The Critical Role Finance Plays in Nonprofit Growth Strategies

Is your nonprofit organization preparing for growth this year? This could entail expanding or adding programs, expand your donor base, reaching new clients, setting expanded impact goals, or strengthening internal operations. Whatever nonprofit growth strategies your organization pursues, there will be important roles for the finance team during planning and execution.

Your organization must be ready for growth and take intentional steps to pursue it, such as becoming as efficient as possible internally to free up money and people for new pursuits.

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In this article, we will review six nonprofit growth strategies and explore how the finance team can support each strategy. We will also share how using the Sage Intacct cloud financial management system helps nonprofits pursue each of these growth strategies successfully.

Growth strategy #1: Launch new programs

Launching new programs is a tried-and-tested way to expand mission impact. The tricky part is knowing what programs to launch and also recognizing when it is time to either revamp or shut down a program that is not delivering expected outcomes. These decisions should not be made by gut instinct, but rather fueled by a steady supply of reliable real-time data about expenses and outcomes.

World Learning took advantage of automated financial reporting and dashboards in Sage Intacct, as well as the system’s multi-dimensional database structure and easy integration with other business processes such as time and expense reporting. The combination of streamlined business processes and real-time insight allows the organization to quickly launch new projects and shut down underperforming ones.

“With Sage Intacct, we can compare costs for the fall, spring, and summer terms and track how each semester is going or monitor individual projects to make mission-critical decisions about program spending on a daily basis. We know when to close or extend a project and can see early on if we’ll need to ask donors for more funds or for a revision of the project’s scope.”

~ Kote Lomidze, Chief Financial and Administrative Officer, World Learning

Growth strategy #2: Increase donor engagement

Relationships are the key to better fundraising. Highly engaged donors are willing to contribute more, so nonprofits need to set up a great donor experience and consistent donor cultivation cycle. Personalized communications lay a foundation of touchpoints with donors. Sending out regular newsletters or special announcements that celebrate your organization’s mission success can be a great way to keep donors engaged.

The finance team can aid donor engagement in a number of ways. First, it can make sure the organization is aware of donor retention levels and average donation amount. Finance can identify the largest donors for special engagement planning. Finally, a good financial management system will provide the proof your organization needs to maintain trust and credibility with donors. It will track financial performance, so you can demonstrate excellent stewardship and transparency. It will also track outcome metrics, so you can demonstrate your impact. Weave both types of data and metrics into the mission story you tell donors.

PAWS Chicago is able to show donors exactly what their contributions achieve in the lives of animals. They use Sage Intacct to track and report on a variety of outcome metrics, including animals saved, spays and neuters, volunteer hours, and more. They display the information on their website and also have it available to use in donor communications.

“This new insight means that we can effortlessly report more detailed, accurate information back to our donors. And since we know what’s behind our numbers, we can offer more hands-on financial guidance to individual programs and better demonstrate the value we’re delivering to the broader community.”

~ Alisa Brill, CFO, PAWS Chicago

Growth strategy #3: Win new grants

If your organization relies on grant funding, applying for and winning new grants, in addition to earning renewals of existing grants, is a critical aspect of growth. Only excellent visibility into your stewardship will establish and maintain the trust required by grantors. Demonstrating that you have earned grant renewals can help you step your way up into new and larger grants in the future.

Vitamin Angels turned to Sage Intacct to help the organization improve their management of restricted funds. By fully automating AP processes, including paperless approvals, the organization was able to improve AP efficiency by 60%. They moved from cumbersome grant tracking spreadsheets to real-time tracking and reporting of costs. As a result, the organization anticipates increasing restricted revenue by $14 million over three years.

“Using custom dimensions in Sage Intacct to track costs, we identified $200,000 in logistical savings, which enabled us to provide essential vitamins and minerals to an additional 800,000 undernourished pregnant women and children.”

~ Bonnie Forssell, CFO, Vitamin Angels

Growth strategy #4: Expand into more communities

Nonprofits can also grow by delivering the same services into new communities. With this growth strategy, the challenge is making sure your financial situation supports the ability to expand and that you have the ability to track the differences in outcomes, revenue, and expenses in each new community (entity).

Sandals Church already had nine campuses when the leadership team decided they needed a better financial management solution. The rapidly growing church implemented Sage Intacct to help it pursue its growth goal of opening new campuses. As a result, finance efficiency improved by 45% while leaders enjoyed real-time financial insights across all campuses and ministries. Sage Intacct supported double-digit gains in tithing and attendance, and today the church has 13 campuses plus a large community of online worshipers.

“The new insights we have with Sage Intacct have been extremely valuable in supporting our growth and our mission.”

~ Amber Cheong, Director of Finance, Sandals Church

Growth strategy #5: Improve staff productivity

Improving efficiency and productivity is a proven nonprofit growth strategy as it puts the pieces in place to do more with existing funding and resources. When you automate routine work, you free up staff time to upskill and stretch into more challenging work. This enables you to expand mission impact by giving your organization time to scale without having to add more new staff members.

When you can operate more efficiently while keeping your staffing needs lean, the savings achieved can be used to provide services to more people. Room to Read improved productivity by 25% worldwide with Sage Intacct by reducing the work needed to close the books across 25 entities and 19 currencies through multi-entity and multi-currency consolidations. The roughly $300,000 in annual labor savings enabled the organization to reach an additional 100,000 children per year with their literacy programs.

“Thanks to Sage Intacct dimensions, we can now drill as deep as we need to, even down to the costs of a single library in a certain village. And the process is more efficient, allowing us to meet any deadline we commit to with confidence and provide more strategic insights when creating donor proposals and reports.”

~ Shari Freedman, CFO, Room to Read

Growth strategy #6: Better equip leaders

Leaders set the goals and communicate your mission both inside and outside the organization. Without strong, inspiring, capable leadership, most nonprofits will struggle to execute on mission impact. Even a well-funded nonprofit with strong assets will struggle to grow if leaders do not enjoy access to timely, accurate information. Without insight, leaders cannot determine the best path forward.

Sage Intacct directly led to nearly $7 million in value for the Hopi Tribe Economic Development Corporation by helping the organization make timely decisions that improved cash flow and increased gross margins. Managers, executives, and the board can all access real-time financial metrics and statistical insights as well as budget forecasting models. With the ability to trust the accuracy of financial statements and forecasts, leadership has been able to make bold decisions leading to good growth for the organization.

“With Sage Intacct, our general managers and department heads hold greater accountability, because management can quickly pinpoint areas of financial concern and have accurate information with which to make better business decisions. As a result, three of our struggling entities moved into the black, our overall gross margins improved by 20%, cash flow increased by nearly a half a million dollars, and our real estate asset values grew by over $5 million.”

~ Larry Chank, CFO, Hopi Tribe Economic Development Corporation

Build a strong foundation for growth

As you can see, there are many paths to growth and the finance team must be a key partner to leadership across all nonprofit growth strategies. Whether you pursue new donors, new grants, new programs, or expansions of existing projects, having the right financial management system will remove barriers and speed your journey. Not only will a financial management solution like Sage Intacct help you more efficiently utilize staff and financial resources, it will also provide the real-time visibility and data you need to drive strategic decisions. To learn more, download the e-book, The Rise of the Data-Driven Nonprofit Finance Leader.