Efficiency & Accountability: Two Keys to Nonprofits’ Success

Fundraising is vital to many nonprofits, and today’s organizations have to compete ever more aggressively for donations.

For instance, while some donors indicate that they will increase their contributions during the pandemic, nearly a quarter will decrease their spending. Further, the COVID-19 pandemic has spurred more than $13 billion in donations to relief funds and medical research, crowding out the appeals of other kinds of nonprofits.

Even before the Coronavirus, many of these organizations operated with little margin for error, making the repercussions of the pandemic especially severe. According to The New York Times, nonprofit income is down by up to 50%, and many organizations have furloughed significant swaths of their workforce.

In other words, across the board, nonprofits are trying to do more with less. There is a lot at risk, as jobs, resources, and mission are all on the line. To succeed in the months and years ahead, nonprofits will have to demonstrate unparalleled agility. One way is to improve efficiency and accountability. 

Improving a Nonprofit’s Efficiency & Accountability

Donors want to know that their dollars are going to good use. In a best practices breakdown for nonprofits, Get Fully Funded, an organization that supports nonprofit fundraising initiatives, notes that today’s donors expect more for their money, desiring a “good return on their investment.”

At the same time, they don’t want to be routinely solicited for additional money. In other words, they want nonprofits to do more, and they want them to do it more efficiently.

News headlines are replete with examples of nonprofits absorbing excessive funds for overhead while devoting insufficient resources to the cause and mission. Nonprofits can respond by streamlining their cost structures and reorienting their accountability mechanisms to maximize efficiency and transparency.

For example, properly automating employee expense tracking strengthens internal controls and distributes spending down to the level of funds and projects, allowing nonprofits to account for every expense. 

Integrating expense management with time tracking completes the picture of accountability. How employees spend their time can be easily analyzed in reference to organizational and donor priorities.

Tight integration of time and expense also eliminates overlapping processes, data, and codes. In turn, this reduces confusion, reconciliation, adjustments, error, and delayed responses to information requests. When the time and expense systems are tied to the rest of the organizations’ systems, like accounting and payroll, the benefits multiply.

A powerful, streamlined, transparent administrative system speaks volumes to donors. Making the most of their contributions is more than a pitch, and the organization has the skills and commitment to fulfill its mission.   

Nonprofit Efficiency Initiatives – An Opportunity & A Challenge 

Automating cost structures and improving transparency requires nonprofits to be agile and effective. In the process, they need to account for the usability of these efforts at every step.

In an assessment of nonprofit efficiency initiatives, Forbes Nonprofit Council identified several ways that organizations derail their efficiency efforts, including creating unnecessary steps, redesigning the process, and failing to account for established ways of doing things. These mistakes reduce the likelihood that positive long-term change will be achieved.

Since many nonprofits are already overworked and under-resourced, efforts to boost efficiency and accountability must be met with simplicity and specificity. This includes:

  • Implementing an employee-first approach.
  • Prioritizing ease-of-use over complexity.
  • Requiring a high degree of adaptability from their digital solutions.

In the case of time tracking and expense reporting, this means emphasizing simplicity by focusing on the essentials you need from the systems. At the same time, be aware that things change (as if anyone today needs to be told!) and flexibility in your solutions is no longer optional.


Donors are especially careful about their contributions during times of hardship and uncertainty, making right now the right time for nonprofits to get their house in order by updating their administrative systems such as time and expense management..

Doing so will give them greater credibility and prepare to master the future’s challenges.

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