Now is the Right Time for a Nonprofit Digital Transformation
Now is the Right Time for a Nonprofit Digital Transformation
by Brenda Kahler
September 23, 2020

Updated May 05, 2022

The trend toward digital transformation — using technology to maximize mission effectiveness — has been slowly spreading to nonprofits over the past few years. Now, the shift to remote work following the COVID-19 pandemic has forced nonprofit leaders to put it at the top of their discussion list.

At the height of the pandemic, nonprofits were forced to pivot to digital solutions — most significantly, remote work — as part of a temporary safety measure. However, what was once meant to be a short-term foray into the digital workforce is now a critical component of an organization’s future success. Remote work is here to stay, and nonprofits must adjust their technology stack accordingly to avoid falling behind in a digital world.

To keep up with an increasingly digital workforce, nonprofits must strategize how they can update or use new technology such as cloud financial systems, donor relationship management software and financial planning and analysis systems to streamline processes such as contributions, grant management, program tracking and budget re-forecasting.

So, think about what technology you need to enable your workforce and continue serving your communities for the long term. Also, examine the impact it will have on your processes and internal controls.

For example, where before you may have had to print checks and get them signed by two individuals, or obtain paper receipts to support an expense report, consider enabling ACH at your bank and/or implementing an electronic accounts payable system with online approvals. Then, integrate your systems so data flows seamlessly between them without the need for manual intervention by your team. The last thing you want is moving to the cloud to result in you having to enter the same information in multiple places (i.e., the bank, expense report, financial system, etc.)

Integration can also improve the speed at which you can report on and react to changes your organization is facing. In volatile and uncertain times, having access to real-time reporting is critical.

Other Benefits of Digital Transformation

There are many other reasons why now is the time to transform your nonprofit's technology stack, including:

Lower cost of ownership. When you shift to cloud-based technology, you no longer have to maintain your own servers and backups or do costly annual upgrades to software packages. Plus, with so many ongoing global supply chain issues spurred on by COVID-19, it may be difficult now to quickly obtain the hardware you need to implement or replace on-premises systems.

Remote access to documentation. With document storage solutions and the ability to attach documents to many transactions or workflows within cloud-based software, it is easier than ever to pull this information for online approvals, grant reporting, your audit or other compliance requirements.

Improved security. Cloud-based solutions are generally very secure and actually limit security issues that can occur from human error. Always ask for a copy of the vendor's SOC 2 report and backup policies when reviewing potential vendors (and annually after that) to ensure that they are sufficient for your organization and that you have implemented the user-level controls to ensure their controls can operate effectively.

Stakeholders See the Need

With the accelerating transition to a digital landscape, many nonprofits are finding that getting board member buy-in for digital transformation is easier than ever before. Board members recognize that remote work is now necessary to retain and attract staff, and they see the long-term value of digital transformation in increasing mission impact through streamlining and automating manual processes.

Donors get it, too. Capacity building grants used to be very difficult to find. However, throughout the pandemic we saw foundations and other grantors removing the restrictions on their grants — they understood that the environment in which nonprofits were operating changed significantly, and additional investments would be needed as everyone shifted to remote work. Increasingly we are also seeing more funders that are providing grants specifically for nonprofits to complete their digital transformation projects and move things to the cloud.

There is no going back, there is only moving forward. Digital transformation is here to stay, and transforming your organization now is a crucial way to help future-proof your nonprofit. Organizations that invest today will see a return on their investment, and those that don't run the risk of falling behind their peers.

Want to learn more? Start building your digital transformation roadmap today. Ready to get started? Contact us to learn more about how we can help you with your nonprofit digital transformation journey.

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