Using "Cookies"

We use cookies to make our websites reliable and secure and provide you with an enhanced user experience. By continuing to use this site, you confirm that you agree to the use of "cookies". More information can be found by visiting Cookie policy.

I understand

PUBLISHED ON - 04.12.2022.

5 Ways Automating Your Nonprofit’s Financial Planning Boosts Your Entire Organization

Strategic financial planning is essential to the success and longevity of your organization.

And since your financial planning strategy impacts the activities of every department (not just accounting), it’s critical to get it 100% right.

The problem is, you can’t get it 100% right if you rely on manual data entry to inform your planning strategy. Not even close. And all it takes is one manual mess up for a domino effect of harmful consequences to rickroll every level of your nonprofit. This is where automation comes in.

When Manual Financial Planning Goes Wrong: The Domino Effect of a Small Mistake

Let’s say a big grant just came through. Your team has spent months planning the projects it was designated for, and now it’s time to distribute the funds accordingly and start work. So you allocate the resources and let the project managers take over, as you set your sights on an upcoming program.

And then the problems start. A small but costly accounting error tipped the budget balance incorrectly, and now the biggest project of the quarter doesn’t have enough money to even break ground. A ripple effect ensues: the program directors can’t hire volunteer coordinators or other key paid staff, external relations managers don’t know what to tell donors, other projects are at a standstill, and project managers don’t have anything to manage.

By the time a solution trickles down, the damage has been done.

5 Ways Automated Financial Planning Benefits Your Entire Organization

When nonprofits of scale build their strategic financial plans on a sound foundation of automation and data analysis, the difference is dramatic. Sure, it makes your accountants’ lives easier. But automation does so much more than that: it makes the scenario we just covered nearly impossible, and keeps every department on budget, on task, and on time. The algorithms in automation solutions catch and react to mistakes and changes instantly – and allow your organization to focus on making an impact instead of damage control.

So let’s take a look at 5 key ways automated financial planning can boost your entire organization’s performance.

An external relations manager presenting an annual report to donors.
Trustworthy data makes transparent, fruitful donor relationships possible.

1. Create More Transparent Donor Reports (and Improve Donor Relationships)

If your financial plan is off the mark, your donor reports will be, too.

But unfortunately, that tends to be the case when large organizations rely on manual planning processes. Throughout the year, all the information you need to create your donor reports gets scattered across different spreadsheets, departments, tools, and people. Not to mention it's potentially incorrect.

According to one study, researcher Raymond Panko estimated the error rate of manual data entry to be between 18% to 40% – and that’s not exactly something you can rely on if you’re a large organization with several different funding sources.

The solution is simple: powerful automation tools can handle the volumes of data humans simply cannot. At the end of the day, automation improves data accuracy, transparency, and enables prompt, agile donor reporting.

A grant proposal with colorful infographics.
According to Standford’s Robert Horn, visuals make writing 70% more effective.

2. Write Powerful Grant Proposals (and Secure More Funding)

Granular information + data visualization + more time = more compelling grant proposals.

When you’re able to visualize historical data to see how much you’ve asked for in the past and what you were able to accomplish with that amount, you’re able to write a far more illustrative, persuasive grant proposal than if you were basing your justifications on spreadsheets and raw data alone.

According to research conducted by Robert Horn at Stanford University and the Wharton School of Business, written information is up to 70% more effective when combined with visuals. Automation tools allow you to create visualizations and infographics of the data you’re working with, which you can easily download and integrate into your next grant proposal to strengthen your appeal.

Then, once you’ve secured funding comes the next most difficult part…

A program manager looking at data visualizations.
Better visibility means better decisions.

3. Plan Ahead with More Accurate Budgeting and Forecasting Capabilities

As organizations grow and their funding streams become more complex, managing grants and allocating them properly becomes much more difficult to do by hand. Data is error-riddled, gets lost, deleted, or inaccessible by the team members who need it.

First and foremost, financial planning automation ensures the data your nonprofit bases its decisions on is correct, organized, and accessible. What’s more, the level of usability built into an automation solution gives your nonprofit a whole suite of advanced capabilities:

  • Create highly granular budgets based on data from different sources
  • Get clarity on future funding needs
  • Keep track of restricted and non-restricted donor assets
  • Access your full funding allocation history
  • Get visibility into grant terms and conditions
  • Allocate direct and indirect costs quickly and confidently

4. Promptly React to Unexpected Changes and Adversity

Of course, everything would be easier if your strategic plan was a one-and-done task – no curveballs, no changes. But the reality is that there will always be external changes that impact what your organization can do. The real test is whether your systems and strategy are nimble enough to keep up.

Automation allows you to avoid budget shortfalls when unexpected events do happen – anything from unplanned expenses to natural disasters, pandemics, and beyond. To stay agile in the face of dynamic external circumstances, nonprofit financial automation software can conduct instantaneous fund reallocations from one project to another as funding gaps are identified, keeping projects running smoothly during hard times.

Foodbank volunteers boxing cans during the pandemic.
Being able to react to catastrophes is critical to nonprofit success.

5. Improve Organizational Performance – Both In-House and in Your Field

Not only do nonprofits have different needs than for-profit businesses, but their needs vary from field to field and organization to organization. A nonprofit that deals with healthcare programs worldwide will have very different financial needs (and by extension, automation needs) than a nonprofit that deals with literacy programs in one region.

There is no one-size-fits-all tool – and that’s why the customizability level is one of the most important things to look for in your automation solution. The right one is adjustable enough to fit your organizational structure and flexible enough to integrate into any software your organization already uses – like ERP, CRM, and HR systems.

That might look like each level of your organization receiving custom reports at periodic intervals with every piece of information they’re responsible for: from the CEO, CTO, CFO, department heads, program directors, and project managers. Or, it might look like a database that organizes contracts, grant restrictions, project finances, or permissions. The possibilities are endless.

Doctor and nonprofit executive shaking hands.
It doesn’t matter what field you’re in – your solution needs to match it.

Automate Your Planning with PI’s Nonprofit Financial Planning Solution

A sound, strategic financial plan is the blueprint for an effective and sustainable nonprofit organization. Don’t leave yours to chance – invest in financial planning automation and focus on what’s really important: your mission.

In collaboration with IBM and our nonprofit partners, we created an automation solution tailored specifically to the unique needs of nonprofits. The financial planning solution isn’t only useful for your finance department, but can benefit your overall organization in 5 key ways:

  • Donor reporting
  • Grant writing
  • Decision-making
  • Reactions to change
  • Performance in the field

Curious about how implementing it can help improve your operations? Contact us and one of our experts will give you a demo of the solution your nonprofit can rely on.

Related Posts

Would You Like to Know More?

Talk to our experts

Talk to Expert

Privacy Agreement*

We are sending your e-mail!


Your message is sent. We will get back to you, as soon as possible!


Something is wrong. Please get in touch via e-mail: