A nonprofit organization (NPO) can improve its capabilities through the Internet and advanced system capabilities. With the click of a button, raising awareness for social issues has never been easier and more attainable. The online world also provides nonprofits a way to tap larger donor pools, as in crowdfunding projects. But NPOs face their unique challenges.
The Business Side of a Nonprofit
Your charitable institution, despite its nature, still must operate similarly as for-profit businesses. Yes, you don’t declare profit and you use revenue serving the public interest. But you still should manage donor records as well as the collection of pledges. You also must perform audits, create reports and publish them to establish operational transparency.
This is where an enterprise resource planning (ERP) software becomes useful for your nonprofit organization. An ERP software improves a nonprofit’s operation by a large degree.
The Benefits of Employing ERP
As an NPO, you may not be as likely to invest in IT capabilities as much as commercial enterprises. And this is precisely why an ERP makes sense for your charitable organization. ERP software has many modern-day options. It can run on cloud instead of on-premise. This eliminates the need to purchase hardware or employ a heft IT staff.
The company hosting the software handles the back-end duties, meaning they do the heavy computing and provide support. It leaves you to only run a program where a laptop is often sufficient. This frees up your resources that would be otherwise tied to technological investments.
With more time to put into your social efforts, you’ll be able to do more outreach and widen your exposure. Today’s ERP systems allow you to create and launch automated customer centric campaigns helping to gain interest and support. You’ll spend more time on your mission, your advocacy and less time on the business side of your organization, e.g., accounting, donor retention and records management.
A New Way to Appeal to Donors
National Center for Charitable Statistics (NCCS) reveals there are over 1.5 million registered nonprofit organizations in the country. Consider the kind of competition your NPO is up against with this figure, and you’ll quickly realize just how challenging and competitive it is to obtain funding sources.
The motivation for giving money to NPOs, whether it’s government grants or private donors, is no longer out of “doing good.” Most donors now want a value proposition; they want to know that their donations truly serve a larger purpose. They want measurable transparent results.
With better data management and reporting capabilities from ERP, you can provide this type of critical information to potential donors. You can offer up statistics accurately showing your NPO’s impact on a community. As mentioned previously, ERP also contains marketing tools, allowing you to increase public awareness for your organization and mission. The larger the audience, the bigger the donor pool, the more resources you can allocate to your movement.
Affordability of ERP Systems to Nonprofits
As a cloud-based program, ERPs are typically subscription-based like Amazon Web Services or Netflix. As such, you avoid paying a lump sum to license the software. However, monthly payments become a part of the organization’s expense structure. When done right, the expenditure on ERP should over time be offset by increased donations, while allowing for growth.
Why Nonprofits may be Reluctant to Invest in ERP Systems
Many nonprofit organizations may only have a handful of employees or volunteers on staff. Other organizations simply lack the funding to upgrade their internal processes with new technology. The bottom line is that many NPOs are not quick to invest in ERP systems due to inadequate resources.
The prevailing notion is a tight budget leaves no room for an automated updated new system. Unfortunately, without a new system, NPOs may fail to maximize opportunities. Without ERP, creating reports isn’t as easy, donor management is difficult and quality/inaccuracy issues may plague the organization. It’s bad for transparency and accounting, which are two vital aspects of a well-run NPO.
The right ERP solution can help your nonprofit organization run efficiently, appeal to more donors, and in general, do more good.
When deciding to embark on an ERP initiative, an independent consultant such as Panorama Consulting offers valuable insight on solutions that best fit your organization. Get in touch, and let us provide guidance on a nonprofit ERP system that can work for you and your budget.