Trends You Need to Know About In Accounting in Nonprofits
For many nonprofit development officers, the EOY push to bring in more donations is always top of mind right now. But, while many non-profit executives should and are focused on bringing in a steady from of donations, an equal amount of time making sure that finances and accounting are in order is vital for all sizes of non-profit organizations too right now. In this article, I share 5 key takeaways I derived from a recent report on accounting trends for nonprofits which I believe you will find interesting and worth a read.
Accounting for Nonprofits
As much as we all need to “attract” new members and donors, it’s equally the responsibility of nonprofit executives to be good stewards too with the donations they receive. Without question, your top donors want to ensure their funds are well-used and properly managed. Abila, a software provider focused on non-profits, recently released results from their survey, Finance and Accounting in Nonprofits, which I believe does a good job of shedding some light on information about this topic.
Just to put it into perspective and the frame the study, the findings came from professionals which work at a broad range of organizations that take in between $1 million and $50 million in annual revenue. The sample of data came from 350 finance and accounting staffers at various nonprofits.
Below are my most notable thoughts on the trends in this report.
The Generation Gap in Accounting Practices
One of the study’s focal points was on how financial staffers from different generations viewed their responsibilities. Interestingly, there was not a lot of difference in responses between Millennials, Gen Xers and Baby Boomers. While the different generations may be in different career stages, most of them see similar challenges in their day-to-day work.
When I visit with executives seeking new software tools and technology, I do inquire during my assessments about the demographics of the organization’s constituents. And, suffice it to say there are a diverse set of age ranges with regards to staff in most nonprofits. In many instances, the Millennials seem to have a different opinion than Baby Boomers on what’s important and their expectations on how best to address it with technology. Therefore, these finding for accounting staffers was actually encouraging. Everyone seems to be on the same page!
Doing More with Less
Non-profits as a whole are moving to have fewer finance staffers, so those that are in these positions have a more varied range of duties and more impact on day-to-day operations. Finance and accounting employees are spending their time running reports and taking care of immediate tasks rather than focusing on strategy and helping to move their organizations forward.
This is not much of a surprise to me. And, coincides with most everyone’s perceptions reading this article, but it made me contemplate how technology will become increasingly important in order to move forward for even the smallest of organizations.
More Integrated Departments
It’s great to have more input into other departments, so that everyone is more aware, but finance staffers are often asked to take on operations, human resources and other tasks that may fit outside the accounting umbrella. This also leads to one of the biggest challenges that the study uncovered: Daily interruptions from other departments. The exception seemed to be with fundraising, as finance professionals reported the least interaction with their cohorts in that department.
After reviewing this bit of information, I could not avoid thinking about the ongoing discussions in the “for profit” world about alignment among various departments. For years, many CRM (Customer Relationship Management Software) providers have touted the need for the right hand knowing what the left hand was doing. And, many cited integration with accounting as a key area of disconnect. These findings support the importance of having integrated data from all departments is as important in the nonprofit world too.
Moving to the Cloud Accounting Software
Software solutions are more frequently cloud-based, which can be more efficient but also presents challenges in adopting new practices and ensuring security of information. Finance and accounting professionals often have responsibilities in implementing the financial side of this cloud-based software and keeping data secure.
Once again, this isn’t a nonprofit trend rather a movement by all organizations across the board and in all industries. More an more organizations are opting to have their data and their software managed off site and choosing software which is subscription based (rented) rather than owned.
Growing the Organization
Identifying new sources of funding and staying sustainable are key challenges for non-profit finance staffers. Nearly one-third of respondents said they expected growth to stay flat for at least the next three years. Abila’s report cited this understanding of how professional finance and accounting staffers work as being key toward ensuring that funds are dispersed according to the organization’s needs and donors’ wishes. Understanding the challenges they face can show trends both in finance and in the overall management of non-profit organizations which I felt was interesting.
Without a doubt, it’s important to be transparent and good stewards with the donations and contributions which come into a nonprofit. And, it’s apparent that the entire team can benefit from an integrated process & solution which may help everyone keep better tabs on their mutual efforts.
In short, I enjoyed this report and hope this frames the topic with some clarity. What do you think?
For your copy of the full report, please go here.
And, if you would like help identifying ways to increase the productivity of your non-profit organization with technology, contact us.
Until next time, keep SmartThoughts in mind.