Integrated systems boost your nonprofit’s organizational effectiveness — and keep funders happy

Nonprofits are facing enormous pressure to operate efficiently, effectively and in a way that satisfies their mission objectives, federal funders and private donors. Can better systems help relieve that pressure?

Migrating to cloud-based, integrated systems can help boost your nonprofit’s organizational effectiveness and make it easier to serve your constituents. Crucially, they can also make it simpler to demonstrate outcomes to your funders.

Keep reading to learn more.

What systems are nonprofit organizations currently running on?

Many nonprofits still run on legacy systems designed to fit an earlier iteration of the organization. These often include a finance system, an intake system and various program systems. Any gaps are often filled in with spreadsheets.

Program systems, especially, may be old or inflexible, to the point where they do not allow for data exchange or effective and efficient reporting. Some are state-mandated, with lots of special rules and requirements around usage.

But even finance and intake systems, which may be newer than program systems, are still often several generations behind the capabilities of current tech.

Older systems mean nonprofits struggle with disconnected data

One of the biggest challenges of relying on legacy systems (beyond a clunky user experience) is that older systems can’t talk to each other or share data. This means team members will often have to spend many hours a month pulling data from individual systems and putting it into spreadsheets for analysis and reporting purposes.

For example, an often-heard complaint is the need for the double-entry of information to satisfy state-mandated systems for compliance reporting.

As a result of challenges like this, team members have less time to give to higher-level work. Decision-makers also suffer from limited visibility into how their organizations are performing.

What does a modern, integrated nonprofit tech stack look like?

Nonprofits looking to strengthen their organizational effectiveness will typically benefit from investing in four technology pillars. These include an enterprise resource planning (ERP) platform, a customer relationship management (CRM) system, integrated program tools and unified data.

ERP

Think of an ERP as a central finance and operations hub for your nonprofit. It replaces your existing finance system with a cloud-based, modern alternative that integrates with your other systems, allows you to automate reporting, maintain audit readiness and more easily meet compliance requirements. Crucially, an ERP gives you real-time visibility into how your nonprofit is performing. Easterseals New Jersey is an example of the impact a modern cloud-based ERP can have, as outlined in the case study.

CRM

A CRM is a modern alternative to your nonprofit’s legacy intake system. It allows you to more effectively centralize and manage your relationships with your constituents, evaluating cross-program needs not just for the individual, but for the whole family.

Integrated program tools

Even if you are using state-mandated program tools that can’t be replaced or directly connected to more modern systems, you can use workarounds like robotic process automation (RPA) to quickly extract or enter data, overcoming double-entry needs.

Unified data platform

A unified data platform brings information from your ERP, CRM and program systems into a single, governed source of truth for outcomes and compliance reporting. By standardizing common definitions for clients, households, services, funding and outcomes, it enables cross-program analysis that shows who you are serving, what services they receive.

Since outcomes are recorded over time for both individuals and families, it allows you to do longitudinal analysis on your organization’s impact on a family and the community they live in. It also reduces the drudgery of manual spreadsheet work by automating data refreshes and creating consistent dashboards for leadership, boards and funders.

Additional systems as needed

Beyond these primary pillars, you may also benefit from adding additional systems as needed. These could include migrating to a modern HR system to help you better understand your staffing needs and how additional team members could improve your ability to deliver outcomes for your constituents.

How do integrated systems help nonprofits operate more effectively?

Tech systems like ERP, CRM and integrated program tools can dramatically improve your organizational performance and funder satisfaction. These tools make it easier to evaluate your current effectiveness, demonstrate outcomes to funders, make proactive decisions, qualify existing clients for additional services, leverage AI and focus on higher-value work.

Empower decision-makers

Integrated, cloud-based systems give your leaders clearer visibility into your entire organization. You’ll know what’s happening, where your funding is going and whether your team is delivering outcomes, allowing your leadership team and your board to make more proactive strategic decisions.

Understand your costs

An ERP will give you more detailed cost breakdowns by grants or programs, allowing you to clearly understand cost per service and cost per client. For example, you can track how much you are spending to deliver a specific service to a specific person or even cost per client per service if you offer multiple services.

 Demonstrate outcomes to funders

Because both federal grant regulators and private donors are increasingly focused on outcomes, demonstrating those outcomes has become essential to your financial survival. New systems make it easier to show the results you’re delivering, as well as create data stories that highlight those results with a degree of rigor that goes beyond simply sharing anecdotes.

Manage compliance and audit-readiness

Modern systems simplify compliance by allowing you to store all your documentation in digitized, easily accessible form. This also speeds up the audit process, as you (and your auditor) won’t have to dig through reams of paper files.

Broaden your reach

Migrating to a CRM means you won’t have to do multiple intakes for the same constituent just to qualify them for different services. You’ll already have a constituent’s eligibility information stored in your CRM after their first intake, so you can quickly qualify them for additional services (as well as evaluate whether they have qualifying family members), broadening your reach and impact.

Make better use of AI

With AI, the quality of inputs determines the quality of outputs. If you don’t have clean, integrated data, using AI will actually cause negative value. But modern systems and unified data give you the data foundation you need to make better use of AI and automation to strengthen your organization.

Focus on higher-level work

Legacy systems typically involve cumbersome, manual processes that take up a great deal of your team’s time. Modern systems allow you to automate much of that work, freeing up your team to focus on higher-level analysis or client-facing work.

How should nonprofit finance and operations leaders start implementing an integrated tech stack?

Nonprofit CFOs, COOs and IT leaders considering implementing an integrated tech stack should start by evaluating specific organizational challenges that newer systems could help solve. This should flow through to a transformation plan that can be implemented over time, in phases.

Here are key steps to the process:

1. Discovery

Think about problems your team is currently dealing with as a result of your legacy systems. These may involve areas like compliance, reporting, data entry, intake challenges or exciting donors. Consider which systems are limiting those workflows and how you could potentially migrate to more effective options.

You may benefit from consulting a third-party advisory firm here. An advisor can help you evaluate your current systems and processes as well as understand which new options might help solve your current organizational challenges.

Look for an advisory firm that has experience working with both digital systems and the nonprofit sector.

2. Planning

Based on your discovery work, create a tech transformation plan that is focused on solving the specific organizational challenges you have already identified. Figure out whether your program tools have the backend capability to integrate directly with a new ERP and CRM or whether you need to implement workarounds like an RPA.

3. Phased implementation

Don’t try to overhaul your entire tech stack overnight. Start with pilot programs to get your feet wet, and develop internal change champions to help lead your team through a phased implementation process. Think about this approach in terms of crawl, walk, run.

4. Change management

Embracing change management is essential throughout this entire process. Keep open lines of communication with your team, including leaders, frontline team members, your board and other stakeholders. Make sure everyone involved understands why technology change is happening and has opportunities to offer feedback and share their perspectives on what’s going on.

How Wipfli can help

We advise nonprofits on strengthening performance, compliance, impact and financial resilience. Let’s talk about the challenges you face and how tools like new systems could help you solve them. Start a conversation.

Read more

• For nonprofits, tech is an investment, not a cost center
• How ERPs help nonprofits to cut costs and boost impact
• Nonprofits with strong boards outperform peers. Here’s how to improve yours.