6 principles to follow when selecting software for your Not-for-Profit

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BDO

Where to Begin…

6 principles to follow when selecting software for your Not-for-Profit

I have recently had a bird’s eye view of what a small charity goes through when they start to outgrow the systems they have been using from the first donation.

Inevitably, we all start with spreadsheets. They seem savvy enough. I can track information fairly easily, I can look things up, search, even have it total columns. If I get really crazy, I can build a couple of formulas. But when is that not enough? The foundation board members start to ask you for information. You need the information faster so you jump up to an entry level accounting package. It doesn’t have any bells and whistles but hey, it’s cheap, maybe even free and I can start to operate like a real business. I can keep track of invoices, pay them, record donation revenues, grants or other funds coming in the door. Board members are amazed that I can actually produce a set of financial statements representing the activity in the last year.

But wait?

How much did Mr. Smith donate last year? Over the last 3 years? That is going to take some digging.   You want me to send a newsletter to all our donors? Do we have all their names and addresses in one place? Well, some of them wanted receipts so we must have at least some of that information right? We want to do what? A walk? An Event? How will we manage ticket sales, registration, vendors? How will we evaluate the event to see if it was worthwhile?

Bolt on another system right? Free is good! Google docs, Dropbox, create some paper invitations, log them on a shared google spreadsheet for the team to see and update. We are rolling now. Look at us sharing information. But how the heck do we manage balancing what is happening with the event to the financial records? Ugh! This will take hours of cross balancing and calculating to figure out the receipting.   At least receipting I can use a nice little template rather than typing each one!

Oh boy, somehow we went from 25 people attending a walk to 500 people attending an event and donors from across the country! Yikes, I could spend all day entering data and hope I get it right. After all, I am accountable to the CRA.

So how would I go about finding a piece of software that does it all?? Do I want the same software to do it all? Seems odd one product could be an expert at all the aspects of running a not-for-profit (NFP) organization. I need a place to keep all my donors, a way to communicate with them, event management, volunteer management, donations, receipting and financial accounting. Does it make sense to have different systems? How the heck would they talk to each other?

There are a few basic principles that you should follow when selecting software for your NFP. In a series of upcoming blogs, I will dig deeper into each of the following principles:

Know what you need

    • Take the time to evaluate what you need from your software
    • Try to map out what activities you do
      • How often do you engage in the activity
        • Daily
        • Weekly
        • Monthly
        • Yearly
      • How long do they take to complete
      • What information is requested that is difficult to pull together

Evaluate your resources

    • Do you have resources that are skilled with specific types of systems
      • Would they be an asset to the implementation of new systems?
      • Will they benefit from new systems
    • What is the availability of your resources
      • Do they have time to help setup new systems
      • When up and running, with the new systems save them time

Evaluate your budget

    • Every charity has minimal funds to spend. Good systems are sometimes viewed as luxury items.
      • What is the cost of doing it the hard way?
        • Resources overburdened?
        • Information available to make informed decisions?
      • What is the cost of missing opportunities?
        • Not reaching your donors before the spend elsewhere
        • Not driving attendance to events
        • Not communicating with volunteer

Find a realistic budget

      • Rome was not built in a day
      • Your solutions should be an evolution
        • You don’t have to solve all the pain in the first release

Consider the future

    • Budget might lead you to a less expensive solution but will it sustain over time?
    • Do you want to re-implement again in two years?
    • Will the software vendor be here in two years?

Look at more than one system

    • Read closely for costs associated with transactions
      • The bigger you grow, the more money you owe
    • Look at integrated solutions to get best of bread
      • Todays’ systems should allow for data access
      • Consider common platforms (eg. SQL)
      • All in one products usually mean you will settle on one side to get what you need on the other
      • Systems that will integrate to each other offer best of both worlds so your operations do not have to settle for finance and finance does not have to settle for operational functionality

There are many things to consider when choosing a solution. Don’t let cost be your only motivator. You are better to suffer the pain a little longer until you can afford the right system than to purchase a low cost solution that will end up providing different pain and inevitably not meet your needs in the near future.   Look for my upcoming blog where I’ll address the first principal, “know what you need.”

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