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    04 / 22 / 2014

    Non-Profit Trends: Improving Software, Reporting, Collaboration - According to a Study

    Non-Profit Finance Fund SurveyA Challenging Year for Not-for-Profits

    With the help of Bank of America and the Ford Foundation, the Non-Profit Finance Fund (NFF) recently conducted a survey across the not-for-profit sector, enumerating the many challenges organizations face, as well as the solutions they're using to meet those challenges. We found some of those findings interesting, but we can't say they are surprising. An overview of the report, as well as links to the full document can be found here.

    A Growing Demand for Not-for-Profit Services

    The report details the fact that this is a tough time for non-profits. They're seeing a sharp rise in the need for their services, but are unable to increase their funding to match. While the main gist of the report is certainly that the non-profit sector is struggling perhaps as it hasn't ever before, the report also points to some bright spots with regards to how these organizations will rise to the challenge and how technology will help.

    Some of the key findings:
    Non-Profits and the communities they serve aren't able to take advantage of the economic recovery:
    • 80% of respondents reported an increase in demand for services, the 6th straight year of increased demand.
    • 56% were unable to meet demand in 2013—the highest reported in the survey’s history.
    • Only 11% expect 2014 to be easier than 2013 for the people they serve.
    In the next year, not-for-profits will work hard to find new funding:
    • 31% will change the main ways in which they raise and spend money.
    • 26% will pursue an earned income venture.
    • 20% will seek funding other than grants & contracts, such as loans or other investments.
    Financial stability is clearly a huge challenge for non-profits:
    • More than half of nonprofits (55%) have 3 months or less cash-on-hand.
    • 28% ended their 2013 fiscal year with a deficit.
    • Only 9% can have an open dialogue with funders about developing reserves for operating needs, and only 6% about developing reserves for long-term facility needs.
    Non-profits are innovating. In the past year:
    • 49% collaborated with another organization to improve or increase services.
    • 48% invested money or time in professional development.
    • 40% upgraded hardware or software to improve organizational efficiency.
    • 39% conducted long-term strategic or financial planning.
    Respondents said that more than 70% of their funders requested impact or program metrics.
    • 77% agreed that the metrics funders ask for are helpful in assessing impact.
    • Only 1% reported that funders always cover the costs of impact measurement; 71% said costs were rarely or never covered.

    Apart from the overall struggle for funding made clear by the survey, we wanted to point to 3 main highlights:

    Non-Profit Process Outsourcing

    First, the notion of collaboration is an important one. Our experience is that non-profits are seeing huge advantages to outsourcing some or all of their business processes, allowing them to focus on their mission rather than spending valuable time and money on staffing and training for IT, HR, and especially Finance and Accounting.

    Financial Management Software

    Secondly, the fact that 40% of respondents said they have or will be upgrading the technologies they use to provide their services is a positive trend. We've found that new cloud-based accounting and fund management software from companies like Intacct and Orange Leap are changing the game, and allowing organizations to think and plan strategically rather than remain mired down in the day-to-day processes of running the organization.

    Reporting and Analytics

    And lastly, the fact that the vast majority of funders are demanding impact metrics means that new technologies will have to be leveraged to provide the kind of reporting, analytics, and planning capabilitites non-profits will need, both to run more efficiently and cost-effectively AND to provide their funding sources with the piece of mind that their contributions are indeed making a difference. Without solid numbers to give assurances, organizations may find themselves losing the too-few funding sources they already have, and find themselves less able to make the case for funding from new sources. And if the funding sources can't or won't pay for these metrics, then organizations better be using finance and accounting software with powerful reporting and analytics built in.

    AcctTwo Can Help

    Guiding non-profits through the different choices available when it comes to outsourcing their accounting processes or moving to a cloud-based financial management solution is what we do. Whether your organization needs better tools and technology to manage its finances, or if you’re interested in having AcctTwo manage some or all of those finance functions for you, we’ll provide you with a complimentary assessment of your finance and accounting function –just fill out the short form below.

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    Baker Tilly curates, integrates, and optimizes the right technology stack for your organization. We layer in our own proprietary “last mile” solutions. And we offer these technologies either via a Software-as-a-Service delivery model, where your own Finance function manages the day-to-day use of the technology, or via a Finance-as-a-Service delivery model where we run your accounting operations and provide the outcomes you need. Here are some additional resources that may help you find solutions for your challenges. Or schedule a discussion to go over your needs and goals now.

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