Funding through state and federal grants is down by some 15 percent over the past three years and is not expected to rebound any more quickly than individual and corporate donations, while at the same time local governments have increased their taxes and fees for non-profits, further squeezing operating capital. And to make matters worse, the number of volunteers has dropped by about one percent in the past year, forcing some non-profits to cover their manpower needs by adding staff.
Executives of not-for-profit organizations have adopted a number of new strategies to deal with the recession.
Some have shifted resources to areas of specific need tied to the economy. Authors Rob Reich and Christopher Wimer of Stanford University, in their book The Great Recession, note that grant applications are specifically being tailored to support of the unemployed, or jobs assistance.
Others are focusing on better communications with donors and seeking out new constituencies. For instance, The Jewish Communal Fund, a New York group that allows people to donate to various causes through investment funds, began its outreach to adults 35 and under, recruiting younger adults onto its board and lowered minimum contributions to avoid the problems of an aging membership that are plaguing other non-profits.
But an even greater number of organizations are adopting or expanding their use of technology in order to enhance communications, improve transparency in their operations and provide their management and boards with more effective tools.
The specific types of technology being adopted or expanded differ with each organization, but generally fall into three categories:
- Changes to the technology base. Some non-profits are bringing their payroll operations in-house, investing in payroll software in order to retain administrative staff by giving them responsibilities that were formerly contracted out. Others are reducing costs by moving their operations to The Cloud, adopting SaaS applications rather than applications on physical media, and shifting their operations to hosted services accessible via VPN. Finally, there is a growing use of office automation systems to reduce paper storage and retrieval systems. And a significant number of non-profits have made greater use of social media or redesigned their web sites to appeal to a broader, younger donor base.
"Cloud-based financial systems significantly reduce costs while providing anytime, anywhere access to the information nonprofits need to handle strict statutory requirements, account for and report on sources and uses of funds, and manage the expectations of major donors and their board," said Robert Reid, CEO of Intacct. "We've passed the tipping point, as more and more nonprofit organizations turn to cloud-based applications. These organizations have grown tired of the headaches associated with the need to acquire, house, and maintain redundant equipment to ensure the security, reliability, and scalability of traditional on-premises financial applications."
"Almost as significant, is the trend toward single-platform solutions," says Serenic Software CEO and President Randy Keith. "Organizations are moving away from deploying disparate systems to address all primary financial and business management operations and looking for one platform that covers all their needs out of the box, including grant management, fund accounting, encumbrances, commitments and indirect cost management."
"We're seeing increased adoption of mobile financial management tools across small businesses, and nonprofits are no exception," says Intuit Product Manager Alex Blakey. "We anticipate accelerated adoption of mobile accounting in 2012. As nonprofits grow increasingly familiar with mobile business apps, we'll see them expect the ability to expand and customize the capabilities of their financial management tools with plug-and-play apps that work together effortlessly."
"On a related note, we'll also see nonprofits expect their data to import and sync between apps in a way that enhances productivity and ease of use," he adds.
- Expansion of accounting technologies. More stringent reporting requirements and audit standards are forcing nonprofits to look closely at their procedures, and to implement better tools for financial management. Similarly, stronger efforts are underway to interconnect donor and member databases with the accounting system, to make better use of tools for Customer Relations Management (CRM). Non-profit accounting systems are being upgraded to incorporate a broader array of tools for accountability, for budgeting, for fixed asset management and grant management, including systems for automated reimbursement. In addition, an increasingly more diverse global market makes it important for a fund accounting system to process transactions in any number of currencies.
"Transparency has become a critical trend for fund accounting," says said David Best, President and CEO of Agilon LLC. "Governments at every level are demanding greater transparency and greater accountability for the monies they invest in NFPs. This means more stringent reporting requirements, particularly in accounting and in measuring the effective use of funds. At the same time, private and institutional donors have increasing levels of information at their fingertips to use in making informed decisions. The better job a non-profit can do in transparency, the more successful they will be in the years ahead."
- Enhanced use of management tools. The demand for greater accountability, combined with a recession that gives management fewer resources with which to accomplish their missions, has brought the use of management tools to the forefront. These include an increasing use of management dashboards, which provide an immediate snapshot of the financial health of the organization. And the use of tools to measure success, including Corporate Performance Measurement (CPM) systems.
"Now more than ever, nonprofit boards need to be well informed of the organization's financial health, and funders want to know exactly how their money is being used," stated George Marcolini, CEO of FUND E-Z Development Corp. "A software system's ability to quickly customize financial reports tailored to board and constituent requirements is key to keeping everyone informed of current financial activity."
"Transparency and accountability are becoming more critical to the success of non-profits," said Krista Endsley, senior vice president and general manager of Nonprofit Solutions at Sage, which has just won its fifth consecutive Campbell Award for excellence in serving non-profits. "But, equally important is the integration of management tools to drive success. The days when a non-profit can be managed with an accounting package and a database program are giving way to a new generation of management solutions that have to integrate collaboration tools, member and donor relationship management systems, strong budgeting and asset management capabilities, and performance management tools. Non-profits in the future will have to keep pace with the same management and communication tools as any other vital and effective organization."
AccuFund For Non-Profits
400 Hillside Ave
Needham, MA 02494
(781) 453-0460 Fax
Pricing: AccuFund Accounting Suite Standard Single-user: $2,995; three users: $6,495; add $895 for each additional user.
Agilon Business Financials
3801 Beverly Road SW
Cedar Rapids, IA 52409-9299
(319) 739-0759 Fax
Pricing: Starts at $27,000 for 1 to 4 users; starts at $42,000 for 5 to 10 users
130 Iowa Lane, # 102
Cary, NC 27511
Fax 919 460-4983
Pricing: SaaS-based application with pricing is dependent upon the number of modules licensed, and the number of users. FastFund Accounting Starter begins at $35 a month.
The Financial Edge
2000 Daniel Island Drive
Charleston, SC 29407
Pricing: Subscription pricing begins at $299 per month, licensed version starts at $2,995 for a single user.
Cougar Mountain Software
CMS Professional 2012 FUND/Denali Fund Accounting
7180 Potomac Drive
Boise, ID 83704
(800) 375-4539 fax
Picing: CMS Professional 2012 FUND Suite single user $2,570; multi-user $6,411. DENALI FUND+Accounting starts at $595.
CYMA Systems, Inc.
CYMAIV Not-For-Profit Edition
2330 W. University Drive, #4
Tempe, Arizona 85281
(480) 303-2969 Fax
Pricing: Starts at $1060, but is modular in nature. Modules are generally $645 per.
Executive Data Systems
Fund Accounting Software
1640 Powers Ferry Rd.
Bldg. 14, Suite 300
Marietta, Georgia 30067
(770) 955-1975 Fax
Pricing: NonProfit Starter Kit, single-user $500; unlimited $800. Fund Accounting Software Series, single user $1,000; unlimited $1,500. All software sold as modules.
FUND E-Z Development Corp.
FUND E-Z Nonprofit Accounting
106 Corporate Park Drive
White Plains, NY 10604
(914) 696-0948 Fax
Pricing: FUND E-Z Nonprofit Accounting $1995, (Pro add-on) $1,495; FUND E-Z Fund Raising $995
Grants Management Systems
GMS Non-Profit Accounting
10559 Metropolitan Avenue
Kensington, MD 20895
(301) 933-3502 Fax
Pricing: One to two users (Microsoft Access version) $5,400; three to four users $7,500; five or more users $8,625. For SQL server version, One to two users $6,900, three to four users $9,000, for five or
more users $10,125. License costs additional $35 per month per user.
150 Almaden Boulevard, Suite 1500
San Jose, CA 95113
(408) 878-0910 Fax
Pricing: Subscription-based pricing for the Intacct financial management system starts at $400/mo.
Premier Non-Profit Edition
2632 Marine Way
Mountain View, CA 94043
Pricing: From $399.95 for single user; $999.95 for 3-user edition
Open Systems Inc.
TRAVERSE for Not-for-Profit
4301 Dean Lakes Blvd.
Shakopee, MN 55379
(952) 496-2495 Fax
Pricing: Starts at $1,500 per application and $500 for each additional user.
Sage North America
Sage Fund Accounting
12301 Research Blvd.
Building IV, Suite 350
Austin, TX 78759
Pricing: Single user starts at $2,995
141 Union Blvd.
(303) 980-6069 Fax
Pricing: Pricing starts at $3,500 per user license for the Business Essentials version of Serenic Navigator.
Pricing starts at $6,500 per user license for the Advanced Management version of Serenic Navigator.
Related modules and add-on products are priced separately. Serenic Navigator Online is $195 per user/per month.