Introduction to ERP for Nonprofits

While nonprofit financials provide unique challenges, they can be solved with the right ERP system. In this article, we will discuss what we discovered from working with nonprofit organizations, with a look at how to find the right ERP for your organization.

How to Choose the Right ERP for Your Nonprofit

With so many choices, it may seem difficult to select a software package that will work well for your nonprofit. Here are a few tips to help charitable organizations find the right ERP for their requirements.

What is Your Mission?

To understand what you will need from an ERP, be sure to fully understand your organization’s mission. What impact are you trying to make in the world and what risks are you going to face to do it? Who are the people that you help and where are they located? What types of services do you offer? If you are working within a particular region, will that change in the future? Do you intend to expand into other charitable areas?

Mapping out your processes in detail can reveal organizational insights that can make all the difference later on in your ERP selection. A charitable organization that focuses on building homes for the underprivileged would need project management, while a fundraising organization would need sophisticated functionality for donor maintenance or grants management. Nonprofits with international missions will need to examine the complexity of their human resources in order to find an appropriate HCM solution.

What is Your Goal for the Software?

There is an inherent hierarchy to organizational information and operations, where certain facts and figures will prove to be more important than others. Once you have the complete picture of how your personnel and processes function and interact, you can outline software requirements with greater precision. Some nonprofits need a CRM for donor management — others don’t. This is all a matter of getting the functionality you need while making sure you aren’t paying for features you don’t need.

Benefits and Drawbacks of Application Size

There are many applications in the nonprofit market that offer innovative toolsets and elaborate interfaces that can monitor the most minute details of your operations. But when you hear “innovative” and “elaborate,” we can also add the word, “expensive.” Sometimes the better choice means sacrificing some of the bells and whistles in order to obtain the core functionality at a more amenable price. Every scenario is different, of course, but be sure to evaluate the actual cost of ownership of the software against the true benefits to your organization.

With that said, don’t think about a software purchase as a dollar-for-dollar exchange between your mission and the software. Ask questions such as, will the software empower your people to offer more assistance? Will it help you interact with your donors in a whole new way and encourage them to increase donations? If you feel like the software is taking money out of your program, you don’t have the right ERP.

Pick the Right Partner

While you don’t want to overpay for more than you need, you also don’t want to solely evaluate the cheapest products on the smallest platforms. Choose a vendor that will be around in the future to offer support and upgrades as your organization grows.

This may mean looking at how many employees they have compared to how many employees you have, or checking to be sure that the personalities match your organization — as you’re hopefully going to be working with your new vendor for many years to come. Can you see yourself with them for the next five to ten years? Does it feel like a good working relationship? Perhaps, most importantly, do you feel that the vendor really cares about the nonprofits they work for?

Our Review of Nonprofit ERP Vendors

Nonprofits have their own unique issues, which can make choosing the right ERP software a challenge. Here we’ll discuss what products are available for nonprofits and what steps to take to ensure you select the right product and the right vendor.

Blackbaud

The nonprofit ERP software conversation often begins with Blackbaud. Seen as the industry standard for quite some time, a widely reported data breach in May 2020 changed perceptions of the platform’s reliability. But the company does still offer many solutions for nonprofits including fundraising, accounting, grants and more.

ERP Advisors Group recently conducted an analysis of upgrading from the Blackbaud legacy application, Raiser’s Edge 7, to NXT, and we found that it was still a good solution for some nonprofits. For anyone planning to upgrade to Blackbaud, we recommend figuring out what your needs are first. Then present those to Blackbaud and ask to be shown, not just told, what products or solutions they offer to resolve those issues.

Sage Intacct

The new standard for nonprofit ERPs might just be Sage Intacct. As of this writing, it is the #1 rated accounting software for nonprofits according to user reviews. The cloud-based platform offers fantastic functionality as a cost-effective solution for charitable organizations, including top-tier grant management and automated nonprofit revenue recognition. The focus on customer satisfaction is a competitive advantage for Sage that can be a difference-maker in any final selection of ERP software.

Workday Adaptive Planning

Our for-profit clients like Workday Adaptive Planning for its rich financial planning toolset, which is why we have also recommended it to our nonprofit clients. As a Gartner Magic Quadrant Leader in Cloud FP&A, Workday offers robust functionality for financial planning, budgeting, and forecasting that can help nonprofits make better decisions about how and where to deploy their funds.

NetSuite

We have evaluated NetSuite for many of our clients, and we have learned that it can be a good fit for nonprofit organizations. NetSuite tends to be best suited for midsize organizations. As long as the cost of the software and the implementation fits the budget, NetSuite is excellent for its scalability and functionality, as well as its multinational and multi-currency capabilities.

Quickbooks

Some of our clients depend on Quickbooks for their accounting needs, and we have seen that it can work well in a nonprofit environment. It can help when an organization needs to track expenses against funds from a particular grant, and it can be a good starting point that an organization can use until it is ready to upgrade to a more sophisticated financial platform.

Salesforce

Salesforce offers a robust suite of solutions for nonprofits that includes fundraising, grants management, and marketing targeted at lifelong supporters, along with a separate pricing guide that is only available to NPOs. One of the many great things about Salesforce is that it can be expanded using AppExchange bolt-ons, such as TaskRay for project management and workflow automation. This makes the Salesforce ecosystem a wise choice for certain charitable organizations.

Other Nonprofit ERP Products

In addition to the above, there are other products that we have found helpful for nonprofits, including Fluxx, Foundant, Classy, and Stellar Technologies. There are applications that offer an all-in-one solution, while others specialize in functionality that is specific to fundraising or foundations.

Customizing a Nonprofit ERP

If you are unable to find an ERP that meets your specific needs, customization may be an option. While not all products are customizable, many are, and it is something that can be discussed with the vendor. If you are working with a consultant, they can work with the vendor to configure the product according to your requirements and ensure that the customizations are future-proofed against expected upgrades.

In Closing

At ERP Advisors Group, we love working with our nonprofit clients, and we consider it a privilege to help them find the right ERP solution to better enable their staff, who in turn help others. We salute and support all those who are dedicated to making the world a better place, and we are here to help you in any way we can to find software solutions to make the job a little easier.

Visit www.erpadvisorsgroup.com for more articles and information about ERP selection and implementation.