HR Daily Advisor | Dec 03, 2019

By Maggie Deptuck, Global SVP at Replicon

Nonprofit organizations (NPOs) have a lot on their plates. Aside from operating with limited funds, maintaining public confidence, and striving to further a cause, they’re now expected to operate with the same finesse as a multimillion-dollar enterprise. But old habits die hard, and despite the growing need for change, NPOs are historically reluctant to adopt the same practices, processes, and technologies that more lucrative businesses tend to employ.

Luckily, the market has evolved with the times, and that affects NPOs for the better. Although for-profit businesses may have more resources to invest in people and systems, running a business well doesn’t have to require a costly solution.

Today, NPOs can optimize their existing resources to run like a business and stay dedicated to their cause. Investing in an organizational infrastructure is an investment in an NPO’s future—ultimately paying for itself in saved costs and increased efficiencies—that provides the necessary control over some of the top components any organization needs to run smoothly, including:

Understanding Grant Fund Burndown
First and foremost: Where does the money go? Perhaps the top concern among donors and funders is that NPOs are subject to stringent accountability for proof on exactly how their donations are being used, often translating to how employees are allocating their time. The smartest way for NPOs to determine that is by implementing a reliable system to track time.

Tracking employee time substantially simplifies fund accounting and grant reporting, illuminating not only the time taken but also what work was done. This liberates your team from constantly analyzing cost, delegating tasks, and more, thus regaining valuable time for more impactful work. Ultimately, it strengthens donor confidence, encourages further grants, and promotes an overall sense of fiscal awareness.

Staff and Volunteer Productivity
Board meetings, fundraising activities, campaign planning, and more—without its dedicated staff or volunteers running the show, an NPO is a nonstarter. Does your team have enough people to fundraise, train new help, and run the office? Should you outsource for projects outside your organization’s wheelhouse? Are your team members spending too much time on administrative tasks outside their primary job description?

All these questions and more can be answered with the right solution. There’s no limit to the valuable data that are revealed in reports generated from using tools normally leveraged by for-profit businesses. Monitoring volunteer hours, activities, and expenses is just as helpful; this information can allow you to offer rewards or incentives to show workers they’re appreciated and potentially increase retention as a result.

Optimizing efficiency in an NPO can do so much more than just inform—it can simplify program management, help improve processes, assist in hiring, and allow NPOs to focus their time on what matters most: the mission.

Maintaining Compliance
In addition to meeting the same federal and state labor requirements as any for-profit, NPOs must also maintain the specific policies set in place for 501(c)(3) organizations. Using funds appropriately, staying audit-ready, and keeping in accordance with location-specific labor rules ensure that an NPO can protect both its reputation and its status.

Having an accurate and up-to-date record of employee activities, for example, makes it much easier to skip making rough estimates and ensure compliance to pass an audit quickly. By investing in resources, processes, and solutions with these strict regulations built in, NPOs can always stay prepared for whatever comes their way.

Securing Future Grants
NPOs are often guilty of underestimating the time a project will take in an effort to prove how efficiently they can deliver on their commitments to donors. After investing in a reliable system designed to streamline processes like project management and timekeeping, the actual hours and costs required to complete these client projects quickly become clear.

This results in better resource allocation and budget estimation moving forward, demonstrating competency and building trust with current and potential funders. Ultimately, keeping these data on hand creates a historical record for NPOs to forecast a multitude of different situations and improve accuracy with every initiative.

An Investment Supporting the Cause
Building NPO capacity is building confidence—public confidence; internal confidence; and, of course, donor confidence. By equipping themselves with solid systems and infrastructure, NPOs can use every resource available to thrive and make an impact on the mission that motivates them—and truly make a difference.

Original Source: HR Daily Advisor
Author: Maggie Deptuck, Global SVP at Replicon

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