As the recent uproar surrounding the Central Asia Institutes’s Greg Mortenson shows, good ideas and heartfelt passion alone aren’t enough to ensure success in the nonprofit realm. Like for-profit organizations, nonprofits require careful financial and resource management. While many nonprofits do follow a best practices approach to management, others fail to use all the tools at their disposal. When donors are skittish in the wake of a scandal, like many are now, the key to maintaining donor and grantmaker confidence is accountability.
Nonprofit organizations can take a few steps now to increase transparency. One easy step is to find the criteria used by websites that rate nonprofits. A second is self-evaluation that enables nonprofits to identify where they can close gaps to improve performance and fiscal management. Many organizations and foundations, as well as websites, provide guidance to help nonprofits achieve results in strategic planning and implementation.
Nonprofits can improve their performance most, however, by adopting advanced software. As a 2010 survey from the Nonprofit Technology Network shows, far too many organizations lag behind the technology curve. While cost was often a deterrent to software adoption in the past, the increasing number of software-as-a-service products offer access to feature-rich solutions without the cost of deploying on-premise software. These products are Web-based and available for a monthly user fee, enabling nonprofits to better anticipate and control technology expenses.
Given that nonprofit organizations have broad and diverse funding sources, appropriate measuring, tracking, and reporting benchmarks are critical. And clearly, ongoing accountability measures are necessary to help organizations avoid finding themselves in Mortenson’s shoes. With smart and transparent management and the right back-end solutions, nonprofits can foster lasting relationships with foundations and other donors, and the people they serve.