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.
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.
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.
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.
Using advanced technologies, such as a digital assistant, modern systems allow you to present a pre-populated timesheet for staff to review and approve. This improves the accuracy and utilization of people’s time allocation to programs.
It also drastically improves People Experience. Reducing the administrative impact on your people and giving them more confidence in their project progress frees them up for more valuable work and more creativity, ultimately allowing your teams to do more of what matters: making a positive impact in the world.
Wanda – Unit4 Digital Assistant
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.
