Introduction

In a time of rapidly changing technology advancements and growing reliance on digital solutions, the nonprofit sector is leveraging technology solutions to maximize impact and efficiency at a faster pace.

Sage Intacct’s 2024 Nonprofit Technology report offers a deep dive into technology use in the nonprofit sector. With valuable insights from nonprofit finance leaders from across North America, this report not only sheds light on current technology trends but also provides strategic foresight into the changing landscape of nonprofit operations.

As stewards of financial integrity within their organizations, nonprofit finance leaders play a critical role in guiding the adoption of technologies that align with mission-driven goals. The survey conducted for this report captures the perspectives of these leaders, exploring the challenges faced, the opportunities seized, and the technologies that are shaping the nonprofit sector in 2024.

Key Takeaways

Entry-level accounting software cannot rise to the needs of nonprofit challenges especially during economic instability.

When discussing internal challenges in the survey one respondent from a public benefit organization noted their biggest challenge was the “increasing concern of whether QuickBooks can keep up with our needs.” When you consider the top pains of lack of organization efficiency and manual, time-consuming reporting—coupled with the fact that most respondents use QuickBooks, it’s safe to assume that entry-level accounting software like QuickBooks cannot rise to meet the needs of current nonprofit challenges.

While entry-level accounting software like QuickBooks can be a good fit for small organizations with a simplistic structure, it wasn’t built for the needs of a complex nonprofit, especially in a challenging economic climate. Some of the impacts of economic instability on nonprofits including increased competition for funding, volatility in funding streams, and operational challenges can be exacerbated by the use of a solution like QuickBooks. However, these pains can be removed by leveraging a modern, cloud accounting and financial management solution like Sage Intacct:

• Competition for funding: Sage Intacct can help nonprofits differentiate themselves when funding competition is fierce. By utilizing compliance reporting in Sage Intacct, nonprofits can demonstrate that they are a responsible steward of donor dollars. Couple that with the ability to track and measure outcome metrics can make a nonprofit very attractive when under consideration for funding.
  
  
• Volatility in funding streams: Nonprofits often experience fluctuations in funding streams due to economic uncertainties. Government grants, corporate giving, and individual donations may become more unpredictable, impacting  long-term planning and program sustainability. Sage Intacct is, at its core, a fund accounting solution, with the ability to easily track multiple funding sources and establish a clear and complete audit trail from transaction to report to reconciliation. This not only frees up valuable time for finance staff but makes audits fast and efficient.
  
  
• Operational challenges: Nonprofits using QuickBooks as their financial foundation are often forced to build cumbersome workarounds to complete complex processes like revenue recognition and multi-entity consolidation, leaving users overly reliant on spreadsheets and manual data entry. Sage Intacct has built-in automation and workflows to increase your efficiency and productivity by eliminating redundant data entry, routing and tracking digital approval signoffs on transactions, and automating fund, revenue, and billing processes.

Tracking outcome metrics is a critical component of telling your story and attracting donors 

In a world where both the demand for services and competition for funding are high, nonprofits have to employ various strategies to stand out and secure financial support. Outcome metrics are a powerful tool for demonstrating accountability and transparency. They can measure financial and statistical data that reflect an organization’s, program’s, or initiative’s efficacy. Many nonprofits obtain their best results by measuring across multiple dimensions for blended scorecards that encompass activities, capacities, financial results, and other metrics.

At Sage Intacct, we automatically tag and track data by key dimensions which gives nonprofits the instant visibility and insights they need to be proactive. Sage Intacct also provides access to statistical data to enable nonprofits to automatically calculate key metrics such as financial (revenue), statistical (membership), or a combination (donations per attendee).

The Sage Intacct open API allows organizations to integrate their financial data with the data from any or all of their other business systems. For instance, by viewing combined CRM and financial data, nonprofits gain greater visibility into metrics like average number of gifts per active donor, fundraising to expense ratio, cost per dollar contributed, and more.

The ability to track outcome metrics is at the core of a lot of strategies to stand out and attract donors. Here is how leveraging outcome metrics can help attract funds:

• Strengthen relationships with existing donors: Cultivating relationships with current donors is essential. If you can leverage outcome metrics in your communication by demonstrating the impact of their contributions, you can enhance donor loyalty and drive consistent support.
  
  
• Focus on impactful storytelling: Compelling storytelling is key to communicating a nonprofit’s impact. By showcasing the tangible outcomes of programs, highlighting success stories, and emphasizing the mission with data, nonprofits can draw an emotional connection with potential funders.
  
  
• Develop a strong online presence: Outcome metrics can help bolster your online presence and are a key component to a well-designed website, active social media channel, and compelling digital content that can increase a nonprofit’s visibility.

The need to budget and plan for the future has never been greater

Our respondents cited “budgeting and planning” as a top five internal challenge this year. In addition, we’ve seen a steady increase over the years in the number of respondents whose organizations leverage budgeting and planning software.

In uncertain economic times, nonprofits may experience fluctuations in funding streams. Government grants, corporate giving, and individual donations can be more unpredictable, impacting long-term planning and program sustainability. For small nonprofits, it’s easy to use spreadsheets to manage budgets, but when an organization grows in complexity—or needs to quickly shift direction due to world events—Excel becomes a problem that only a true budgeting and planning solution can solve. These are some of the ways a modern budgeting and planning solution like Sage Intacct Planning can help nonprofits:

• Financial stability: Budgeting enables nonprofits to allocate resources strategically, ensuring there is a clear plan for income and expenses. Sage Intacct Planning can streamline collecting data, create models, build plans and budgets, and define KPIs continuously to make the process seamless.
  
  
• Risk management: Planning for the future involves identifying potential risks and developing strategies to mitigate them. Automating planning using Sage Intacct Planning allows nonprofits to be more agile in response to change. Change can create risk, but also opportunity. Whether positive or negative, those who can react quickly to change are more likely to succeed.
  
  
• Real-time collaboration: Effective planning cannot be done in a silo. For maximum efficacy, everyone at the nonprofit from development to programs to the board, needs to work together and be on the same page. Sage Intacct Planning allows centralized input from all budget owners, making financial plans more realistic and achievable.

Conclusion

The 2024 Nonprofit Technology Trends Report aims to provide a comprehensive view of the current landscape of technology use within the nonprofit sector, based on insights from nonprofit finance leaders across North America.

The responses from nonprofit finance leaders highlight positive trends in revenue recovery since the peak of the pandemic. Our findings emphasize the critical role of nonprofit finance leaders in leading their organizations through change with transparency, accountability, and strategy.

As nonprofits face a complex landscape, the ability to track outcome metrics, strengthen financial planning, and enhance operational efficiency are crucial for long-term sustainability and impact. With critical challenges such as economic uncertainty, inflation, and competition for funding at the forefront of the nonprofit sector, the need to leverage modern technology solutions is greater than ever.

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