Looking to improve your nonprofit operations in 2023? Implementing new software can help - but only if you avoid some common pitfalls. Read on to learn the top 10 nonprofit software mistakes and how your organization can steer clear of them.
What to Expect
In this blog post, we'll cover key mistakes nonprofits make when selecting and implementing software across five critical areas:
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Customer Relationship Management (CRM)
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Donation Management
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Volunteer Management
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Project Management
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Financial Management
For each area, we'll overview typical errors and provide tips to avoid or correct them. We'll also point out red flags to watch for when evaluating new software.
Whether you're exploring options or gearing up for a software rollout, this guide will help you choose and implement solutions tailored for nonprofit success. Let's get started!
Customer Relationship Management
CRM software helps nonprofits manage constituent data, relationships, and outreach. It's essential for fundraising, donor retention, and communication.
Mistake #1: Choosing software without constituent management features
Many CRMs lack tools purpose-built for nonprofits, like donation tracking and volunteer management. Opt for solutions with constituent-focused features like:
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Donor profiles with giving history
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Email marketing and segmentation
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Event management and registration
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Integrations with nonprofit accounting software
Mistake #2: Selecting software that's hard for staff to use
Ease of use is critical, especially for non-tech savvy employees. Ensure the CRM:
- Has an intuitive, clutter-free interface
- Offers robust training resources and support
- Allows customization to fit your nonprofit's needs
Donation Management
Accurate donation tracking is essential for nonprofit fundraising and financial reporting. Here are some key mistakes to avoid:
Mistake #3: Using spreadsheet-based donation tracking
Spreadsheets are prone to errors and invisible data corruption over time. Choose dedicated fundraising software with features like:
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Online donation forms and Stripe integration
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Robust reporting on giving metrics and trends
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Automatic tax receipt and acknowledgment emails
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Seamless syncing with your CRM
Mistake #4: Minimal payment processing integration
Look for software that centralizes donation processing by integrating tools like:
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Online credit card processing
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ACH payments and bank transfers
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Text-to-give mobile campaigns
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Apple Pay/Google Pay
Robust integration avoids manual entry and reduces human error.
Volunteer Management
Volunteers are a nonprofit's lifeblood. Avoid volunteer management mistakes with the right software approach.
Mistake #5: No centralized volunteer database
Trying to track volunteers via spreadsheets or notes creates duplicates and inaccuracies over time. Invest in a volunteer management system that:
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Maintains a central database of volunteer records
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Allows self-signup and coordination of availabilities
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Posts calendar-view schedules and assignments
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Tracks hours served for reporting
Mistake #6: Communicating last-minute vs. proactively
Lack of proactive communication leads to forgotten shifts and frustration. Look for tools with:
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Automated reminders of upcoming assignments
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Email and text capability
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User portals for self-managing profiles and shifts
This reduces the burden on staff and boosts volunteer retention.
Project Management
Bring order to chaos by improving nonprofit project coordination. Watch for these project management pitfalls:
Mistake #7: No central task and deadline tracking
Shared project information gets lost across email chains and personal lists. Opt for shared software like Trello or Asana that allows you to:
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Create project boards with tasks, due dates, and assignees
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Set reminders for upcoming deadlines
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Attach files and include comments/notes
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Give project team members access to collaborate
Mistake #8: Communicating within silos
Email and personal contact lists create internal silos. Ensure your software encourages cross-department sharing via features like:
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Organization-wide access to projects and workflows
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Task assignments and notifications across teams
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File-sharing across projects and teams
Breaking down silos boosts productivity and alignment.
Financial Management
Don't undermine your mission with poor financial oversight. Here are nonprofit finance software traps to avoid:
Mistake #9: Using poorly-fitting accounting software
Many small business tools lack nonprofit-specific features like fund accounting, grant management, and FASB compliance. Choose systems designed for nonprofit finance like:
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Aplos
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QuickBooks Online Nonprofit Edition
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Sage Intacct
- Xero
Mistake #10: Manual processes and spreadsheets
Tedious financial tasks and spreadsheet-based reporting drain staff time. Look for process automation like:
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Online purchase approvals
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Automated invoicing and expense reimbursement
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Scheduled financial reports
The right software removes bottlenecks and creates transparency.
Moving Forward
Avoiding common nonprofit software pitfalls takes research and planning. But powering your mission with purpose-built technology yields big rewards in efficiency, accuracy, and insight. Use this guide to inform smarter software decisions that empower your nonprofit.