Armanino Blog

Now is the Right Time for a Nonprofit Digital Transformation

by Brenda Kahler
September 23, 2020

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

Nonprofits are using this time to strategize on 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.

Since working from home, organizations have discovered that already cumbersome processes such as generating month-end reports now require an even more monumental effort from their accounting team. With people spread out over multiple locations, and servers back at the office, what once was a topic for future conversation has become an urgent request. For some nonprofits that are still unable to return to their normal operations, one silver lining of the pandemic is the gift of time to reflect on identified weaknesses and shore up inefficiencies.

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. Then, integrate your systems so data flows seamlessly between them without need for manual intervention by your team. The last thing you want is for 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 upgrades to software packages. Plus, with so many ongoing supply chain issues due to COVID-19, it may be difficult now to quickly obtain the hardware you need.

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 your audit or other compliance reporting.

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 and 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 current health and safety challenges we are all facing, many nonprofits are finding that getting board member buy-in for digital transformation is easier than ever before. Board members recognize that it is unsafe, or in some cases even impossible, for your nonprofit team to access the office, and they see the long-term value of digital transformation in increasing mission impact.

Donors get it, too. Increasingly we are seeing funders that are providing grants specifically for nonprofits to complete their digital transformation projects.

There is no going back, there is only moving forward. Digital transformation is part of our new normal and will only become more important. Organizations that invest today will see a return on their investment, and those that don't run the risk of falling behind their peers.

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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Brenda Kahler
Senior Manager
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