Nonprofit Software Adoption on the Rise, But Challenges Remain

Just as with any industry, the nonprofit sector is going through a substantial digital transformation. With data becoming more readily available and technology progressing at a rapid rate, nonprofits are turning to software solutions to better manage their operations and resources.

However, plenty of organizations are still hesitant to embrace digital solutions. For many, the cost and complexity of software implementation can be intimidating, not to mention the lack of training and technical support needed to successfully integrate it into their workflow.

Be that as it may, the number of nonprofits embracing software solutions is growing, as they recognize the need to streamline operations and improve their organization's overall efficiency. With the right tools, organizations can save time, money, and resources while increasing their impact.

This has been made evident through research conducted by NTEN, which has been tracking the use of software for nonprofits since 2012. The report, which was released earlier this month, demonstrates the rising importance and adoption of software in the nonprofit sector as organizations look to measure, manage and automate various key processes. On that note, let's take a look at some of the most common software solutions used by nonprofits today:

Donor Management Software

CRM software for nonprofits is one of the most popular software solutions used by nonprofits worldwide. This type of solution helps organizations manage their donor database, track contributions, and better understand giving patterns. CRM software solutions also give nonprofits the ability to maximize engagement with donors, effectively segmenting and targeting their audience, which is a tactic that is used to great effect in the commercial sector.

Online Fundraising Software

Thanks to the internet, nonprofits have access to a variety of online fundraising tools. These software solutions enable organizations to create and manage campaigns on their own websites, as well as through third-party platforms such as peer-to-peer networks and crowdfunding sites. Online fundraising software also enables nonprofits to measure the success of their campaigns and generate detailed reports.

Grant Management Systems

Grant management systems are a form of software that provide nonprofits with the ability to store and manage grant applications, contracts, and compliance. Most grant management systems offer a centralized repository where organizations can access all the documents associated with their grant-making processes and track progress in real-time.

Volunteer Management Software

Volunteer management software makes it easy for nonprofits to manage their volunteer workforce. This type of software solution can be used to track volunteer hours, assign tasks and roles, as well as create meaningful engagement opportunities with volunteers. On top of that, volunteer management software also helps organizations ensure compliance with any laws and regulations pertaining to working with volunteers.

Accounting Software

Accounting software is another essential tool for any nonprofit organization. This type of software helps organizations track their financials, manage budgets, and ensure accurate record-keeping for tax purposes. Accounting software solutions can also be used to generate reports that can help nonprofits gain better insights into their financial performance and can even be used to apply for grants and donations.

Human Resources Software

Despite their mission-driven nature, nonprofits are still businesses and as such, need to manage their workforce in the same way any other organization would. This is where human resources (HR) software solutions come in. HR software is used to streamline processes such as onboarding, payroll, and performance management for nonprofits. By having access to this type of software, nonprofits can save time and resources while ensuring that their employees are taken care of.

Payment Gateways

The nonprofit payment gateway software market is expected to grow significantly over the coming years as donations and other payments become more digital. As such, payment gateways are a necessary component for any organization that wants to accept donations, process membership fees, and other payments online. Payment gateway software is also a good way for nonprofits to ensure that payments are secure and compliant with any laws or regulations.

Social Media Marketing/Management Software

Social media is a powerful tool that nonprofits can use to broadcast their mission and engage with their stakeholders. To manage this growing presence, many organizations are turning to social media marketing/management software solutions. This type of software helps nonprofits plan, execute, and monitor their social media campaigns in order to maximize their reach, build relationships with their audiences, and drive more donations.

Key challenges with software implementation for nonprofits

While the adoption of software solutions has been steadily rising in the nonprofit sector, there are still challenges to be overcome. Here are some of the leading challenges that NTEN's report identified:

Limited resources: Resources are the biggest obstacle that nonprofits face when it comes to implementing technological change. 75% revealed that financial concerns are an issue, 82% stated staff time is a challenge, and 60% said that skills and comprehension were also a problem.

Failure to measure ROI: Many nonprofits struggle to measure the return on investment of their software solutions due to a lack of proper tracking. In fact, only 6% of nonprofits measure software ROI more than once per year, with 46% not measuring it at all.

Top-heavy decision-making: Many organizations lack a comprehensive implementation process and instead rely on the decisions of only one or two people. This can lead to software solutions that don't meet the organization's needs or that are not well-suited for the larger team. For example, 66% of organizations stated that only the CEO has the final say in decisions about software selection.

The need for change management in the non-profit sector

Software adoption is on the rise in the nonprofit sector, and organizations need to be mindful of the challenges that come with implementing these tools. One way for nonprofits to ensure successful implementation is to invest in change management.

Change management involves developing and executing a plan that facilitates the adoption of new software solutions, ensuring that staff is trained and that the organization has good processes for tracking and measuring ROI. This is especially important for nonprofits as they often have limited resources and need to ensure that their software solutions are the right fit for their organization.

By focusing on quality over quantity, understanding the challenges associated with software adoption, and investing in change management, nonprofits can ensure that their technology investments are successful and beneficial to their organization.