The pandemic left no sector untouched, and that includes non-profit organisations (NPOs).
From multiple lockdowns to on-again, off-again restrictions, it’s been a rocky road for organisations providing essential services to millions of people across the UK.
The non-profit sector has been left £12.4bn worse off for the year as a direct result of the pandemic.
With traditional fundraising activities screeching to a halt, even the most established, financially secure charities have had to dig deep into their reserves or lay off staff just to stay afloat.
Unemployment, financial instability, threats of eviction, food poverty, domestic violence. These are just a few of the social issues intensified by coronavirus and taking a toll on mental health.
More people than ever are looking to NPOs for crucial—sometimes life-saving—support.
To continue providing services to those who need them most, NPOs need to make every pound and penny count. And that means finding new ways to work smarter and make sure resources are going where they need to.
But how can you balance that increased demand with such a big drop in funding?
While there’s no magic cure for this kind of financial frustration, there are things you can do to make the most of the budget you do have and save another prized resource—time—while you’re at it.
In this article, we highlight three things you can try. Here’s what we cover:
1. Automate your admin
When it comes to improving financial literacy, the biggest hurdle NPOs see—smaller organisations in particular—is a lack of capacity.
There’s simply not enough time or resource to up the ante on your team’s finance management.
That’s where automation comes in.
Using the latest accounting software, you can automate a lot of your most time-consuming finance management processes, freeing up resources and taking the most tedious tasks away from skilled employees, which they’ll thank you for.
Automating your most repetitive tasks as part of a wider digital transformation plan also allows you to spend more time planning your budgets and working on your organisation’s campaigns.
Crucially, it gives your finance function the capacity they need to adopt more streamlined processes, deliver more insightful reports, and sharpen their skill sets.
So, while this might seem like a small change at first glance, the impact can be huge.
Refocusing your time could transform the way you work, from fundraising and service delivery to all things back office.
2. Revolutionise your reporting
Impact reporting is a major problem area for the non-profit sector.
If you can’t report on your financial performance and overall objectives in your reports, you can’t get a clear view of what you’re spending or how you’re spending it.
This could also put a spanner in the works if you try to build a sustainable future for your NPO on skewed reporting.
With the right software on your side, you won’t just know how much money you need—you’ll get a clear view of what’s being wasted and where.
It allows you to set (and stick to) a realistic budget that actually works for your organisation.
The right software will also give you insights into which campaigns work best pound-for-pound, and which ones aren’t worth the time or money. This allows you to stop spending money in those areas and reinvest that cash in other, more impactful campaigns.
Remember, if you can’t measure it, you can’t manage it.
Better, more detailed bookkeeping means more financial data. More data can lead to better decision-making and better planning, which creates sustainable growth for your organisation.
A major part of that sustainability involves doing more than just looking at what you can spend this month or this year.
It’s about having the information you need to plan for the unplanned and build a reserve of funds.
You never know when you might need to pivot your organisation later down the line, as we’ve seen throughout the pandemic.
3. Don’t be afraid of change
One of the most difficult hurdles to overcome in any organisation is the fear of change.
With limited funding available, NPOs tend to be more sensitive to risk than for-profits, but it’s worth remembering that digital transformation isn’t the radical undertaking it once was. It’s become the norm.
Think of it this way.
Digitalising finance management aligns with the guiding principles of good charity leadership, particularly the commitment to delivering quality services exactly where and when people need them.
That means cutting waste, minimising costs, and making the most of your time and money.
Having a more sustainable financial model—and software to back it up—won’t dispel all challenges the world throws at you.
But it will empower you to navigate those choppy waters and come through stronger on the other side, ready to serve the communities you operate in better than ever before.
Recommended Next Read
Making Tax Digital for Income Tax: How accountants can prepare landlord clients
Subscribe to the Sage Advice newsletter
Join more than 500,000 UK readers and get the best business admin strategies and tactics, as well as actionable advice to help your company thrive, in your inbox every month.