Limit Oversharing

Maintain Consistent Security Awareness Training

Implement the Basics of Secure Logins

Backups are Vital

Conclusion

It’s practically impossible for any business or organization in any industry to thrive without the use of technology. As technology becomes more advanced and the world becomes more reliant on these systems to stay connected, integrating tech features into your nonprofit is almost a requirement for success. 

Nonprofit organizations can use technology to improve their efficiency, expand their reach, and make their existing financial processes more effective. You don’t need to have a dedicated IT department or a tech guru on staff to benefit. Finding new ways to use technology is something that any organization can do across areas like communication and engagement, as well as fundraising and financial management. 

If you think your nonprofit needs a hefty budget to work with various tech products, think again. While highly sophisticated tech programs may be out of reach for many organizations, there are options across the cost spectrum, so any nonprofit can find something that fits its needs. Plus, implementing tech improvements in targeted areas can lead to lower operational costs and higher donations, so the initial cost is an investment that essentially pays for itself. 

Where to Use Technology in Your Nonprofit

Do you need more social engagement with potential donors and volunteers? Is there a disconnect between remote team members? Are nonprofit finances monopolizing your time? How you choose to integrate technology will depend on what specific areas your organization needs it the most. With that being said, many nonprofits find that managing their finances is an especially challenging task. 

Between managing employees, rallying volunteers, creating programs, and connecting with people who need their services, nonprofits rarely have time to give their financial management the attention it needs. Whether you know close to nothing about nonprofit finances or have a wealth of knowledge on the topic, financial management technology is beneficial. It allows you to focus on what’s most important – expanding your organization’s reach and helping those in need. 

Software as a Service (SaaS)

Many technologies that can provide solutions to the above questions can be solved with software-as-a-service or SaaS products. Companies create these software products that are targeted to resolve a specific issue that your nonprofit might be having. These products are built on a subscription model, so you can experiment with which solution your nonprofit prefers with a low cost up front investment. Examples of well known SaaS products are: Slack, Zoom, Donorbox, Salesforce, and more.

Financial Management

Technology for nonprofits can improve your data collection and allow you to make more informed analyses and reports. Certain softwares can help you better manage cash flow and allocate resources. Strategic planning, regulatory compliance, and fundraising can also benefit from targeted integration of technology. 

Access to grant funds is becoming increasingly competitive, so proving your organization’s effectiveness and presenting your service outcomes in a clear, convincing way is crucial. Tech tools can make applying for grants simpler and improve your chances of receiving grants. Further, donors want to know that their money is making a difference. Data-collection tech is an easy way to show the impact of an organization’s programs and show your donors exactly how their money is helping.

Even something as small as using accounting software tailored to nonprofits can make a significant difference in how your organization operates and the effectiveness of its systems. These programs help streamline nonprofit finances, and some programs even offer assistance with filing Form 990s at tax time. 

Artificial Intelligence

The rise of AI in the past year can benefit the world of nonprofits as well. Nonprofit treasurers can ask an AI chatbot for help with annual budget creation, with explaining complicated financial concepts or with just about anything! These chatbots are available mostly free of cost and can assist any member of a nonprofit board with their daily tasks.

Nonprofit Bank Accounts

Another area in which nonprofits can benefit from services targeted at their unique needs is banking. Business bank accounts and basic checking accounts are unlikely to fit the bill. Managing your various costs – operational, administrative, and program expenses – is cumbersome without the proper tools and systems. Choosing the right nonprofit bank account can also help you in other areas of operation, such as fundraising. 

How can a tailored, technology-driven nonprofit bank account help your nonprofit thrive? You’re likely to find it easier to manage and monitor your donations and expenses, process additional forms of payment, pay employees, and file your tax returns. As a nonprofit organization, your banking needs differ from those of an individual or a for-profit business. Banking with an institution that is familiar with your specific concerns is important for the success of your mission. 

Crowded Bank Accounts

Crowded offers bank accounts tailored specifically for nonprofits, which means its accounts and services were created with organizations like yours in mind. Crowded has no monthly fee, or minimum balance requirements, and includes unlimited free transactions. Plus, you can set up and manage your account completely digitally. 

Crowded understands how nonprofits function and what financial services they need to run smoothly. Collecting payments, controlling member spending, and establishing passive fundraising programs are all simpler with Crowded. 

Innovative Ways to Fundraise

Having a personalized place to put your donations and funds is helpful, but how can you raise money for your nonprofit and use technology to increase charitable giving?

Finding new and more effective ways to raise money for your nonprofit is the only way to continue operating and making an impact. Technology offers a tremendous opportunity to diversify your fundraising efforts, from fundraising software to donor communication systems. 

Fundraising software

Using a software geared towards fundraising can help your nonprofit reach your fundraising goals. These softwares can help you track donations and donors, create targeted messaging and marketing efforts and more. All of these technological advances are sure to bring in more donations to your nonprofit organization.

Shop-to-Give Programs

Your organization can receive free donations from shop-to-give programs, which allow shoppers to allocate a portion of their purchase each time they buy something at participating stores. You can make receiving funds from this method even simpler if you bank with Crowded because of their Crowded Rewards. 

Crowded’s shop-to-give program is a cashback fundraising tool that generates money for your nonprofit at no additional cost to your donors or to you. It takes minutes to set up, is endlessly scalable, and offers cashback on purchases at over 70K+ retailers. Your organization will receive 50% of the cashback earned by donors, and since supporters will still receive a portion of their cashback, this further incentivizes them to participate. 

Peer-to-Peer Fundraising

You can utilize peer-to-peer (P2P) fundraising to increase your donations through existing donor networks. Your current donors can create fundraising pages that broadcast your nonprofit’s mission and message to people in their social circles. This is an effective virtual strategy, and it presents a nearly passive method for connecting with new donors and increasing charitable giving.

Peer-to-peer fundraising operates on a large scale to raise awareness of your mission and expand access to donation sources. It also offers the added benefit of increasing volunteer and supporter engagement. 

Virtual Events

Fundraising events have long been a popular way to raise money for good causes, and with the help of technology, these events can be held virtually. Hosting virtual events means donors from any part of the world can attend, supporters with mobility or transportation challenges can participate, and your events won’t be limited by the physical space you have available. Your organization can get creative when planning virtual events and broadcasting live to supporters. Consider streaming a play, concert, ballet, or other live performance. You could organize an online auction, virtual black-tie gala, or trivia night. 

Website Giving

Giving through a nonprofit’s website is a popular cash flow source for nonprofits. If your website does not provide this option already, this is something you will want to implement as soon as you can. When visitors to your website browse your mission and programs pages, they will feel inspired to help. Don’t make it more difficult by leaving out an online giving page. Facilitate charitable giving by creating an online form where your donors can securely make donations right from your website. 

Technology and Your Nonprofit

How you use technology to improve your nonprofit overall, and its finances is dependent on your needs, goals, budget, and capabilities, but don’t feel limited by these parameters. There is technology that can make a difference in day-to-day operations, strategic planning, program implementation, or financial management for every organization. 

Implementation

Create a wishlist of technologies that you want to implement in your nonprofit organization. Figure out what would you need and what’s in your way before adopting that new technology. Recruit the right people from within your organization who can help you achieve those goals! Remember, ultimately technology is meant to make your job easier!

Running a nonprofit means juggling many different objectives and responsibilities– with one of the most crucial being tax compliance with the IRS!

The IRS has established various laws and regulations that provide nonprofits with the benefit of exemption from federal income taxes. Even after obtaining tax-exempt status, however, organizations must still report their financial details, activities, and certain other information to the IRS by filing an annual Form 990 return.

This blog will offer you a quick and comprehensive overview of the steps nonprofits need to take to obtain tax-exempt status, the tax filing requirements they face, and how to ensure ongoing compliance.

Topics covered in this article:

1. How the IRS Classifies Nonprofits
2. Requirements to be Eligible for Tax Exemption
3. Obtaining Tax-Exempt Status
4. Tax Filing Requirements
5. Different Variants of Form 990
6. Deadline to File Form 990
7. What Happens If You Miss the Filing Deadline
8. Extension of Time to File Form 990
9. E-file Mandate
10. Conclusion

How the IRS Classifies Nonprofits

Outsourcing for Nonprofits: What It Is and Why It Matters

It’s no secret that nonprofit professionals often wear many hats. From fundraising to marketing to financial management, there are so many essential responsibilities for running a nonprofit that it quickly becomes expensive and time-consuming to hire a different person to fill each role. The smaller your organization is, the more likely it is that one staff member will have to take on a variety of activities that could benefit from specialized expertise.

However, there is another solution: outsourcing. When your nonprofit outsources certain responsibilities, you partner with external professionals specializing in those areas, saving time and money while gaining the expertise you need to achieve your goals.

To help you get started, this guide will provide you with an overview of outsourcing for nonprofits by answering the following key questions:

• What are the main benefits of outsourcing?
• Which nonprofit roles lend themselves to outsourcing?
• How do I find outsourced professionals for my nonprofit?

As you consider whether to outsource certain services, remember that every organization has unique needs and goals. Not only should the roles you choose to outsource align with your strategy, but the professionals you partner with also need to understand that strategy and be able to meet your needs. Let’s dive in!

What are the main benefits of outsourcing?

Ultimately, outsourcing aims to free up your staff members’ time so you can get back to focusing on your mission. However, there are a few additional benefits of outsourcing that your nonprofit can enjoy, including:

• Cost-effectiveness. Recruiting and onboarding new employees is expensive, not to mention the complete compensation package you’ll need to provide for their entire tenure at your organization. When you outsource, you can usually receive all your needed services at a much lower cost.

• Access to expertise. Although you’ll pay less for outsourced services than an in-house professionals, you’ll still gain access to the same level of expertise in the role you’re trying to fill. You might even be able to tap into the knowledge and experience of a whole team of outside consultants, depending on what firm you choose.

• Scalability. Many outsourced professionals offer a range of service packages, so you can choose the one that aligns with your current needs and budget. Then, you can scale up or down as your organization’s situation changes.

• Risk management. Diversifying your team through outsourcing can help prevent risks at your nonprofit. Ensuring your organization is adequately staffed can open up everyone’s time to check in with each other and increase visibility across your team, which reduces the likelihood of risky situations arising. Plus, outsourced professionals provide an outside perspective to help identify potential risks that sometimes go unnoticed internally.

To maximize these benefits, make sure to hire professionals who have experience working with nonprofits. Operating a nonprofit is very different from running a for-profit business, so your outsourced partners must have a strong understanding of nonprofit regulations and success strategies for your partnership to succeed.

Which nonprofit roles lend themselves to outsourcing?

There are many services that your nonprofit could outsource, so you’ll need to evaluate your budget and compare your levels of need for each potential service to hire the best combination of outsourced professionals for your organization. 

Some of the most common roles that nonprofits outsource include:

• Information technology. External IT professionals can set up new software, create logins for each of your team members, troubleshoot technical issues, and ensure you follow best practices for security and privacy compliance.

• Marketing and design. Each nonprofit marketing professional you encounter will likely specialize in a different area of communications or design. For instance, one agency might be entirely dedicated to building websites, another may provide direct mail marketing support, and another might focus on Google Ad Grants management.

• Financial services. There are two main types of outsourced financial professionals your nonprofit could hire: accountants and part-time chief financial officers (CFOs). An outsourced nonprofit accountant handles essential financial reporting and analysis tasks, including reconciling your bank accounts and filing your annual tax returns. Meanwhile, a fractional CFO focuses more on the strategy side of nonprofit financial management, with responsibilities such as cash flow forecasting and developing your annual operating budget.

When choosing which roles to outsource, the most important consideration is whether you already have someone at your organization with the knowledge and experience necessary to do a job well. For example, if your fundraising coordinator has a degree in marketing and worked as a social media manager before coming to your organization, you may not need to hire an external marketing consultant. But if no one on your team is a certified public accountant (CPA), you’ll probably want to outsource your accounting services.

How do I find outsourced professionals for my nonprofit?

Hiring outsourced professionals is slightly different from recruiting and onboarding new staff members. Outsourcing is typically more streamlined because you don’t have to complete the process of creating job postings and conducting formal interviews. However, you must carefully consider which agency or individual contractor to partner with to find the best fit for your organization’s needs.

Averill Fundraising Solutions’ consultant hiring guide lays out the following five-step process for partnering with an outsourced professional:

• Identify your goals and needs. Start by clarifying what your organization hopes to accomplish, then work backward to determine what type of support you need in that process. For instance, if one of your goals is to collect more online donations in the coming year, the gap you need to fill might be building a more effective donation page, which an external web developer could help you do.

• Leverage your network. Reach out to other nonprofits in your community or vertical to see if they’ve worked with the type of outsourced professional you’re looking for, and if so, ask about their experience with the agency or contractor they hired. You can also use online tools to aid in your research, such as consultant directories, Google reviews, and even LinkedIn.

• Meet with your top candidates. While this doesn’t have to be a formal interview, it’s important to talk to potential candidates either in person or over the phone. This way, you can gauge their interest in working with you and whether they could collaborate effectively with your team.

• Request proposals and check references. Ask your top three or four choices to submit proposals detailing their plan for working with your organization, their credentials, and projected cost. Additionally, request references so you can better understand what it’s like to work with that professional.

• Sign a contract. Once you make your final decision based on the proposals you receive, discuss the final details of your work agreement with your outsourced partner and sign a contract. This makes your partnership official and ensures everyone is on the same page as they begin their work.

Keep in mind that the outsourcing process isn’t always linear. It’s completely fine to continue adjusting your goals as you research or return to your network after meeting with a few options that aren’t the right fit.

However, sometimes you have a deadline to meet for an activity that requires an outsourced professional. For instance, you might need to find a direct mail marketing service to get your year-end fundraising appeals out before GivingTuesday or hire an accountant to file your annual Form 990 by its typical due date of May 15. In those cases, start your search well in advance if the hiring process takes longer than expected.

Outsourcing is a great way to gain access to the expertise your nonprofit needs to accomplish specific tasks while saving time and money. Just make sure to choose an external partner who has experience working with nonprofits, provides services that align with your needs and goals, and offers pricing plans that fit into your organization’s budget.