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5 key management disciplines that an ERP solution can improve for Nonprofits

from  July 18, 2023 | 4 min read

Nonprofit organizations face unique challenges when it comes to managing operations and finances. With limited resources and a need to be transparent to stakeholders, it can be difficult to maintain accurate and up-to-date information. Fortunately, technology has made it possible to streamline these processes with an ERP (Enterprise Resource Planning) solution that addresses the unique needs and challenges of nonprofit organizations.

Here are 5 key management disciplines that a nonprofit organization can utilize with an ERP solution:

1. Donor management:

One of the key challenges that nonprofits face is keeping track of their funds and donors. This includes tracking the donor’s giving history, donation preferences, fund utilization constraints, and reporting requirements. An ERP system also allows nonprofits to automate their donation processes. This includes everything from enabling digital giving to providing tax receipts, setting up recurring donations, and recording grant conditions. By automating these processes, nonprofits can reduce the weight of manual administration and remove the risk of error, improving the efficiency of their operations.

ERP systems also provide robust reporting and analytics capabilities that allow nonprofits to track and measure the effectiveness of their fundraising efforts. By analyzing funding data giving patterns, and donation types, nonprofits can develop targeted fundraising campaigns that resonate with their supporters.


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2. Grant and project management:

ERP software streamlines the grant and project management process by enabling nonprofits to track funding, budgets, timelines, and outcomes. By keeping all grant and project-related data in one central system, staff can quickly and easily access important information and ensure that grant utilization requirements and regional reporting regulations are met.

ERP solutions automate tasks such as project tracking, invoicing, and budget tracking, making it easier for staff to focus on delivering their mission. For instance, the ERP solution can automatically send reminders to staff about grant-related deadlines, reducing the risk of missed deadlines that could negatively affect grant funding.

Nonprofits can also use ERP solutions to monitor the progress of a project, ensuring that they stay on track and deliver results on time and within budget. By providing this level of transparency and visibility, trust and accountability can be built with donors and funding agencies, thereby ensuring compliance and improving their chances of securing future funding.

ERP solutions enable nonprofits to generate comprehensive reports on grants and projects, providing funders with clear and accurate data on the project or program outcomes. This helps nonprofits to evaluate their impact and make data-driven decisions about future grant applications.

3. Fund accounting management:

As a nonprofit organization, managing funds is crucial for sustainability and growth, and they require specialized accounting features to manage multiple funding sources, grants, and restricted funds. With an ERP solution, you can streamline and automate your fund accounting processes, allowing you to make informed financial decisions and optimize your operations, manage and understand the financial implications of sub-awarding to local partners and agencies, including the disbursement process, or understand company resources, such as fixed assets, to help allocate and reallocate effectively. 

One of the key benefits of using an ERP solution for fund accounting management is the ability to easily track and manage funds, as it allows you to create and manage multiple funds, assign budgets across projects, record and report direct and indirect fund allocation and track expenses and impact against each fund.

ERP solutions also provide advanced reporting and analytics capabilities, enabling you to gain insights into your financial performance and make data-driven decisions. You can generate detailed reports on your income and expenses, monitor your cash flow, and identify areas where you can reduce expenditure or increase fund utilization.

Another advantage of using an ERP solution for fund accounting management is improved transparency and accountability. Donors and other stakeholders want to know that their funds are being used appropriately and effectively. With an ERP solution, you can easily track and report how funds are used, ensuring you comply with regulations and meet stakeholder expectations.

In addition, an ERP solution can help you reduce the risk of errors and fraud in your financial processes. By automating repetitive tasks such as data entry and reconciliation, you can minimize the risk of human error and free up your staff to focus on higher-value tasks.


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4. Volunteer management:

Volunteers are the essential feet on the ground for any nonprofit organization. With an ERP solution, nonprofits can easily manage and update their volunteer data, keeping track of their contact details, payment and bank information, right to work documentation, interests for volunteering, and proof of good conduct. Nonprofits can use this data to assign volunteers to relevant projects or events based on their availability and skills.

An ERP solution also enables nonprofits to streamline volunteer management through review and vetting steps, and the creation of volunteer resources, track the volunteer assignments, hours worked, and expenses in order to generate reports, which can be used for grant applications, etc., with this feature, nonprofits can measure the impact of their volunteers on their programs and services.

Nonprofits need to adhere to GDPR regulations globally; for example, when a volunteer is no longer registered for projects, their record needs to be withdrawn from access and noted as ‘anonymized due to inactivity or upon request.’  Maintaining a clean and clear, accurate register of volunteers enables nonprofits to initiate projects confidently, and anonymizing volunteers lets organizations report on outcomes and resource capabilities without contravening grant requirements or global regulations.

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5. Make more impactful decisions

Essentially, nonprofits need to make smart decisions, not only for the communities they support but for their funders or stakeholders. In the past, organizations had to rely on spreadsheets and multiple versions of the truth, along with intuition and local information, to make important decisions. Today, with data managed effectively in ERP, nonprofits can ensure the accuracy of reporting and rely on hard facts and numbers to guide their choices. ERP data enables more accurate and effective decisions, resulting in increased productivity and cost savings, creating transparency, and delivering precision to decision-making.

ERP data allows nonprofits to make strategic decisions such as initiating new projects, optimizing project cycles, expanding into new regions, awarding new grants, or applying for new funding.  ERP data provides a single source of truth, enabling collaboration and enhancing access to key data points to make decisions.  From recruitment to procurement, donors to volunteers, an ERP built for nonprofits is the workhorse of the back office.

How Unit4 can help

Unit4 has been creating and delivering enterprise software to nonprofit organizations for over 40 years. Our cloud-based ERP, FP&A, HCM, and S2C solutions can help your nonprofit manage events and campaigns more effectively, allowing you to focus on what really matters – advancing your cause. With the right tools and strategies in place, your nonprofit can engage more supporters, raise more funds, and make a greater impact on your community and beyond.

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