In this Part I of a two-part series, we examine the changing role of nonprofit finance professionals in the digital world.
Financial professionals worldwide are witnessing one of the most significant changes to their profession since the introduction of the automatic calculator. Technology, and especially automation, is tackling more important tasks than ever before.
But just because many of the tasks that used to be performed in the finance and accounting departments are being automated, doesn’t mean the role of financial director, auditor, or CPA will be obsolete. The opposite is true! The roles are evolving and growing, not dissolving, and with them comes a new challenge for today’s nonprofit financial managers.
What’s Driving the Change?
Change doesn’t occur in isolation. It’s driven by a variety of factors, including individual choices, business decisions, marketplace factors, and the pace of innovation.
Technology follows these changes and adapts, evolves, and incorporates new factors based on what people demand and need. For example, nonprofit accounting and finance software automates many of the processes that once dominated the accounting department. With such software, you can reconcile monthly bills, set reminders for invoices, and update accounts quickly and easily.
It hasn’t replaced accountants. Instead, it’s made the accountant’s job easier. Accounts can now spend time reviewing figures and interpreting them, consulting with staff to make important decisions about budgets and how funds are spent, and weigh in on decisions that impact the overall organization.
Time that was once spent keying numbers into spreadsheets can now be devoted to understanding and interpreting the numbers for other people in the organization. With a better understanding of the numbers, new action plans can be formed that benefit the organization and its constituents.
Who are your customers? They are the people you serve (constituents) as well as donors, members, and the public. Anyone who interacts with the services or goods you provide is the customer.
Technology is transforming interactions with customers into what’s been dubbed “customer empowerment.” Customers demand faster, personalized service. Other industries provide them with unique experiences and special services. They’re starting to expect that from nonprofit organizations, too.
Although as a financial director you may interact directly with customers, your work indirectly affects how they experience the organization. Donors, for example, may expect personal thank you letters.Tracking their donations using accounting and finance software, then acknowledging their impact on the organization and sending receipts for tax purposes customized to their needs may be something you and your department can do.
Artificial Intelligence (AI) and Nonprofits
Although AI sounds like it’s a bunch of robots running the show, it’s a term for computers that learn, build, and grow. AI can be used to set reminders for bill payments, analyze research to develop new and better products, and much more.
The Brookings Institute states that nonprofits are showing a greater interest in machine learning, AI and data, and analytics. And why not? With this level of data and analysis, nonprofits can provide better services and do more to fulfill their mission. Peter Drucker once said, “What gets measured gets managed,” and the same holds for nonprofits.
Nonprofit financial professionals may find themselves part of teams analyzing new software or technology that incorporates AI, data and analytics, or creating parameters for data-led programs and projects. They may become part of the selection team for new software to run the marketing lists or power donation campaigns. No longer are they relegated to spreadsheets and ‘bean counting.’ Instead, they’re counting pixels and probabilities and helping to solve complex problems for their organizations.
The role of the nonprofit financial professional has evolved considerably over the years. Technology continues to drive much of the changes that we see and will continue to do so for the foreseeable future. In next month’s installment, we’ll take a look at how technology drives the hiring process in the nonprofit environment. Check back our next article.
Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.