The benefits of flexible technology

**Can replacing outdated systems free your nonprofit to do more with available funding and become more flexible – all at the same time?**

Investing to make a difference

According to The 2020 Nonprofit Leadership Impact Study, one third (33 percent) of nonprofits have invested in tools to make it easier to optimize funding allocation, including software that enables data insights and smarter decision-making.

But the majority (64 percent) say they are unable to implement modern digital technology systems due to budget constraints, despite saying they would like to do so.

A modern solution built for nonprofits should help you keep track of grant funds and associated restrictions with a high degree of flexibility. It should include a single, nonprofit-specific ERP system fully integrated with other functions like procurement, accounts payable, general ledger, accounts receivable, people planning, travel & expenses, timesheets, sub-awarding, and reporting.

33%

of nonprofits have invested in tools to make it easier to optimize funding allocation*

_{* The 2020 Nonprofit Leadership Impact Study}

64%

say they are unable to implement modern digital technology systems due to budget constraints*

_{* The 2020 Nonprofit Leadership Impact Study}

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Your funding, optimized

Your solution suite should include a grant allocation engine and a post-award funding management module to help you optimize funding allocation. And everything should be connected across the entire enterprise via a single source of truth, providing relevant, easy access to real-time data.

Your ERP should let you link grant funds to project management, resource planning, procurement, and accounting workflows upfront, with the appropriate restrictions included, and with as much system-led control as possible. This helps avoid errors or misinterpretations, because data entry happens only once, while improving the transparency of project progress in real time.

All these features are currently available and already in use by nonprofits around the world. Looking to the future, we even foresee the development of a rules engine that uses machine learning to suggest the best way to allocate grant funds based on the agreement and associated rules and restrictions — the user would only need to agree on the proposed allocation, and rules could be tailored for each donor.

Better cost allocation

Your nonprofit ERP solution suite should also include a grant allocation engine which allows project spending to be allocated to the optimal source of funding, resulting in more spend allocated to grants and reimbursed from donors. This will give you excellent visibility of project requirements and status so you can assign and reallocate funds to where they will make the greatest impact.

The right nonprofit-specific software should help you reduce indirect costs by helping you allocate more costs directly to programs. The high degree of granularity in today’s systems means that, for example, if your organization buys supplies that will be used for multiple projects, it can even split small costs between program and administrative funds.

With the right software, your peoples’ time can also be more accurately allocated to programs, too; and if someone is assigned to several programs, the system should be capable of recording how long they spend on each.

Improved reporting

With a modern system, data is up-to-date all the time, so there is no lag to get data in from various sources, and many reports can be generated on-demand. Better accounting and reporting can also help in cases where funds need to be reported after the fact for reimbursement: getting more of your costs covered because of lower effort and higher confidence in allocating spend.

Plus, reporting isn’t only for donors. Nonprofit leaders and people in the field can benefit from increased visibility of spend against program performance. This enables more agility and responsiveness to insights on spend versus program progress. As a result, funds can be redirected to where they will make the most difference.

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Reduced system costs

Finally, traditional IT procurement models involve an upfront capital purchase and a standing maintenance charge, both of which have to be accounted for as indirect costs.

Today, you can invest in the right technology on a software-as-a-service (SaaS) basis. This means you can reduce upfront capital expenditure while creating predictable ongoing operating expenses, which are easier to budget for and lower overall costs.

Read the IDC report