funding affects which programs you offer and how many constituents you serve. But so does staff. 

Nonprofits can only serve the community as far as staff capabilities allow them to. So, there’s the balancing act: to maximize community impact with the money you have, you need the right talent to use it effectively. Nonprofits also need organizational support, such as policies and procedures that promote efficiency.

The natural inclination is to direct every dollar possible toward programming — but nonprofits need to take a longer-view approach. Programming is essential, but so are the human resources and technology to support them. Consider putting some key budget toward compensation and incentives, especially if positions are essential, there’s high turnover or you’re concerned about losing high-performing employees. Develop a strategic approach and philosophy for compensation administration, keeping in mind that you’re competing.

Compensation that’s not competitive or equitable can cause considerable disruption in the organization. Equitable compensation, on the other hand, plays a role in maintaining employee engagement. 

Talent

Getting people excited about work is paramount in any organization. Here, nonprofits have some advantage because of their mission focus — but that’s slowly fading, since more for-profit organizations are connecting their work to positive and lasting impacts. Nonprofits have to create direct and powerful connections between the work they do and the organization’s strategic goals and impact. And it’s important to create that connection right away, even during onboarding. 

Employees also want to know “what’s in it for them.” What’s the pathway for professional development? How will the position prepare them for what’s next? More time and attention need to be spent on the employee experience; coaching and development initiatives are a great place to start. There needs to be organizationwide commitment to invest in resources that retain and develop talent.

Tech

The days of having standalone payroll and HR systems are gone. Now, the whole employee lifecycle — from pre-employment to separation — can be managed through human resource information systems (HRIS). 

HRIS programs can create efficiencies by connecting to job boards and other recruitment mechanisms, and by providing an efficient and seamless hiring experience for new employees. They can help manage all aspects of human resources, including performance review processes, compensation administration and annual benefits enrollment. In addition, all information is stored in one confidential platform with reporting capabilities. 

Other tools like Predictive Index® (PI) can help you understand behavioral norms for employees, and serve as an objective metric for hiring, promotion or assignment decisions. Behavioral data can help you hire the right people for a position or your organizational culture, and it gives managers a better understanding of what motivates someone or “makes them tick.” That’s practical and important insight to have right now since many teams are physically separated because of the COVID-19 pandemic. 

Understanding behavioral norms can strengthen communication and effectiveness among teams — which has bearing on engagement overall.

Moving forward 

Every challenge is also an opportunity. In 2021, nonprofits can grow through their fundraising and workforce challenges — and emerge stronger.

For more tips and trends related to nonprofit priorities, download the 2021 Nonprofit Priorities Benchmark report. Or, register for finance, technology and talent sessions during the Virtual Training Experience this summer.

Related content:

3 ways to address and prevent employee burnout
4 ways behavioral data helps you improve employee engagement
What nonprofit organizations need to know before upgrading technology

Author(s)

Brian R. Gaumont
Principal
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