Mar 25
0

Successful Fundraisers Rely on Modern Technology

By | Accounting, Accounting Software, Fundraising, Fundraising Software, Nonprofit, Technology, Uncategorized | No Comments

Recent studies indicate that successful fundraisers rely on modern technology to support both short and long-term fundraising goals. This study, “The Future of Fundraising in the AI Era,” published by the Blackbaud Institute, surveyed 559 nonprofits on their fundraising efforts. The results indicate that organizations with digital maturity and a long-term fundraising perspective are most successful in meeting their goals. Here’s a look at their findings and the implications for nonprofits of all sizes.

Most Fundraisers Meet or Exceed Their Targets

One of the most exciting findings from the study is that most of the fundraisers who responded met or exceeded their targets, with 53% experiencing growth and 24% indicating steady numbers.

How did they do it? Without a doubt, digital maturity plays an important role in fundraising success. Digital maturity may be defined as a mindset that incorporates technology across all aspects of work. Technology isn’t seen as a separate platform but rather as an integral part of the workflow.

For fundraisers, this means using technology to solicit donations now but also to cultivate long-term relationships that lead to future gifts. Technology provides an important service, automating marketing and outreach, enabling highly specific targeting, and helping fundraisers maximize limited time and budgets.

Revenue Streams and Missed Opportunities

Another aspect of the study examined revenue streams. Non-education nonprofits focused on four revenue streams: government grants, major donations, individual donations, and foundation grants. What’s missing from this list is peer-to-peer fundraising. Although 61% of survey respondents reported using peer-to-peer fundraising, the remaining 39% did not, representing a potential missed opportunity.

Digital Maturity Stages and Fundraising Success Are Linked

One of the most important findings from the study is the link between an organization’s digital maturity and its fundraising success. The greater an organization’s digital maturity, the more likely it is to meet or exceed its fundraising targets. There is also a compelling link between digital maturity and year-over-year revenue growth.

Many organizations have embraced nonprofit accounting software. Nonprofit accounting and financial management, fundraising and donor management software, and grant and contract management platforms enabled fundraisers to use powerful automation and reporting features to improve their targeting and reach. This software, some of it AI-enabled, allows nonprofits to do more with the same team as before.

Sage Intacct, for example, offers Sage Intacct Fundraising powered by DonorPerfect to automate, modernize, and accelerate fundraising with personalized donor communications. The Intelligent GL feature uses AI to continuously monitor accounting. It can pick up anomalies in transactions. These features, when taken together, help build transparency and trust with constituents. That transparency and trust support fundraising activities.

Technology Opportunities

Given the clear link between digitally mature organizations and fundraising success, nonprofits should seek to maximize technology opportunities. But how can you do this with limited time and budget?

A few tips:

  • Maximize the use of existing technology. Many nonprofits have great resources already at their disposal, but they aren’t using them to their full advantage. Explore your existing software platforms. Are you using all the available features?
  • Set aside training time. Training goes hand-in-hand with technology use. Employees will only use technology that they feel comfortable using. You can help them overcome any barriers to adoption and use by including more training in your schedule. Consider surveying your staff to find out what they want to learn, then planning training around users’ wants and needs.
  • Explore integrations. Integration means systems that work together. They share information seamlessly, allowing you to do more with less work. Integrating accounting, finance, fundraising, and donor management platforms can provide better reports and personalization to improve fundraising activities.
  • Work with external vendors and consultants. If you already work with a technology vendor, don’t hesitate to call upon them for training and advice. Finding and working with a nonprofit consultant is a good idea too. They can help you pinpoint weaknesses in your current systems and find ways to improve them so that your organization can make the most of its existing technology resources and invest wisely in new ones.

It’s become clear that thriving organizations are those that use technology effectively. It’s not that they’ve invested the most money in the latest and greatest software packages. It’s that they have found useful ways to include technology in their daily workflows. They make the most of what they have, and they aren’t afraid to explore new ways to use technology, such as AI, in their fundraising efforts.

Welter Consulting

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 us for more information.

Mar 18
0

How Can Your Nonprofit Build a Strong Financial Foundation?

By | Accounting, Nonprofit | No Comments

“No margin, no mission.” That sign hung on the wall in the marketing department of a large New York City nonprofit. It was a constant reminder that, even though the organization was a nonprofit and completely committed to its educational mission, without sound finances, it wouldn’t be able to function.

Nonprofits often deal with lean budgets. They want to put every penny towards their mission. However, with a focus on running lean, the slightest disruption can jeopardize the organization. And let’s face it: the last several years have been nothing, if not disruptive. From the global pandemic to soaring inflation, financial pressures are mounting.

Smart nonprofits have learned an important lesson: building a strong financial foundation is integral to fulfilling their mission. The following ideas will help you create the sound financial infrastructure you need to maintain operations.

Five Financial Steps to Build Your Nonprofit’s Future

There are five financial steps you can take to shore up your organization’s foundation:

  1. Build a reserve fund
  2. Calculate indirect costs
  3. Incorporate AI into finance
  4. Automate Accounts Payable
  5. Use a specialized nonprofit accounting system

#1: Build a Reserve Fund

Think of an operating reserve fund like an emergency fund. It gives your team time to adjust and adapt if the funding environment changes suddenly. You’re not forced to make snap decisions but can take a bit more time to figure things out when you have enough emergency cash reserves to continue operations.

To build a reserve fund, identify the amount you might need to keep operations going for 3, 6, and 12 months. Just like individuals are urged to have a cash cushion on hand that covers daily expenses for up to a year in the event of job loss, so too your organization should have a cash cushion. Once you figure out the expenses for each time period, review your financials to see how you can set aside some funds for the operating reserve fund. Blackbaud provides a toolkit to help nonprofits calculate operational reserve funds.

#2: Calculate Indirect Costs

Indirect costs can be tricky. Many nonprofits miscalculate them. To calculate indirect costs, consider expenses spread out over multiple programs or projects, such as rent or utilities. These are expenses incurred by the entire organization, whether a specific program remains or not.

#3: Incorporate AI Into Finance

AI can automate many processes, including common financial processes. Before investing in new platforms, examine your current systems. Many have been updated to infuse AI into existing software. You may have powerful AI-enabled tools available to you now that you can use without buying new software. See if you can use existing AI resources more effectively.

Be sure to review internal AI use policies. If no policies exist within your organization, now is the time to create them. The continued advancement of AI across every facet of business shows no sign of slowing. Make sure your organization is prepared for an AI future.

#4: Automate Accounts Payable

Automation has also been added to many software systems, including accounts payable automation. It’s a time-saving advantage for busy nonprofit accounting departments. Be sure that automation is right for your organization. Examine the time spent manually cutting checks. If it’s significant, automation may speed things up.

#5: Use a Specialized Nonprofit Accounting System

Generic small business accounting software or spreadsheets may be fine to track your finances when you’re just starting your nonprofit, but as it grows, you need a more robust system. A purpose-built, specialized nonprofit accounting system or fund accounting system helps you monitor expenses and income, manage grant-funded projects more easily, and comply with nonprofit accounting guidelines. Speak with Welter Consulting to learn more about whether stepping up to a fund accounting system can help your organization prepare for the future.

Welter Consulting

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 us for more information.

Mar 13
0

Five Tips for Successful AI Adoption

By | Nonprofit | No Comments

Unless you’ve been living under a rock, you’ve heard about artificial intelligence (AI). Generative AI use has exploded in recent years. According to Giving USA, about 58% of nonprofits use AI as part of their marketing efforts, while 68% use it to analyze constituent data.

AI isn’t limited to marketing. It can also be used in finance and accounting, operations, and other departments. It has the potential to help you do more in less time, which sounds like every nonprofit’s dream, right?

Before you jump on the AI bandwagon, there are several things to consider. Below you’ll find tips for successful nonprofit AI adoption.

What Is AI?

AI is short for “artificial intelligence.” Early AI models were able to answer simple questions based on large databases—think of online chatbots, for example, which were really early-generation AI models. From 2023 on, the world came to know generative AI, another AI model that leverages large datasets. However, generative AI doesn’t just answer simple questions. It can combine multiple data sources to generate new answers. The latest AI model, agentic AI, can perform tasks. Agentic AI can act autonomously to achieve complex goals, all without human intervention. Think of agentic AI as “set it and forget it” —you set the rules, and if it’s working right, it follows these rules to perform complex tasks.

AI Models, Public and Private

There are many AI models and platforms available to the public now. These range from the ubiquitous Microsoft CoPilot, Chat GPT, Perplexity, and Claude models that perform searches, answer questions, and generate text-based responses. Many of these models offer a public (i.e., free) version and a paid version.

Smart Steps to Add AI to Your Nonprofit’s Technology Stack

Before adding any and all AI platforms to your nonprofit’s list of technology, there are several considerations. Take these smart steps before adding AI to your nonprofit tech stack.

  1. Choose your goal. Why do you want to add AI to a particular process? Is it to save time, do more, or add to an existing process?
  2. Look at what you have already. Many software companies have added AI to existing subscriptions. For example, Microsoft added Copilot to its suite at no extra charge. Canva, a popular cloud-based graphic design platform, has added AI-image generation to its paid platform. Before investing in new AI software, explore the options available in your existing subscriptions. Do they meet your goals?
  3. Determine governance and guidelines. It is important to set the rules now for AI use before your team jumps in. How do you wish AI to augment workflows? Who can use it and how? For example, one organization created a very specific AI governance policy that explicitly allows staff to use AI for brainstorming, researching, and creating outlines, but never for original content generation. That must be done by a person. Most organizations also state what can, and cannot, be shared with AI models. For example, any documents already in the public domain, such as marketing materials, may be uploaded to an AI platform, but never proprietary information or financial information.
  4. Examine and clean data. If you’re going with an internal AI platform, such as an internal, organization-wide Microsoft Copilot initiative, the old adage “garbage in, garbage out” still holds. AI that can access your company’s folders must have clean, duplicate, and error-free data (and documents) upon which to base its responses. It cannot, for example, distinguish between version 5 and 6 of an HR policy; it will use both to create a new document if you have both within your files, even though you know that version 6 supersedes version 5. It takes time to go back and clean out old files, but it’s a much-needed exercise to prevent internal AI models from making mistakes.
  5. Improve AI fluency. Using AI requires skill and time. How will your team learn how to create prompts, for example? Be sure to factor in training for teams that will use AI. They must learn not just when and why to use AI but how to use it responsibly.

Responsible AI Use Starts at the Top

Responsible AI use starts at the top of the organization. Leadership must guide the entire team proactively in the appropriate use of AI tools and platforms. Establish guidelines, training protocols, and more now.

Welter Consulting

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 us for more information.

Feb 27
0

Why Keeping Duplicate Records During Accounting System Implementation Is a Bad Idea

By | Accounting, Nonprofit | No Comments

Everyone is excited (or nervous) when word gets around that a new accounting system is being installed. Someone gets more nervous than others and decides to make a “shadow system” —a duplicate of the current accounting program. Perhaps they plan to keep the information on spreadsheets or in database files “just in case” the whole new system crashes. Or something like that.

The fear is real, and so is the problem. But let’s talk about a bigger problem: duplicate or shadow systems are just plain bad for accounting departments, and here’s why.

Don’t fear a new accounting system. Fear the repercussions of shadow accounting systems. Duplication is a bad thing when it comes to accounting and can lead to data inconsistencies, wasted resources, and accounting mistakes.

What Exactly Is Duplicate Data Entry and Why Does It Happen?

Duplicate data entry occurs when employees record the same financial transactions or information in both the new accounting system and an unofficial secondary source. They may keep a spreadsheet or continue to maintain the old system if it’s not sunsetted.

The problem is that it is maintaining a parallel financial universe. This parallel universe does not have the same controls or oversights as the new system. And it increases the risk that people may refer to this shady, parallel universe as the source of accounting truth rather than the new platform.

People create secondary systems for many reasons. Mostly, it’s fear of the unknown. Sure, a new accounting system sounds good, but it’s always a big leap of faith to try something new. To protect themselves against this fear of the unknown, they keep duplicate records. Poor change management, a rushed implementation of the new accounting system, inadequate training, and a lack of leadership buy-in also contribute to the fear of change, which inspires people to create duplicate systems and backups.

Why It’s a Problem You Can’t Ignore

It would be great if you could just chalk up the secondary system to so-and-so, who is always a worrywart, and go on with your day. But you can’t ignore it. Duplicate systems are problematic in many ways.

They create:

  • Data inconsistencies and errors, which can lead to misclassifications
  • Mistakes that compound over time because they aren’t corrected
  • No single, authoritative source of financial truth, which leads to more mistakes
  • Wasted time and resources—after all, the time spent updating the second system is wasted time!
  • Security and compliance risks—sensitive data may be stored in ways that anyone can access, leading to security nightmares
  • Poor decision-making because financial records are inconsistent

Duplicate Systems Are a Warning Sign

Duplicate or shadow systems are actually a warning sign of a deeper problem. They are a sign that the team is nervous about the new system implementation. To address the root of the problem, you must take a step back from “We need to get rid of the shadow system” and focus on “How did we get to this point in the first place?”

First, focus on the new system. Have you emphasized proper training so that everyone feels confident they can use the system and get the information that they need? Greater familiarity with the new accounting system may be more persuasive than anything else when it comes to getting staff to relinquish duplicate systems.

Ensure that the company’s leadership is part of the process. They must not only buy into the new system, but they must take the lead in using it. When the team sees that leadership is fully onboard, they will be more likely to use the new system too.

Lastly, be clear that you do not duplicate systems. No exceptions. Allowing exceptions weakens and undermines your position that the new system will be better than the old one.

Eliminate Duplicate Systems and Move on to the New

Duplicate systems can feel like a safety net during times of transition. Any transition to a new computer system, whether it’s the accounting system or a new storage system, can feel uncertain. But allowing shadow systems just sets up problems and reduces adoption of the new system. Get rid of the fear first, then ensure understanding and executive buy-in. These steps will go a long way to keep shadow systems away.

Welter Consulting

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 us for more information.