Nonprofits face some unique financial challenges, but the right tools can mitigate the risks and ensure financial stability. Do you want to ensure financial security in your nonprofit organization? Here are 5 essential tools you should consider.
Fundraising Platforms
Every nonprofit organization needs an online platform, preferably multiple platforms, to get its message out there. However, when it comes to fundraising, it is best to have a dedicated platform designed specifically for the task.
Fundraising software and platforms like Classy, Donorbox, Network for Good, etc simplify the entire fundraising process, with online donation forms and features that support donor tracking, event management, and even donation analytics.
However, you must choose the right fundraising platform for your nonprofit fundraising needs. One that not only enhances donor engagement and streamlines the donation process, but offers greater security, better financial management, and stricter compliance with local laws.
Consider using KYC software to enhance your donor verification processes. This will ensure that your fundraising platform is always compliant and secure. It will also boost new donor confidence and instill trust in your organization.
Financial Management Software
Financial management software helps any type of organization, including nonprofits, maintain accurate records. They also help streamline financial processes like budgeting, tracking donations, managing expenses, and generating financial status reports for stakeholders.
Don’t forget to include the details of your reserve funds, though. These emergency savings are set aside for uses other than normal operating expenses. Reserved funds keep a nonprofit organization reliant, sustainable, and able to deal with unexpected financial emergencies.
Financial Reporting Tools
As a nonprofit organization, you are accountable to the federal government and your stakeholders for how you manage your finances. To meet these important demands, you must ensure accurate financial reporting. Fortunately, different software and online tools help you do this.
Consider using data visualization tools like Tableau and Microsoft Power BI to depict financial progress. Financial compliance software like Fenergo is ideal for compliance tracking and customizable reporting based on your real-time data.
The tools you choose should integrate with your existing software and processes. But whichever financial reporting tools you select, they will help you meet the need for accountability and more sustainable financial practices. They can also facilitate informed decision-making about how funds are distributed.
Compliance and Audit Management Systems
In the US, nonprofits are exempt from federal income taxes under subsection 501(c) (3) of the Internal Revenue Service (IRS) tax code. Other countries have similar exemptions.
This means that you must meet specific criteria for a nonprofit organization and comply with specific laws, regulations, and accounting standards.
Audits ensure that nonprofits follow Generally Accepted Accounting Principles (GAAP). Are you wondering where your nonprofit stands on compliance? An internal audit is the key to determining exactly how compliant your organization is.
Incorporate compliance and audit management systems to ensure that you adhere to the regulations. Use the right software for your document management, compliance tracking, and audit trails. Compliancy Group, NetSuite, and Intacct are some examples that will simplify your compliance management.
Risk Management Software
Any business or organization faces potential risks, and nonprofit organizations are not immune to risk either. Legal liabilities, unforeseen financial crises, and the mismanagement of funds are just some of the risks that nonprofits can face.
Cloud-based risk assessment tools like LogicManager and compliance management software like RiskWatch can help you identify and avoid risks to ensure compliance. In the event of any incidents, case investigation software like Resolver offers incident tracking and mitigation strategies.
Final Thoughts on Financial Security Tools for Nonprofits
The above tools all play their part in ensuring greater financial security for nonprofits.
Fundraising platforms simplify the donation process. Financial management software streamlines financial accounting. Reporting tools and compliance or audit systems facilitate accountability and compliance. Risk management software safeguards assets by identifying potential risks.
Together, these tools will ensure continued financial stability. However, each nonprofit organization has unique needs. Research the platforms, software, and online tools available to you, and select the ones best suited to your nonprofit’s needs.