Tag Archive for Accounting Software

Navigating The Crowded Non-Profit Sector

Nonprofit donors

How organizations can set themselves apart to secure—and retain—donors

By Shannon Crowley, CPA, MSA
Accounting Manager

Despite the Great Recession and the long process of economic recovery of the 2000s, the non-profit sector has become one of the country’s fastest-growing industries. According to the National Center for Charitable Statistics’ most recent research, the United States is home to more than 1.5 million registered non-profit organizations—marking a nearly 20 percent increase over the last 10 years, a time frame in which many businesses in the for-profit sector have struggled.

This rapid growth is certainly a sign of success, and—as non-profits employ nearly 11 million American workers and contribute roughly $887 billion to the national economy—it is difficult for anyone to argue against the economic value of a thriving non-profit sector.

However, the unprecedented rate at which new organizations are being created is also creating a challenge. The non-profit sector is more crowded than ever before, making it very difficult for organizations to secure—and retain—their donor bases.

On a local level, there are 33,000 non-profit organizations registered in Massachusetts—each competing with one another for precious dollars from a limited pool of individual donors, corporate foundations and other fundraising sources. In a recent cover story in The Boston Globe, many industry experts argue the field of non-profit organizations in Massachusetts is simply too large to sustain.

However, the organizations themselves, and the tens of thousands of Massachusetts residents employed by non-profits, are doing everything they can to prove those experts are wrong.

And that starts with donor retention.

The Association of Fundraising Professionals reports that, on average, donor retention rates across the non-profit sector are around 43%, meaning less than half of an organization’s 2016 donor base will contribute. In order to grow in a competitive non-profit environment, organizations have to find a way to land recurring donors. To do this, non-profits are employing several strategies. For the purposes of this article, we’ll focus on three:

Differentiating themselves from other, potentially similar organizations

Many potential donors or grant-awarding foundations would love to support every deserving cause that asks for and needs their help. Realistically, though, donors need to choose between hundreds, if not thousands, of similarly operating organizations to which they can lend their financial support. Non-profits, especially non-profits working to support similar demographics, are under enormous pressure to set themselves apart to attract new sources of funding. It’s never been more important for a non-profit to have a very clear, very specific mission.

Investing in “fundraising infrastructure”

Fundraising success is entirely beholden to the amount of time and resources organizations are willing to invest. In order to succeed in today’s hyper-competitive non-profit sector, organizations must invest in fundraising professionals, such as high-ranking development officers, and fundraising “infrastructure,” such as top-notch technology and donor databases.

The clear, specific vision makes an organization attractive to donors. Development professionals and in-depth donor databases help organizations find them.

Increase efficiency by streamlining their accounting functions

Back-office financial work is crucial to the long-term success of the organization. That said, it’s also very time-consuming. As many organizations are investing significantly more time to their fundraising operations, some non-profit leaders are finding ways to take complex financial paperwork off their desk so they can focus on the organization’s core competencies. This may entail creating new jobs for a full-time accounting team, or hiring a third-party financial organization to take on those responsibilities.

How BlumShapiro Can Help

BlumShapiro offers the accounting, tax and business consulting expertise non-profits need today. We are one of the largest non-profit accounting service providers in New England, our blend of accounting expertise and knowledge of non-profit organizations means we can offer you tremendous added value. We can assist you in complying with state and federal grant requirements, charitable giving rules, capital campaigns, endowment fund responsibilities and other specialized needs. Learn more >>

View Shannon’s Bio Here >>

Functional Expense Reporting for New England Non-Profits

Functional Expense Reporting provides donors, funders and the general public with meaningful information about the types of programs and activities carried out by an organization.

The importance placed on functional expense classification makes this an important audit issue.

To help your organization strengthen its reporting, we invite you to watch this recorded webinar, Functional Expense Reporting for New England Non-profits, presented by Michelle Hatch, CPA, Partner, Non-Profit Services Group, BlumShapiro. It’s a behind-the-scenes look at Functional Expense Reporting – what it takes to do it well and how it helps position your organization for ongoing success.

The webinar covers topics such as:

  • How do I meet Functional Expense Reporting requirements?
  • How do I meet my internal reporting, funder, board and FER? How do they co-exist?
  • How can I best accomplish FER in accounting systems without using Excel spreadsheets?
  • What are some of the desired methodologies for allocating key costs?

Click here to view: Functional Expense Reporting for New England Nonprofits

Ask Not What You Can Do for Your Software; But What Your Software Can Do for YOU

Nonprofit Accounting SoftwareYour key software, whether accounting, donor management or payroll, should be constantly evolving. Because of limited time and resources, it is easy to lose track of what your software’s capabilities are and should be. A few quick items to review on a regular basis:

Version:
What is the current version? Which version are you on? The further behind you are, the more costly upgrades will become in regards to both money and time.  If you do not have the immediate resources to upgrade, it is still important to confirm the current hardware and software requirements. This will ensure you are budgeting for what could otherwise be hidden costs for new required hardware and related software.

Current Features:
Occasionally, updates are performed to address a specific issue such as fixing a software bug or updates for W-2/1099 processing. Chances are these updates include other enhancements that you should know about! Even if you don’t plan on installing the latest release, make sure to ask your vendor for a list of enhancements on a regular basis.

Also, do not forget to have someone attend training on a regular basis. At worst, current knowledge will be reinforced. More likely, attendees will learn additional tips and tricks.

You can do that?
From the early 1900s to the 1960s, the average kitchen changed in dramatic fashion – candles and windows to light bulbs; ice boxes to refrigerators; your kids speaking with you to watching TV. Report generation has evolved dramatically as well – 15 years ago, you would have to print 25 reports and distribute to each manager via interoffice mail; if you were being “efficient,” you might have scanned each of the reports and created 25 separate emails. Now you can press a button and everyone gets their information immediately. Even better, they have their own direct access from wherever they are.

This is one example, but it’s important to know not just what your software can do, but what it should be able to do. Make sure to ask colleagues, new employees or simply talk to those salespeople who call you to make sure you actually know what is available.

Look for a follow-up post on how to find the time to review items outlined above.

As a manager in our Consulting Group, Matt provides implementation, conversion assistance, training and ongoing support for the firm’s clients. His industry experience includes non-profit organizations such as independent schools, health and human service organizations, arts and cultural organizations and municipalities.