As nonprofit finance leaders, we are charged with empowering our teams with the technology, skills, and support they need to adapt and grow. And because the digitalization of finance is happening so quickly, we need to be ready to take on new challenges while demonstrating exceptional nonprofit stewardship.
That’s why the latest report from Gartner, The Digital Future of Finance: 10 CFO Opportunities to Accelerate Digital Transformation, offers compelling insights for nonprofit organizations. Gartner’s research focuses on how technology can help restore and strengthen an organization’s financial health. As we prepare for an ever-evolving need cycle, we must simultaneously position our organizations for growth and leverage every opportunity to amplify our impact.
Our team identified three concepts in Gartner’s report that can help nonprofits position themselves for growth: Setting solid digital strategies, commitment to reducing waste wherever possible, and investing in the right technology.
My colleague Heather Cooper Johnson, Senior Principal Solutions Consultant for Fintech at Blackbaud, joined me for a webinar to discuss how nonprofit leaders can use these three initiatives to shape their futures—while stewarding donations appropriately and staying aligned to their missions.
For an in-depth look at the report from a nonprofit perspective, watch the entire “Gartner’s Imperatives for the Nonprofit CFO” webinar on demand.
1. Strategize for Dynamic Digital Acceleration
Gartner defines digital strategy setting as “tying investments in staff, digital, and new tools to achieving stated outcomes and growing the organization’s capacity.” For a nonprofit—depending on its mission—these strategies may include investing in new programs and services, as well as technology and staff training.
Here are the crucial things technology for nonprofit finance should be able to help us do:
LEVERAGE SMART FUND ACCOUNTING SOFTWARE TO IDENTIFY THE MOST EFFECTIVE REVENUE SOURCES
Software solutions can help finance teams upgrade their 30,000-foot view of the organization’s overall financial health and enhance nonprofit stewardship. These solutions include tools that enable your team to quickly and easily visualize data points and answer questions such as:
- To what degree are we able to accurately predict the flow of funding?
- Is the use of the funding restricted by conditions set by the funder?
- Are we raising enough money (restricted and unrestricted) to fund our mission now and in the future?
- How efficiently are we raising funds, and are our overall efforts achieving a high return on investment?
- To what extent are we dependent on a small number of large funding sources?
IMPROVE CONSTITUENTS’ EXPERIENCES
Your communities expect “anytime, everywhere” access to the programs, services, and information we provided as well as multi-channel engagement options—twice as fast as they did just a few years ago.
Today, a modern nonprofit CFO is responsible for ensuring that investments across the organization are aligned to serving constituents—in the ways those constituents, who aren’t exclusively donors, prefer to be served.
SUPPORT DATA-DRIVEN INVESTMENT DECISIONS
More than ever, CFOs shape strategies for technology investments that have reverberating effects inside and outside their nonprofits. Finance leaders should be able to calculate the projected ROI of their decisions—to make the business case for every hardware purchase and software subscription, report on the impact of those investments, and evaluate the need for upgrades or new technologies on an ongoing basis.
2. Identify Ways to Reduce Waste
As a former nonprofit finance professional, I know that whenever opportunities appear to reduce costs, we should embrace them. Technology empowers nonprofits to make budget-friendly moves to help us work smarter, not harder.
Gartner’s study found that even though most organizations are expecting a return to more normal revenue levels this year, the majority still indicated a desire to reduce the cost of operations. More than 20% of those surveyed intend to decrease the amount of spending in their finance offices.
But just because organizations are looking to trim costs doesn’t mean they need to cut staff. The bulk of cost reductions can usually be found through gains in efficiency. Look for allies and collaborators like IT teams, who might provide visibility into major expenses on the horizon and help avoid unexpected costs.
Companies can also look for ways to streamline the very systems they rely on. At one of my former nonprofit jobs, we used 32 separate technology solutions, but none of them “spoke” to each other. Our staff spent way too many hours juggling those solutions. We needed to enable the team to use their time more effectively. Eventually, we consolidated those solutions, but it didn’t happen overnight.
Gartner defines “digital waste reduction” as “using technology to help free up capacity from repeatable and transactional finance processes.” Instead of adding to an already towering tech stack, approach decision-making with a grasp of how much time (and training) teams need to learn new software, maintain systems, and manage vendor contracts.
In other words, our teams could be doing higher-level work (like decision-making) instead of monotonous tasks that can be streamlined or automated through technology.
For nonprofit CFOs, this is a clarion call to review business processes and evaluate their existing tech stack. Determine which tasks require high-level creativity, analysis, or other human intelligence—and which might be automated. Review current staff as well as future hires to see where they can play strategic roles that complement, not juggle, tech solutions.
3. Invest Wisely in Agile Technology for Good Nonprofit Stewardship
In its recent study, Gartner found that CFOs across industries prioritize their investments in technology. More than 80% of CFO respondents report accelerating investments in digital solutions—exceeding investments in talent, supply chain, business services, and fixed assets. And nearly 80% of finance leaders say understanding which technologies benefit finance is “very important” today.
One thing I know for sure, after working for 20 years in the nonprofit space: What we do today could look very different six months from now, and that’s okay.
For most nonprofits, this means creating a structural technology architecture that continually evolves, improves, and increases ROI for your organization. Nonprofit leaders should take a critical, objective look at their software solutions and be aware of several big-picture shifts:
- We may need to expect or create new operating models. With new technology comes new policies and procedures for how to accomplish our core work.
- As technology solutions become more advanced, finance professionals must have the ability to adapt their skill sets, respond, and thrive.
- We need to be able to blend different skill sets and operating standards to meet new challenges and make the best use of technology.
- We need to be agile, and our working principles need to be agile.
Be a Strategist and Catalyst for Change: Integral Characteristics for the Modern Nonprofit CFO
By acting on these three imperatives, nonprofit CFOs and their teams can be well on their way to dynamic growth and newly meaningful impacts on those they serve. Already, CFOs are more integral to their organizations than ever. They’re not in the back office; they’re front and center at the table, providing critical input and strategies to drive success for the entire organization.
“Finance and accounting roles have changed from top to bottom,” Team Rubicon CFO Dane Barata once said. “I’ve had to transform myself over the years from the ‘traditional CFO’ to a modern CFO—not just a steward of the budget but a strategist and a catalyst for change.”
Watch the full “Gartner’s Imperatives for the Nonprofit CFO” webinar