Monday, June 17, 2024
HomeBusinessFive ways improving financial systems lead to charitable growth

Five ways improving financial systems lead to charitable growth

If there is one thing the recent controversy surrounding the filing of paperwork Prince Harry’s foundation Archewell can teach us is that having a robust reporting and funds administration system is absolutely essential. Charities and foundations are subject to particularly stringent controls. But on top of the good governance this encourages are a number of other even more important benefits that could spell real success for forward thinking and compliant non profits.

The following areas highlight the additional benefits of running a fully compliant charitable organization, which in turn could lead to greater efficiencies and higher revenue which in turn will enhance the experiences of the beneficiaries.

Forensic donation tracking and analysis

A competent charity will be able to tell you exactly how its funding is allocated between different appeals, administration and fundraising activities. This demonstrates a candid and creditable desire to run transparent processes and systems that inspire trust – trust from the donors themselves, trust from regulatory bodies, and trust from the beneficiaries.

A charity should be happy to be open to scrutiny at anytime, and implementing a bona fide fund administration system will take care of this.

Improved financial planning and resource allocation

An unintended consequence of better financial management is the ability to better plan future projects. While not everything outside of an organisation can be controlled – and often these organisations’ very existence is founded on them dealing with the unexpected – what they can control is the trajectory of funds and their allocation according to need.

This places the charity in a much stronger position to pivot its help when and where it is needed, rather than scrabbling to find the necessary resources, maximizing its overall impact both in terms of financial implications, and on the overall wellbeing of its beneficiaries.

Nurturing stronger donor relations

Any charitable organisation is the sum of its donors. Too often good relations can get mired in the higher echelons, with time and consideration spent on a few larger individual donors. However, funding amounts are subject to the compound effect, and over time those donors who make small, regular contributions can soon grow in power and influence.

Transparency in fund administration will give you the knowledge and insight required to nurture donor relations at every level. The data that you can glean from intelligent systems can allow you to create highly responsive communications campaigns aimed at developing donor relationships on a deeper level, which in turn will help to generate a larger income from an existing source.

Equally, your donors will feel as though they are appreciated that little bit more. That appreciation will cement their trust and faith in your organisation, retaining their commitment to you as demonstrated by higher retention rates and increased donation levels.

A leaner, meaner machine

How many of you have gone through a bank statement and questioned subscriptions that seem to have popped up out of nowhere. Indeed, smart technology has made it so easy to click and subscribe to everything from newspapers to a monthly delivery of dog food.

This should not happen in charity accounting. Every single transaction needs to be scrutinized and justified as part of the overall administrative process.

The upshot of this approach is that your non-profit becomes a truly lean and mean machine, operating with minimal fat. As a result, a greater percentage of the resources is used to benefit those communities it is trying to help, rather than being wasted in unnecessary expenses.

Improved forward planning

Ultimately, the confidence and belief you will have generated within your organisation put you in a much stronger position to plan more effectively or the future. While many non-profits are there to support the vulnerable, many also want to encourage a forward thinking direction based on empowerment – encouraging beneficiaries to take back control and rebuild their own lives. Financial stability within an organisation enables them to plan accordingly



Please enter your comment!
Please enter your name here

Most Popular

Recent Comments