How Scarcity Can Impact Nonprofit Software Procurement

Nonprofit Software Decisions Come from Scarcity

Would you agree that nonprofit management is all about juggling resources in the context of scarcity? After all, the mission typically in a nonprofit is to aid as many people as possible with finite—often scarce—resources. Right? In this article, I discuss recent studies on how people deal creatively with having little. And, how software procurement in the nonprofit community is likely linked to the phenomenon of scarcity.

The Scarcity Effect in Software Procurement

As a software adviser, I tend to find myself out on the road at a client engagement quite a bit. So during my time away, I take the opportunity to read ( a lot) especially since I struggle to do so sometimes at home due to a demanding yet rewarding home life with a lovely wife, two children, and sometimes our annoying dog, cupid who constantly wants to be let in and out to chase squirrels.

That said, I had the chance to read an article on scarcity found in Fast Company. The article was co-authored by an Illinois University professor of business administration Ravi Mehta, who set out to investigate the link between resource availability and consumer creativity.

The article made me contemplate the concept of scarcity as it relates to software procurement. Here is an excerpt:

While scarcity has been a pervasive aspect of human life, … people in modern industrialized societies take resource availability for granted. Consumerism and over-acquisition have become the order of living and abundance has emerged as the norm, especially in the first world societies.

After reading the article, I began to ponder the question- What happens when scarcity rubs up against the inclination to take resource availability for granted? Then, this led me to take a closer look at nonprofit software decisions and how scarcity played a part in software procurement and even nonprofit management.

The Resource Availability Trap

It’s obvious, Nonprofit staff, from executives to frontline workers, are people driven by their organization’s mission. They typically epitomize the “squeaky wheel” notion, focusing their scarce time and energy each day on urgent priorities. As per the article outlines so well, this make-do-and-mend mentality is the way our grandparents—and in some cases parents—approached the world, ranging from jam-jars used as drinking glasses to cigar-box guitars.

In fact, I always laugh about an incident where my wife’s grandmother from Minnesota attempted to serve my wife and I a ham dinner from leftovers she had from a funeral service she went to two years prior.

Yikes! Suffice it to say, we decided to take her out to eat instead!

For many people, technology is a key tool in their business and personal world. Nonprofit staffers are not that much different. They too rely on technology to support their efforts: tracking financials, writing board reports, maintaining client and donor lists, managing events, getting out PR/marketing materials, attracting volunteers, and maybe keeping up with social media too.

The trouble arises when nonprofit employees perceive their technology to be inadequate to their immediate task. Why? As the Fast Company article indicates, their inclination is likely to be a pivot to find a way to use what they have without thinking about all facets of the business. In other words, most tend to acquire new software to better accomplish a specific task rather than view the problem outside of their immediate needs.

Creativity and Going Rogue

Now think about what Professor Mehta described, above. The scarcity decision here looks like this: We can purchase the right nonprofit software just to help us (circle the right answer) improve our donor tracking, manage event registration, or track our work with clients.

If we in our society are inclined to take resource availability for granted, we will pivot to purchasing the software we think we need just for one specific task—until the next task comes along for which our software proves inadequate (Read Going Rogue for more details). Moreover, we tend to be trapped into believing that purchase is the most efficient use of our scarce resources.

After all, when we are purchasing only the software we need for that single task. We’ll save money and time, won’t we?

Professor Mehta would beg to differ. Worse yet, as the Fast Company article shows, studies reveal that “abundance”—in this case, purchasing software each time we perceive the need to improve one type of task—“inhibits creativity,” leading us to think that the only “solution” is to buy more software piece by piece.

On the other hand, as Professor Mehta points out,

Given a problem with scarce resources, the human mind will twist and mull until it has a solution. This creativity is probably our species most important feature.

Scarcity’s Ideal Nonprofit Software Solution

Cobbling together intermediate “fixes” simply causes a delay in identifying and procuring the software automation solution that will bring real returns on the investment in time and money. To better understand the costs of this delay, click here to read my blog, Can Your Nonprofit Afford to Wait on Marketing Automation?

In other words, rather than purchase a jumble of limited software “fixes” which limit employees’ effectiveness and creativity, a nonprofit is better served by turning to a strategic software solution. A software fit that seamlessly integrates technology’s role and truly enhances all of the agency’s work. In more often that not, the result will be much greater financial savings and more efficient use of staff’s time and energy.

As a software adviser, I spend a great deal of time with executives who are dealing with the impact of scarcity and the impact it has on the tools implemented in various nonprofits today. In fact, one of the primary reasons executives are frustrated is because they lack an integrated solution. Rather, they deal with a collection of independent applications that have developed into a gargantuan hair ball of a mess.

I believe that there’s likely a software solution tailored to your nonprofits needs and budget. And, I believe that if fitted correctly it can make a huge impact in your nonprofit. But, it’s important to curtail our human desire in organizations to pull together the resources we have to solve the task in front of us problem after problem. And, instead take the necessary time to strategically contemplate a solution which will truly keep our organizations away from starving.

If you are struggling to deal with scarcity mentality in your nonprofit, juggling multiple systems, and need help with finding a software solution for your nonprofit we at SmartThoughts would be happy to help.

Contact us and start your organization on the road to maximum efficiency today. Until next time, keep SmartThoughts in mind.

Not for Profit Donor Management Software Guide

Trends You Need to Know About In Accounting in Nonprofits

Trends in Accounting Software for Nonprofits

For many nonprofit development officers, the EOY push to bring in more donations is always top of mind right now. But, while many non-profit executives should and are focused on bringing in a steady from of donations, an equal amount of time making sure that finances and accounting are in order is vital for all sizes of non-profit organizations too right now. In this article, I share 5 key takeaways I derived from a recent report on accounting trends for nonprofits which I believe you will find interesting and worth a read.

Accounting for Nonprofits 

As much as we all need to “attract” new members and donors, it’s equally the responsibility of nonprofit executives to be good stewards too with the donations they receive. Without question, your  top donors want to ensure their funds are well-used and properly managed. Abila, a software provider focused on non-profits, recently released results from their survey, Finance and Accounting in Nonprofits, which I believe does a good job of shedding some light on information about this topic.

Just to put it into perspective and the frame the study, the findings came from professionals which work at a broad range of organizations that take in between $1 million and $50 million in annual revenue. The sample of data came from 350 finance and accounting staffers at various nonprofits.

Below are my most notable thoughts on the trends in this report.

The Generation Gap in Accounting Practices

One of the study’s focal points was on how financial staffers from different generations viewed their responsibilities. Interestingly, there was not a lot of difference in responses between Millennials, Gen Xers and Baby Boomers. While the different generations may be in different career stages, most of them see similar challenges in their day-to-day work.

When I visit with executives seeking new software tools and technology, I do inquire during my assessments about the demographics of the organization’s constituents. And, suffice it to say there are a diverse set of age ranges with regards to staff in most nonprofits. In many instances, the Millennials seem to have a different opinion than Baby Boomers on what’s important and their expectations on how best to address it with technology. Therefore, these finding for accounting staffers was actually encouraging. Everyone seems to be on the same page!

Doing More with Less 

Non-profits as a whole are moving to have fewer finance staffers, so those that are in these positions have a more varied range of duties and more impact on day-to-day operations. Finance and accounting employees are spending their time running reports and taking care of immediate tasks rather than focusing on strategy and helping to move their organizations forward.

This is not much of a surprise to me. And, coincides with most everyone’s perceptions reading this article, but it made me contemplate how technology will become increasingly important in order to move forward for even the smallest of organizations.

More Integrated Departments

It’s great to have more input into other departments, so that everyone is more aware, but finance staffers are often asked to take on operations, human resources and other tasks that may fit outside the accounting umbrella. This also leads to one of the biggest challenges that the study uncovered: Daily interruptions from other departments. The exception seemed to be with fundraising, as finance professionals reported the least interaction with their cohorts in that department.

After reviewing this bit of information, I could not avoid thinking about the ongoing discussions in the “for profit” world about alignment among various departments. For years, many CRM (Customer Relationship Management Software) providers have touted the need for the right hand knowing what the left hand was doing. And, many cited integration with accounting as a key area of disconnect. These findings support the importance of having integrated data from all departments is as important in the nonprofit world too.

Moving to the Cloud Accounting Software 

Software solutions are more frequently cloud-based, which can be more efficient but also presents challenges in adopting new practices and ensuring security of information. Finance and accounting professionals often have responsibilities in implementing the financial side of this cloud-based software and keeping data secure.

Once again, this isn’t a nonprofit trend rather a movement by all organizations across the board and in all industries. More an more organizations are opting to have their data and their software managed off site and choosing software which is subscription based (rented) rather than owned.

Growing the Organization

Identifying new sources of funding and staying sustainable are key challenges for non-profit finance staffers. Nearly one-third of respondents said they expected growth to stay flat for at least the next three years. Abila’s report cited this understanding of how professional finance and accounting staffers work as being key toward ensuring that funds are dispersed according to the organization’s needs and donors’ wishes. Understanding the challenges they face can show trends both in finance and in the overall management of non-profit organizations which I felt was interesting.

Without a doubt, it’s important to be transparent and good stewards with the donations and contributions which come into a nonprofit. And, it’s apparent that the entire team can benefit from an integrated process & solution which may help everyone keep better tabs on their mutual efforts.

In short, I enjoyed this report and hope this frames the topic with some clarity. What do you think?

For your copy of the full report, please go here.

And, if you would like help identifying ways to increase the productivity of your non-profit organization with technology, contact us.

Until next time, keep SmartThoughts in mind.

Not for Profit CRM Guide for Software Review Process

5 Key Questions To Ask Before Googling Membership Software

Questions to Ask Before Searching for Membership Database

For most Associations, Membership Software is a vital part of your existence. And, the primary goals of a membership program are storing data, communication, building relationships through focused collaboration, and building value for your members. In order to achieve your mission, nonprofits must have the right membership management software to deliver value and remain a valuable resource. In this article, I dig into some of the key requirements I hear when helping associations select software today along with key questions to ask before embarking on the search.

Key Requirements of Membership Software 

The Need for Automation

During almost all of our projects, association executives express that they want to do better at maximizing staff time and productivity. As a result, time involvement and automation play a big role in deciding on online database software. In order to be efficient, software needs to be as automated as possible. Setting up routine email campaigns is often one of the most common form of automation desires. But, having the system be able to handle the dues remittance process and recurring payments are also expressed as crucial in keeping funds flowing into an organization. Without question, nonprofit software executives, are looking for higher levels of automation in their membership software.

The Necessity For Ease of Use

Over and over again, I hear during a software selection engagement is that the database software needs to be easy to set up and use. Again, this is a matter of time and efficiency. Many member focused organizations do not have the time or the staffing to deal with complicated software set up. Nor, do they want to have their members calling up if they can’t log into the system or register for an event either. Mobility of the solution is also a huge factor in the belief that a tool is easy to use or not. Everyone needs to be able to get on and do their business wherever that may be.

While not directly related to the actual database system, the software companies need to provide great customer service and tutorials to get the attention of association’s executives too. While nonprofit organizations want software that everyone within the organization can use and understand, they also want it to be less complicated. The days of having only one or two people which are able to use it are over. This means the software should be easy enough for the least tech-savvy person within the organization to grasp.

The Basic Right of Database Management

It is important for organizations to be capable of managing their membership database. You must be able to access member information easily. Organizations want the ability to pull statistics and crucial reports from their member database without having to call the software vendor. From my findings with nonprofit executives who are seeking a new management software, executives and board members alike want to know things like when their membership numbers are declining, increasing and why.

It’s all about your members right? They give life to your organization. And, therefore, members too want to get data out of your system too. The ability to manage membership data allows organizations to determine this important information. This is key for most executives today.

5 Key Questions to Consider Before Googling

Ask any nonprofit executive who has tried to do it recently, and I believe they will all agree that trying to find the right membership management software for their nonprofit association is a “mind-googling” experience to say the least. While you may have an idea of what you want or share some of the key requirements above, there are a multitude of membership management software options. They range from nearly free to way beyond the budget of any sane executive.

We keep track of nearly 100 membership software programs. And, the list is growing each and every month it seems with new offerings hitting the market. While I enjoy doing so, most sane people don’t!

Today, even the simple database software platforms offer solutions for dues billing, accounting, and event registration. And, as the systems grow in size, some of them have bells and whistles for marketing automation, education management, social media collaboration communities, & government relations .

As one of my recent clients expressed to me, “Isn’t there one membership management software out there that can fit all the needs of the association?”

With the insights into what most associations are seeking today, here are 5 thought-provoking questions to consider before you call that vendor or venture off to the Google God to begin your search for a membership management software for your association:

  1. Does the staff, members, & the board agree on the goals? In The End of Membership as We Know It, author Sarah Sladek emphasizes that the “era when associations could count on members joining and renewing” has passed. One of the top priorities in any association should be “technology-eased access to content and community”. Your metrics for success will help you make a decision on the right software program. But, unless everyone is on the same page, a decision will be harder to make and likely will produce a poor result. Like your organization, each software vendor is unique too. Matching the harmony between the two’s (nonprofit and vendor) uniqueness will provide the best fit.
  2. What is the difference between CRM, Membership Management Software and Association Management Software (AMS)? Though used interchangeably by vendors, there is a difference in all of the above. What is right for you? CRM (Customer Relationship Management) Software alone is different than Membership Software. Membership Software can be used by for profit organizations too sound that actually adds to some confusion who embark on the “Google” route. As for Membership Software vs. AMS Software, both track and store member contact data, dues and interactions; yet AMS’s typically offer a bundled suite that integrates accounting, education, events, committees, benefits, and renewals etc. You can easily get side tracked in your “Google” search if you don’t know what you need. And, searching for membership software alone in various search engines may likely lead you into a rabbit hole to hell if you are not keen on the differences. And to put more salt on the psyche, even if you get the nomenclature right, figuring out which one “fits” your size , budget, etc. can exhaust tons of time and effort by staff.
  3. Will our needs change in the next 3 years?  It is the unfortunate truth that many smaller associations are having trouble staying relevant and being able to offer what their members want. Be sure to look for a software that is able to grow and adapt with your association, just in case there is a merger or new objective which the board pushes your way in your future. I can’t stress this enough, just because you can afford it, doesn’t make it the right fit.
  4. What if you do nothing? I don’t care what anyone tells you, a software technology change of any kind is a drain before the glory of rewards. Therefore, you need to be prepared to know why you are doing this and what you anticipate to gain from the headache of doing the search and ultimately the implementation. Doing nothing is usually not an option but digging into that question can help define the key metrics by which you will gauge success in your project.
  5. Do you need a software advisement firm to assist you in finding the right membership software? The marketing noise pushed out today about the “Best Software” is plentiful. Suffice it to say, there are a number of posts online that talk about their software prowess; but what works for one nonprofit association, may not work for another. Like Thanksgiving, everyone’s plate is unique! With a software adviser, you may be able to more efficiently manage the software selection process and make a smarter decision in the end much faster with greater chance of success. But, like software, it’s not the right choice for everyone.

Having thoughtfully answered strategic questions before the search, can help streamline your project and assist you in making the best choice for your needs today and long term. After doing this for years, it’s interesting to me that many organizations usually have a tough time with the reality of what can be accomplished with technology. Further, they tend to avoid asking the hard questions before trying to find the magic pill to fix everything. Googling your way to finding a solution is a bad idea.

It’s critical to take the necessary time to delve into “The Man in the Mirror” so to speak. Certainly, knowing what to expect and what can be accomplished with membership programs before moving forward in a software selection search is paramount.

For a more in-depth assessment on your current technology and future software fit, contact us today to learn more about how we can assist with developing a strategy that is line with your budget and goals to help reach a return on your mission.

Until next time, keep SmartThoughts in mind.

Top 10 Checklist for Searching for Membership Software