Financial Management

Managing growth with software

Nonprofit operations need to be flexible in order to accommodate growth over time. As an organization gets bigger, its staff, resources, finances and programming need to adapt at the same steady pace. Investing in nonprofit management software is an excellent way to prepare for tomorrow’s expansion, today.

Growth after success
Catholic Charities Forth Worth is a faith-based nonprofit that lends aid to people struggling financially. The Washington Post reported that the group began a pilot program called Stay the Course in 2012 in which they paired their customers with social workers who could help them enroll in community college classes that would eventually lead to living wages and consistent employment in the Forth Worth area. While just 19 applicants received assistance in 2012, the program was so successful that Catholic Charities Fort Worth took on a team of economists to study affordable methods for keeping underprivileged people in school.

In the last ten years, nonprofits like Catholic Charities Fort Worth have grown both in size and number. According to Urban Institute, the number of nonprofit organizations grew 25 percent between 2001 and 2011. These charities are also earning more. The $779 billion garnered by nonprofit goods and services in 2009 made up 5.4 percent of the U.S.’s Gross Domestic Product that year.

Planning for expansion
​BridgeSpan found that the three sectors of the nonprofit industry that earn the most are global development, health care and human services.  Between 1998 and 2008, U.S. philanthropic funding donated to global issues doubled from 12 to 24 percent. These are big organizations tackling widely covered and publicized causes.

As Steve Thomas, a financial consultant for nonprofit organizations, noted, “If you’re not growing, you’re dying.”

Thomas stated that growth is a necessity in the nonprofit industry, though he recognizes the issue this presents to many organizations. Cutting spending and managing overhead expenses is a constant struggle for many charities. However, there’s only so much a group can get rid of before they run out of resources. Healthy growth takes investment and the best time to start is now. Before expanding, remember:

  • Growth is change. Many short- and long-term operational activities will not be the same after a significant gain. Prepare adequately for this next step in the nonprofit. The Conservation Company stated that systems and culture need to reflect this transition. Revamp or update programs and make sure they operate efficiently.
  • Nonprofits need to really embrace new ideas and not be afraid to try something new during a transition. Be honest about the state of the organization; if it’s not a financially healthy move to expand, wait until a better time.
  • Discuss plans to add programs with the most involved donors. Those constituents that give small amounts regularly or large sums at once will want to be informed of any major changes.

Investing in nonprofit management software can help organizations not only prepare for expansion but execute it as well. Without an effective and reliable system supporting donor information, financial figures and much more, any form of growth could be overwhelming and unsuccessful.