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Blog: 3 Strategies for Driving Changes in Accounting for Nonprofits

3 Strategies for Driving Changes in Accounting for Nonprofits

Being open to change can make a huge difference in the success of your nonprofit. Especially during periods of challenge and disruption, flexibility can help position organizations to not only survive, but come out even stronger on the other side. That said, helping to lead your organization through even a seemingly minor change can be a real challenge. 

In an ideal world, association and nonprofit organizations already embrace change and continuous improvement. But in actual practice, many organizations operate in a more reactive mode, preferring to change only when forced to.

In this post, we’ll look at three broad strategies in accounting for nonprofits that can help you be a more effective change agent.

Strategy #1. Be on the lookout for opportunity. If the idea of serving as a change agent at your organization seems overwhelming, it may be helpful to begin with a more narrow focus. Start by looking at your own job responsibilities, and consider what changes it would take for you to be more effective. Next, consider changes that could help individuals or teams across your department. Then, consider what types of change could facilitate the interdependencies between your department and others. 

One general area of change in accounting for nonprofits that holds a great deal of potential is in software and computing platforms. Even when a new technology has gained some acceptance in the broader marketplace organizations can be reluctant to make the change. For example, we had been counselling a client for some time to consider shifting its accounts payable (AP) function to a third-party, cloud-based vendor. But, leery of such a significant change, the client put the idea on a back burner — that is, until they suffered a cyberattack that left them without access to their servers for six frustrating weeks. Fortunately, they used the incident as an opportunity to take decisive action, and have now moved successfully to a cloud-based AP platform that delivers far greater flexibility and resilience.

Of course, if you were to spend all your time looking for ways to change or improve operations, that would become a distraction in itself. As an alternative, consider making it a regular part of your yearly work cycle — for example, as you’re preparing for your organization’s annual audit. That way, you can ensure that you’re keeping an eye out for ways to improve, but not spending all your time doing so.

Strategy #2. Be proactive about change. When it comes to change, every organization falls somewhere on a continuum. In our experience, the tone is generally set at the top of an organization, and can range all the way from welcoming continuous improvement and learning, to steadfastly avoiding change. This makes it important to have a realistic sense of how your association or nonprofit reacts to change. Before you spend a lot of time researching and advocating for some specific change, make sure you know whether you need permission from your executive director or executive board before doing so, and whose buy-in you need to get. And the more you can quantify the cost and benefits related to the change you’re proposing, the better equipped your organization’s leaders will be to make a sound decision.

To make a persuasive business case, doing a little focused research can go a long way. Finding out what industry experts say about a new technology or emerging practice can not only help you craft a more promising solution, but can also help assure the executive team that the idea is sound.

One of the most revealing types of research is to conduct a survey of the staff members who would be affected by a given change. Keep in mind that the more planning and communication you do for any survey process, the better your results will be. You need to communicate clearly who will be surveyed and what you plan to do with the results. Then, after the survey, make sure to close the feedback loop by letting respondents and other involved parties know about your preliminary findings, and where you expect to go next.

Strategy #3. Consult your resources.  If you’re contemplating even a modest change for your organization, the stakes can be considerable. A smart strategy is to seek third-party insight and advice before you act.

In the short term, an additional (and hopefully temporary) challenge many professionals face is the difficulty of engaging with peers and other experts during the global pandemic. Until recently, you may have relied on industry-focused meetings and conferences, or even bumping into colleagues in the hallway, to gather strategic insights and guidance. Not having these ways to connect with colleagues makes it all the more important to tap your own unofficial network. 

A great place to start is to speak with your organization’s auditors and outsourced accountants, and get their insights into how you could improve your accounting function. They not only already know a great deal about your organization, but also very likely have insights into how other association and nonprofit clients are dealing successfully with similar challenges. Other resources may include peers and colleagues you interact with through special interest groups offered by LinkedIn, ASAE, and other entities, as well as continuing education related to your field.

The next step is yours!

Envisioning and driving change in accounting for nonprofits is critical. The bottom line is that, just as your members’ and stakeholders’ industry continues to evolve, your organization needs to continually adapt in order to stay relevant to members. By keeping in mind these strategies for driving change, you can greatly increase the likelihood of success. Best of luck to you on your journey!

Wes Tomer, CPA, CGMA
Wes Tomer, CPA, CGMA
Wes is focused on leading Vault’s strategic efforts as the nation’s leading accounting and research firm for nonprofits and associations. He is committed to positioning Vault’s integrated specialized services to provide best in class solutions to our partners in the...
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