The race to move their workforce to remote and the immediate challenges created by COVID 19 are behind most organizations. Many nonprofit organizations are now faced with delivering the organization’s mission with smaller budgets and reduced workforces. A recent study by the Chronicle of Philanthropy projects 93% of nonprofit organizations are positioned to weather the storm (July 2020).
This blog post highlights 5 key operational areas to focus on that will strengthen the nonprofit’s ability to weather the storm and remain resilient during these uncertain times.
1. FOCUS ON PRIORITIES
It is critical for the nonprofit organization to have razor sharp focus on priorities.
What is the mission and how will it be delivered and accomplished? Identifying priorities will ensure the delivery of the core mission, increase confidence in donors and stakeholders and drive the allocation of resources.
Understanding the current financial position and capacity will help to ensure the organization’s ability to sustain its mission and priorities. As a result of the pandemic, most nonprofits are reporting decreases in funding, endowment values and revenue sources. Many organizations as a result are reducing their workforce and operating budgets. Understanding the impact from these reductions will help to make informed decisions and define organizational priorities.
2. FOCUS ON KEY PROCESSES
Make a list of core financial functions needed to support the nonprofit organization’s priorities.
For many, these are transactional and may include the receipt of funding, processing payroll and payments to vendors. Step through each process from end to end. Include the stakeholders and process owners during this evaluation. Once the process has been defined, identify areas for improvement and automation.
Clearly communicate the organization’s priorities, processes, and responsibilities. This will help everyone to see the big picture and their role in achieving it.
3. FOCUS ON NECESSARY SKILLS
Many nonprofits are experiencing significant reductions in staff.
This is requiring those remaining to do more with less. As key priorities and processes are identified, addressing the team’s core competencies, and identifying gaps will optimize efficiency and effectiveness.
Training and re-tooling may be necessary. Proper training can increase a team’s efficiency and productivity. Training can also help your organization achieve greater consistency in process adherence, making it easier to achieve the organization’s priorities.
Identifying the required skills to support the operation may prove that it is necessary to flex and obtain skills from the organization’s partners and board members. Identifying professional, technical and talent requirements will enable the organization to optimize resources and minimize redundancies.
Over the past several weeks, the Serenic Software Customer Care team has been receiving a significant increase in requests for training. Many of these requests are focused on expanding the use of automation and advanced functionality as well as reviews of key processes areas, as many users are having to serve in multiple capacities or assume additional roles.
It is important to note, the maintenance of proper internal control and segregation of duties is important as teams are cross trained and utilized. Doing more with less does not mean throwing out good policies and controls.
4. FOCUS ON TECHNOLOGY
As the organization shifts to respond to the current environment, so will its dependency on technology.
The fluidity of the workforce moving between remote and on-premise present several issues including data security, mobility and a heavier reliance on remote access, virtual networks, and electronic communication tools.
Assess the risk of accessing sensitive data remotely. Security experts recommend using virtual private networks (VPN’s) to support remote access to sensitive data. Additional best practices include the promotion of security awareness, use of approved devices and strong authentication practices. This added burden can present increased costs and dependencies on an IT operation.
The need for real time access to systems and data is critical to supporting the organization. Does the organization’s current ERP system provide secure web based or mobile access with appropriate security as described above? Is it comprehensive to provide appropriate workflow and approval processing? Focus on priorities and processes will help to identify potential gaps in the current ERP.
The demands coupled with decreasing resources may result in a need to move significant workloads and operations to the cloud. On-premise environments create significant dependencies on access to buildings, personnel, and technical expertise. Migrating applications, databases, websites to the cloud reduces risk and optimizes resources. The benefits to the organization may include reduced IT costs and increased performance and efficiency and overall operational resilience.
5. FOCUS ON BUSINESS PARTNERSHIPS
Evaluate the organization’s business partnerships to optimize resources and opportunities for efficiency and expanding capacity.
There are opportunities across many areas of the operations that may benefit from leveraging partnerships.
Peer to peer – Working with your partners that share similar missions may provide opportunities for synergy and cost sharing.
Banking – Many banks offer a wide range of services to streamline and automate routine vendor payments and payment collection. Tools are available to integrate these services directly with the organization’s ERP. As a result of moving the workforce to remote, Serenic has worked with several customers to implement electronic payment, check capture and purchasing card processes. This has resulted in significant efficiencies and minimized the need for physical interaction.
Payroll providers – Compensation and benefits are the largest cost centers for most nonprofit organizations. Allocating costs across grants and programs is time consuming and costly. Focus on the payroll process and service options available by the organization’s payroll provider may reduce the need for manual adjustments. If the organization internally processes payroll, evaluate and leverage technology to support the payroll process. Leveraging a partner’s expertise in human resources and payroll processing may help the organization focus on priorities.
Focusing on what matters to the organizations strategy and the operations to support that strategy will help nonprofit organizations remain resilient.
About the author:
Jennifer Bonenfant, CPA, MBA
Jennifer has over 25 years of experience serving the nonprofit community. Her experience ranges from auditor to board president, and everything in between. In her current role with Serenic Software™, she works with the market leading solution, Serenic Navigator™ to help nonprofits to design strong, resilient infrastructures that support financial operation excellence. She is a leader both in her local community and in board service to her alma mater.