Technology & Innovation

Key findings from the 2024 Nonprofit Technology Trends Survey

Discover how nonprofit leaders are leveraging technology to enhance impact and identify opportunities in an increasingly digital world.

Nonprofit organizations are in a time of rapid change in all aspects of operations, from compliance and reporting requirements to donor and fundraising trends.

Nonprofit leaders are leveraging technology solutions to enhance impact and identify opportunities in an increasingly digital world.

The 2024 Nonprofit Technology Trends Survey asks nonprofit finance leaders about what trends they see in the sector and how they are responding to the changing nonprofit landscape related to technology.

The survey sought to uncover insights into how nonprofits use technology to achieve mission-driven goals and create mission impact.

Over 300 nonprofit leaders—more than half from the C-suite—participated in the 2024 survey.

Nine out of 10 respondents were leaders from small to mid-size nonprofit organizations in the US, with annual revenue of less than $24M.

This aligns with participants from prior year surveys, enabling good year-over-year comparisons of results.

The survey captures participation from a wide variety of nonprofit subsectors, with the top five being:

  • Human services (21%)
  • Education (17%)
  • Community development (16%)
  • Arts and culture (14%)
  • Healthcare (13%)

Economic uncertainty tops the list of external challenges

Although 73% of organizations reported either growing or flat revenues, according to the 2024 survey, when asked to identify the biggest external challenges to their organizations, nonprofit leaders selected economic uncertainty.

This was closely followed by inflation and competition for funding. Staffing shortages and increased demand for services were lower on the list, rounding out the top five.

2024 Sage Nonprofit Technology Trends Report

Economic uncertainty adds funding pressure for the nonprofit sector.

Organizations mentioned having to search for new funding sources as government Covid relief funding has come to an end.

Others highlighted the possibility of economic headwinds causing foundations to reduce their level of funding commitment.

Whatever may come, nonprofit leaders have to stay ready to respond and adapt quickly to changing conditions. About one in five respondents anticipate investing in additional automation to help their organization compensate for economic uncertainty.

Internal challenges have remained consistent for several years

When asked to identify their top internal challenges with accounting and finance workflows and technology, nonprofit leaders again identified the same five top challenges they selected in the 2022 and 2023 surveys.

The challenges have moved up and down the list in terms of their ranking, but the grouping has remained remarkably consistent.

2024 Sage Nonprofit Technology Trends Report

The five challenges identified by survey respondents present two main themes. Some challenges are simply due to inefficient manual processes, such as reporting, budgeting and planning, and manual reporting.

Other challenges represent the need for more efficient, capable technology, to overcome lacking areas such as real-time visibility, outcome metrics, system integration, and process automation.

How nonprofits are using technology

Asked about what types of technology nonprofit finance leaders use to support growth and efficient operations, survey respondents said their most used technology solutions were:

  • Financial management and accounting software (85%)
  • Donor management or CRM solution (64%)
  • Budgeting and planning tool (28%)

These three answers, in this order, have been consistent for several years. What has changed significantly is the percentage of nonprofits using a budgeting and planning software—increasing from 18% use in 2022 to 28% use today.

2024 Sage Nonprofit Technology Trends Report

Similarly, it was not a surprise to see the ability to automate financial reporting being the most important priority in nonprofit accounting software functionality.

However, 46% of leaders highlighted the ability of a financial management solution to produce outcome metrics, and this was up from 35% in 2022.

Three key takeaways from the 2024 survey

There are many important insights to glean in the 2024 Nonprofit Technology Trends Report. Here are three top takeaways revealed by the survey data:

1. Entry-level accounting software cannot rise to the needs of nonprofit challenges—especially during economic instability.

Nonprofits in our survey reported concerns about organizational efficiency and the burden of time-consuming, manual reporting. Entry-level accounting solutions struggle to meet the complex needs of growing, more complex nonprofit organizations.

A modern, cloud-based accounting and financial management solution simplifies compliance reporting and provides automated workflows for complex tasks like fund accounting, multi-entity consolidations, and revenue recognition.

Built-in automation and workflows leave nonprofit finance teams with more time to focus on navigating through operational challenges and an evolving funding landscape.

2. Tracking outcome metrics is a critical component of telling your story and attracting donors

Nonprofits face high demand for services and strong competition for funding.

That’s why it is important to:

  • Cultivate relationships with existing donors
  • Focus on impactful storytelling in your fundraising
  • Develop a strong online presence with a well-designed website and active social media presence.

Outcome metrics are a powerful tool for demonstrating accountability and transparency about your financial results and program results.

They also add a lot to your organization’s mission story.

To tell your best story, it helps to have a financial management system that tracks outcome metrics using both your financial data and results from other business systems.

3. The need to budget and plan for the future has never been greater

“Budgeting and planning” ranked in the top five internal challenges the 2024 survey.

In the early years at smaller nonprofit organizations, budgets often can be managed by using spreadsheets.

But as programs expand, staff grows, and geopolitical or economic events require rapid shifts in direction, budgeting gets more complex and more difficult to keep up with by using spreadsheets.

As a result, we are seeing a steady increase in the number of respondents whose organizations leverage modern budgeting and planning software to help ensure financial stability, manage risk, and improve real-time collaboration.

Final thoughts

Nonprofit finance leaders continue to face internal challenges around operational inefficiency and lack of automation.

The 2024 survey shows, they’re also concerned about the external challenge of economic uncertainty and its potential impact on sources of funding.

The Nonprofit Technology Trends Report revealed more nonprofits are adopting budgeting and planning automation than in prior years.

Respondents also indicate more need for a nonprofit financial management solution with functionality for calculating outcome metrics, so they can improve their mission storytelling for funders.

Read the complete 2024 Nonprofit Technology Trends Report to discover additional trends from nonprofit finance leaders, including insights about revenue trends and funding sources.

2024 Nonprofit Technology Trends

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