Altruism & Accountability | Finding Balance with Nonprofit Software

by

ERP Analyst, Software Advice

The nonprofit world is lined with the good intentions of well-meaning people looking to change society for the better. The problem is that without the same level of passion for business management, these bright ideas can lead to an organizational implosion. From having the right accounting software in place to following best practices, the only method to ensure that your altruism endures is to make sure you’re accountable each step of the way.

Greg Mortenson Provides an Unfortunate Example

The recent uproar over Greg Mortenson and his nonprofit Central Asia Institute is a perfect example of what happens when good intentions go awry. Before CBS’ 60 Minutes aired its April 17th exposé, Mortenson – both a New York Times best-selling author and a Nobel Peace Prize nominee – had been heralded as one of America’s leading humanitarian workers.

In the media firestorm after the 60 Minutes episode, Mortenson came under widespread condemnation for embellishing the facts in his acclaimed memoirs, Stones Into Schools and Three Cups of Tea. However he has been even more harshly criticized in his role as executive director of the Central Asia Institute, accused of mismanaging the organization and misusing its funds.

In the Wall Street Journal article, “The Big Spill Over Three Cups of Tea”, Cameron McWhirter notes the difficulties that many organizations have experienced in the wake of Mortenson’s mess. McWhirter writes, “Grass-roots nonprofits across the country now find themselves under intense scrutiny because of the Mortenson scandal. All are bracing for an impact on giving.”

Regardless of whether Mortenson had intentions of wrongdoing or not, the Central Asia Institute and its mission have undoubtedly suffered. It’s challenging for organizations to recover from such negative press. Stories such as Mortenson’s serve as a cautionary tale for all nonprofits. The lesson?–Go back to the drawing board regularly to ensure the right checks and balances are in place to monitor your fundraising, accounting, and business practices.

Accountability Steps to Take Right Now

One Austin, Texas-based nonprofit, Any Baby Can (ABC), is an example of one nonprofit that has taken steps to be equally open and accountable to the public. ABC’s Communications Manager, Allison Daskam, noted the importance of not only communicating with donors and the public, but also taking the next steps in transparency: actively encouraging outsiders to peek in and take a look at their organization. Daskam said,

“It’s one thing to be public and it’s another thing to really make a concerted effort to make information easy for people to find.”

As nonprofits like Any Baby Can understand, the answer to accountability requires the right protocols and the diligence to adhere to them. For starters, you can investigate objective ratings-based websites that give report cards for nonprofits. Utilizing the criteria that these websites (e.g., Charity Navigator, GiveWell, and Guidestar) have created, your organization can identify ways to follow standardized best practices for nonprofit management.

Beyond exploring best practices, the next step you can do is evaluate your organization and focus on the areas that need need the most work – often referred to as capacity building. This level of self-evaluation demands honesty and open communication among your team about what’s working and what’s not. There are a number of tools available online that can guide you in navigating through an array of potential issues, such as employee compensation, characteristics of good board members, program evaluation metrics, and many other topics that nonprofits are forced to confront.

Software is Critical, But Underutilized

The one area where nonprofits really stand to gain ground is in the adoption of more sophisticated software solutions. While nonprofit organizations effectively use social media and online fundraising tools, many are still far behind the technology curve when it comes to their core management practices. Applications such as fund accounting, compliance, fundraising, and email marketing are just a few of the essential solutions every nonprofit should consider.

According to results from the 2010 survey, “Nonprofit IT Staffing & Spending” – sponsored by the Nonprofit Technology Network (NTEN) and The NonProfit Times – few nonprofits are leveraging technology. Compared to the for-profit realm, the nearly 1,200 nonprofit survey respondents cited relatively low numbers when it comes to technology utilization. Most notable in the findings was that only 40 percent of nonprofits have strategic technology plans in place. Other key survey findings include:

  • 22 percent evaluated the return on investment of a technology project.
  • 32 percent described their organizations as technology leaders.
  • 45 percent of IT spending goes to technology or software itself.

In the past it might have been daunting for smaller organizations to make the initial financial investment in a fully integrated, on-premise fundraising and fund accounting system. Now, however, there are a number of software as a service (SaaS) options for nonprofits, such as Serenic Navigator, providing the same applications in a web-based solution. These cloud-based services enable better cost control, as many offer monthly billing options to help you anticipate spending.

Accountability Requires Consistent Effort

Whether Greg Mortenson was ill-intentioned or not, his lax financial management blurred the lines between careless and criminal. Following best practices and utilizing all of the means at his disposal might have spared him the trouble he is in today. Accountability is an ongoing process and when you have the right protocols in place, it's much easier to manage. As the Mortenson case shows, being an agent of change means more than having great ideas with little follow through – it also means staying diligent in your business operations to ensure your vision leaves the right legacy.

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  • http://www.facebook.com/people/Susan-Hale-Whitmore/1634448888 Susan Hale Whitmore

    You are one of the few, David, who has written about the CAI / Greg Mortenson “situation” in both a fair and a constructive manner. That in itself is a public service!

    While yours is a single voice, its seriousness and balance add greatly to the calls from one side of this melee for “innocent until proven guilty” and “let’s help CAI right it’s ship so it can keep sailing.”

    Employing that situation to describe tools available to all NGOs is perfectly legitimate, especially because you end your first section with:

    “Regardless of whether Mortenson had intentions of wrongdoing or not, the Central Asia Institute and its mission have undoubtedly suffered. It’s challenging for organizations to recover from such negative press. Stories such as Mortenson’s serve as a cautionary tale for all nonprofits.”

    P.S. Your piece is also beautifully written :)

  • patienceplease

    While I appreciate the piece, it still sounds like “poor Greg Mortenson is history” – rather than – “here’s what Greg should do”… Any tiny NGO that experienced such a huge infusion of cash and publicity would have a hard time coping. ESPECIALLY an NGO that operates in 3rd world countries… Would rather it be treated as “a bump in the road” rather than a “done deal” as a result of 60 Minutes combination of interviews with former employees, enemies and laser focus on one year’s (2009) financials. Is the teacup “cracked” or “shattered”? The man is boots on the ground – sorry that didn’t include a CPA in 1st world accounting :/ (which I believe can be brought up to speed!). Don’t write off CAI yet!!!

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