How tech & culture support sustainability

Key Takeaways from BDO’s June 7th Event "Top Challenges & Opportunities Facing Nonprofit Organizations Today.”

During BDO’s event, “Top Challenges Facing Nonprofit Organizations Today,” Matthew Becker, a partner in BDO’s Nonprofit practice and Cathryn McAleavey, BDO FMA Managing Director, joined Citi, ADP and The Giving Block and 40 nonprofit industry leaders in discussing how nonprofits can pivot operations to improve efficiency, maximize ROI, retain and attract resources and enjoy success moving forward. Four key takeaways provide direction.

1. Embrace technology to enhance efficiency and increase transparency

Technology can help nonprofits optimize processes to seize opportunities for fundraising and overcome a variety of current challenges, including rising cybersecurity risk and staffing shortages.

Organizations are increasingly leveraging artificial intelligence (AI) technology to take a deep dive into donor pools. Tech-enabled data analysis can help nonprofits determine who is most likely to give, identify their most involved donors, and uncover the best ways to engage them

Nonprofits that adopt technology are also better prepared to mitigate current threats and challenges. The pandemic sparked a shift to remote work environments and online operations, creating new opportunities for cybercrime. Nonprofits that switch to digital payments and concentrate cash in a global pool via automation can benefit from more transparent tracking. Additionally, as the labor shortage continues, nonprofits that automate their job application and hiring processes are well-equipped to fill empty positions with minimal interruption.

2. Reassess organizational culture to retain and attract talent

Streamlined application and onboarding ensure that positions are filled, but a strong organizational culture increases the likelihood that new hires are motivated to remain at and grow with the nonprofit. Shifting employee expectations and stiff competition for labor provide ample incentive for nonprofits to reassess their practices, policies and offerings.

It’s a worker’s job market, where employees are leaving employers for jobs that offer them greater work-life balance, mission alignment and other benefits. Nonprofits should explore their benefits packages and ensure that they have competitive and equitable offerings, including paid time off, mental health benefits, and other programs. It is also crucial that nonprofits looking to retain employees offer opportunities for career advancement. Professional development initiatives allow trusted staff to acquire valuable skills and apply them to furthering the nonprofit’s mission.

Organizational culture also encompasses the intangible. Decisions should be made with the goal of caring for employee mental health and avoiding burnout. Nonprofits should consider whether employee feedback is sought and implemented, whether collaboration among colleagues is valued over competition, and whether their practices and policies are equitable, and then adjust accordingly.

3. Consider outsourcing operations to multiple vendors

Nonprofits looking to support and retain employees might want to consider outsourcing key responsibilities and functions to multiple vendors. Outsourcing to specialists human resources, marketing and other work not directly related to the nonprofit’s mission can help boost staff morale and return on investment (ROI).

Some nonprofits with limited resources try to handle as many tasks as possible in-house. This practice can have the unintended result of overwhelming employees and distracting them from the mission-related work that initially drew them to the role. Others outsource all work not directly related to the mission to one vendor. While less time-consuming than performing these functions internally, outsourcing to a one-size-fits all operation might not be the most cost-effective or efficient option.

Nonprofits might maximize ROI by placing select responsibilities in the hands of specialists. Nonprofits that choose this route benefit from expert help in essential areas and have a greater ability to customize their outsourcing plan to meet their needs as they scale and navigate economic uncertainty.  As they diversify their network of vendors, nonprofits are encouraged to do their due diligence. In addition to key considerations like cost and scope of services, nonprofits will want to ensure vendors’ values align with their mission. They will also want to make sure vendors follow cybersecurity best practices.

4. Develop a plan for sustainability

Embracing technology, improving organizational culture and reallocating responsibilities can all be a part of a nonprofit’s plan for sustainability. While it’s important to make plans, recent years have demonstrated how easily even the best laid plans can go awry.

Nonprofits that engage in scenario planning can prepare for the worst as they strive for the best. Scenario planning involves organizations thinking through their best- and worst-case financial scenarios to determine what steps they would take in each situation. What expenses would be reduced in a worst-case scenario? Alternatively, what investments would be made in a best-case scenario?

Nonprofits are also encouraged to develop multiyear models to help them look beyond the annual budgeting cycle and understand what financial resources are needed to meet their goals over the next 3-5 years. It is crucial that nonprofits engage their boards in multiyear planning.

BDO’s June 7th Event, "Top Challenges & Opportunities Facing Nonprofit Organizations Today,” initiated important dialogues about the future of nonprofit work. Organizations that leverage technology for key insights and efficiency, prioritize improving organizational culture, diversify their network of vendors and devise a detailed sustainability plan today are likely to seize tomorrow’s opportunities and mitigate its challenges.

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