Since its inception, the WSU Tech Foundation has primarily been supported by corporate partners that recognize the value of technical education and invest in our students by hiring them into high-demand careers. However, our employees have long been the backbone of the Foundation’s mission, shaping students’ futures not only in the classroom but also by contributing their own resources to ensure student success. Faculty and staff have consistently demonstrated their dedication, placing their trust in the Foundation to support the students they work with every day. To date, the power of employee giving at WSU Tech has positioned our employees as the single largest group of individual donors to the WSU Tech Foundation. 

A Legacy of Giving 

Employee giving at WSU Tech dates back to 2011, long before the Foundation had dedicated staff. What began as a grassroots effort to send a cohort of Aviation Maintenance Technician students to the MRO Americas competition, with employees asked to contribute $5, soon grew into an ongoing initiative. Many of the employees who participated in that first campaign remain with the college today, still donating to the Foundation, a testament to the deep-rooted culture of giving at WSU Tech. 

From 2011 to 2019, employee donor participation steadily increased, reaching its peak in 2019. However, after 2019, the WSU Tech Foundation experienced an average decline of 9.5% in donors each year. While the total donation amount continued to rise during this time, the decrease in the number of donors became a growing concern. To the Foundation, this decline represented more than just statistics – it indicated how effectively we were educating employees about the Foundation’s impact and how well we maintained the trust of our employee donors. 

This data directly led to a strategic shift in 2024. Rather than focusing on increasing the total funds raised, we prioritized employee engagement and sought to rebuild awareness, trust, and excitement around giving. 

A New Approach in 2024 

Recognizing this trend, the WSU Tech Foundation set a bold goal for 2024: shifting the focus from the dollar amount raised to reigniting a culture of giving among employees. Our aim was to deepen the connection between our employees, the Foundation, and the students whose lives they help shape every day. To achieve this, we prioritized storytelling, transparency, and interactive engagement. 

Key strategies included: 

• Heartfelt Student Success Stories: Employees witnessed firsthand the impact of their contributions through stories of students who benefited from Foundation support via shared thank-you notes and student interviews. 

• Personal Thank-You Moments: Encouraging meetings between employee donors and the students who received their named scholarships–through the Foundation’s annual scholarship luncheon or personal meetings on campus to share a photo and moment of gratitude. 

• Monthly Giveaways: Featuring experiences such as a flight in the WSU Tech Private Pilot Program plane, student-made gifts such as a welded flower bouquet or molded concrete rock, and exclusive opportunities such as dinner at the President’s house or tickets to a suite at our local baseball stadium, these incentives transformed giving into an uplifting experience. 

A major milestone of the 2024 campaign was the creation of the Employee Hardship Fund. This initiative received an overwhelmingly positive response, as employees recognized the significance of supporting not only students but also their fellow colleagues facing unexpected financial challenges. Many donors continued to contribute to student-focused initiatives while also donating to this new fund, further deepening their engagement with the Foundation. 

A Resurgence in Employee Giving 

The results of our revitalized employee giving campaign exceeded expectations. In 2024, we achieved: 

• A 21% increase in employee donors, with 60% of our full-time employees contributing to the Foundation. 

• A 15% boost in funds raised, making 2024 the most successful year of employee participation since the campaign’s inception in 2011. 

Beyond the numbers, this campaign fostered a renewed sense of community and shared purpose. WSU Tech employees demonstrated that giving is not just about financial contributions, it’s about investing in our students’ futures, supporting fellow employees, and reinforcing a culture of giving that strengthens our entire institution. 

The Power of Employee Advocacy 

WSU Tech employees are the Foundation’s greatest advocates, volunteering their time, expertise, and financial resources to advance the college’s mission. Their trust in the Foundation ensures that students have the resources they need to succeed, from scholarships and cutting-edge equipment to emergency financial assistance. The 2024 campaign was not just a fundraising effort; it was a movement that reinforced the bond between employees, students, and the Foundation. 

As we look ahead, the momentum from 2024’s success has carried into 2025. The Foundation’s annual fundraiser, Pull a Plane for Education, saw the highest level of employee engagement in the event’s four-year history. WSU Tech faculty and staff participated in every capacity – attending, competing, and donating. One employee even created their own mini-fundraiser, rallying their colleagues to contribute, with the added fun of donating to see their coworkers get pied in the face! This growing culture of engagement demonstrates that when WSU Tech employees unite, they make an undeniable impact – on students, on each other, and on the future of technical education. 

At the WSU Tech Foundation, our mission is to be the College’s partner in removing financial barriers and empowering students for the advancement of their lives and our region. None of this work would be possible without our dedicated employees–the true champions of student success. 

The post How WSU Tech Reignited a Culture of Giving with Their 2024 Employee Donor Campaign first appeared on The ENGAGE Blog by Blackbaud.

In this blog, we’ll cover everything you need to know about the key foundations of an effective donation form, along with practical tips and tricks to boost conversions and satisfaction alike.

Understanding the Online Giving Landscape

The world of charitable giving has undergone a massive transformation in recent years, with online donations becoming an essential fundraising channel for nonprofits and educational institutions both. As technology advances and digital platforms evolve, understanding the online giving landscape is crucial for organizations looking to maximize their fundraising potential.

Specifically, online giving refers to the process of donating money through digital platforms⁠—including nonprofit websites, crowdfunding campaigns, mobile apps, social media fundraisers, and more. The ease and convenience of online giving has made it a preferred method for many donors, allowing them to contribute anytime, anywhere, using credit cards, digital wallets, or direct bank transfers.

Online giving is steadily growing, particularly with emerging nonprofits and schools, representing 13.4% of all giving to small organizations. Meanwhile, corporate giving has also experienced significant growth, with businesses recognizing the importance of social responsibility in their strategies and more and more organizations including matching gift designations on their donation forms.

Key Online Giving Elements: Building Effective Forms

A well-designed online giving page can significantly impact donor engagement and conversion rates. To maximize contributions and ensure a seamless experience, consider these essential elements when building (or tweaking!) an effective form.

Accessibility

A truly effective donation form is one that every donor can use⁠—including those with differing abilities or limitations. Thus, accessibility ensures that all potential supporters can navigate your form and complete their donations with relative ease.

What makes a donation form accessible?

• Perceivable: Is your donation form easy to locate on your website?
• Operable: Is your donation form usable from a donor’s perspective?
• Understandable: Does your donation form employ simple language, clear images, captions, and/or ALT text when necessary?
• Robust and easily interpreted: Does your donation form lead the donor through the complete giving process?

Pro tip: When it comes to accessibility, keep in mind that this should include any additional fundraising integrations that you add onto your donation form, too⁠—like a matching gift search tool!

Consistent Branding

For the best results, your donation page should align seamlessly with your organization’s overall branding. Thus, you’ll want to incorporate your color scheme, fonts, and imagery into the form’s design. In other words, the layout should mirror your main website to provide a cohesive giving and engagement experience.After all, a well-branded form reassures donors that they’re giving to the right place and fosters a sense of professionalism and credibility.

Beyond aesthetics, you’ll want to maintain consistency in your messaging, too. If your nonprofit is known for its warm, inspiring tone, let that voice carry over into the form’s text and call-to-action buttons. Again, this helps reinforce donor confidence and encourages them to complete their gifts.

Storytelling

A donation form isn’t just a transaction page—it’s an opportunity to remind donors why their contributions matter. Luckily, storytelling can transform a simple act of giving into a meaningful experience by connecting donors to the people or causes they’re supporting.

To get started, include a brief but powerful story on the form, highlighting how donations make a tangible impact on your cause. This could be a short testimonial from a beneficiary, a compelling statistic, or an image that evokes emotion. For example, a hunger relief organization might display a photo of a child receiving a meal with a caption like, “Your gift of $50 provides a month of nutritious food for a child in need.”

Fine-Tuned Form Fields

The more complicated a donation form is, the more likely a donor is to abandon it. Luckily, fine-tuning your form fields ensures a smooth, frustration-free experience that encourages completion.

Though it can vary by form and approach, start by requiring only essential information. While it may be tempting to gather extra details for future outreach, too many fields can deter donors.

Typically, name, email, and payment details should be the minimum. If you need additional information (such as employer name), consider making those fields optional to reduce barriers to giving and avoid additional friction in the process.

Diversification of Giving Methods

Different donors have different preferences when it comes to payment methods. Some may want to use a debit or credit card, while others prefer PayPal, Apple Pay, or ACH bank transfer.

Ultimately, offering multiple options increases accessibility and prevents potential donors from abandoning their gifts due to payment limitations. The more ways people can give, the fewer roadblocks they will encounter in the donation process.

Suggested Donation Amounts

Many donors struggle to decide how much to give. Suggested donation amounts can help guide their decisions and often lead to higher contributions overall. Therefore, instead of leaving the donation amount open-ended, present predefined options⁠—such as $100, $250, $500, or $1,000.

For the best results, however, you’ll want to customize these presets based on your audience and typical donation behavior. If your analytics reveal that most donors give around $50, make that the default selection. You can motivate deeper generosity when you pair each amount with a brief impact statement—such as “$50 provides school supplies for one student for a semester.”

Still, be sure to include a custom donation field for those who prefer to give a different amount (above, below, or in between suggested gifts). You want all potential donors to be able to contribute at a level comfortable for them.

Recurring Giving

Recurring giving is one of the most effective ways to build sustainable funding. That’s why a well-optimized donation form makes it easy for donors to commit to a monthly, quarterly, or annual gift.

Often, it’s as simple as prominently featuring a checkbox or button that allows a donor to upgrade their contribution to a recurring one.

Meanwhile, to encourage this behavior, use language that reinforces the impact of ongoing support, such as “Make this a monthly gift to provide continuous help to those in need.”

Matching Gifts

Many donors are unaware that their employers may match their charitable contributions⁠, but the presence of a potential match can have a real impact on supporter behavior. As a result, integrating a matching gift tool into your donation form can significantly increase donations without requiring donors to give more themselves.

Include a simple employer search function (such as Double the Donation’s embeddable database tool) that allows donors to check if their company participates in matching programs. Then, if applicable, the platform provides information on how they can submit a matching gift request.

Highlighting matching gifts not only increases the impact of individual donations but also encourages higher giving levels since donors know their contributions could be doubled or even tripled.

Regularly Test Your Form

An excellent donation form isn’t static. It should be regularly tested and refined to improve conversion rates over time. To do so, try conducting A/B testing on different elements, such as button colors, form layouts, suggested donation amounts, or call-to-action text, to see what resonates most with donors.

From there, analyze key metrics, such as abandonment rates and average donation size, to identify areas for improvement.

• Are donors dropping off at a particular step?
• Is mobile performance lagging behind that of desktop users?

These insights can help guide necessary adjustments so you can be sure your form remains user-friendly, efficient, and effective in maximizing contributions.

Looking Ahead: The Future of Digital Giving

As technology evolves, so too does the landscape for digital giving. Nonprofits that embrace innovation and adapt to shifting donor expectations will be best positioned for long-term success.

Here’s what we expect on the horizon:  

• A continued increase in mobile giving
• Growth of AI in fundraising
• Adoption of social media and influencer partnerships
• Expanded workplace giving initiatives
• Opportunities for hyper-personal giving

By continually optimizing your donation forms and staying ahead of technological trends, your team can ensure that its online giving experience remains effective, engaging, and accessible to all.

The post Tips and Tricks to Fine-Tune Your Donation Form first appeared on The ENGAGE Blog by Blackbaud.

To steer your institution safely through these challenges, you need more than just a steady hand. You need the ability to adapt quickly and effectively. That’s where financial agility comes into play. Modern K–12 private schools require a new level of financial responsiveness to address changing conditions while continuing to prioritize student success. Let’s explore why this agility is so essential and how your school can achieve it.

Key Trends Shaping the Financial Landscape for K-12 Private Schools

Private K–12 schools operate within a dynamic financial landscape shaped by external factors that can shift unexpectedly. Enrollment changes, driven by demographic trends and shifting family preferences, often play a significant role in determining your school’s revenue. Declining birth rates and aging populations in certain regions may result in fewer prospective students, while other areas could see an uptick in demand due to population growth or increased interest in private education. Monitoring these trends helps you anticipate how enrollment will impact your finances.

Policy changes also affect your school’s bottom line. Government initiatives, tax incentives, or voucher programs can increase accessibility to private education, spurring enrollment growth. Conversely, new regulations may require costly compliance measures or create barriers for families considering private schooling. Staying informed about legislative developments ensures your school can adapt without losing focus on delivering quality education.

Weather-related events, unfortunately, have become more frequent and unpredictable. Severe storms or natural disasters can disrupt school operations, reduce event-based revenue, or necessitate costly repairs. Proactive planning, including allocating funds for emergency preparedness, can help minimize the financial strain these events cause.

Finally, shifts in federal funding have wide-ranging effects on private schools, especially those providing specialized programs or Individualized Education Plan (IEP) resources. Cuts to funding streams or changes in eligibility criteria may force schools to reallocate resources or identify alternative revenue sources to sustain these offerings.

Your school faces a complex array of pressures that influence both revenue and expenses. Identifying and forecasting these trends can empower you to respond effectively while keeping student education at the heart of every financial decision.

Why Financial Agility is Key for K–12 Private Schools

To engage with these financial complexities, private K–12 schools must adopt a strategy of financial agility—an approach that blends revenue diversity, operating reserves, and precise financial reporting. These components provide the flexibility and insight needed to anticipate and adapt to changes while prioritizing student success.

Revenue Diversity: Strength in Variety

Relying heavily on a single income stream, such as tuition, can leave your school vulnerable to unexpected fluctuations. For instance, an enrollment dip or an external event impacting tuition payments could significantly disrupt operations. By diversifying your revenue streams, you create a financial safety net that ensures stability even when one area experiences a downturn.

A healthy mix of income sources—such as fundraising, endowments, grants, and program-specific fees—helps reduce reliance on any single contributor. Balancing restricted funding (earmarked for specific purposes) with unrestricted funding (flexible use) ensures you have both targeted resources and adaptable funds to address immediate needs. Regularly evaluating your revenue streams and their returns on investment can help you identify where to focus your efforts for sustainable growth.

Operating Reserves: Breathing Room for Strategic Decisions

Operating reserves are essential for weathering short-term financial disruptions and taking advantage of opportunities that arise. Think of reserves as your school’s financial buffer—enabling you to handle an unplanned repair, respond to a sudden enrollment change, or invest in a promising initiative without compromising daily operations.

By maintaining well-funded reserves and aligning them with your school’s spending policy, you ensure that financial decisions remain deliberate, rather than reactive. This breathing room allows leadership teams to focus on long-term goals while maintaining stability in the face of short-term challenges.

Current and Accurate Reporting: Your Financial Compass

Effective financial agility isn’t possible without personalized and accurate reporting. A single source of truth for your school’s financial data eliminates confusion and keeps all stakeholders—CFOs, Heads of School, board members, and others—aligned in their decision-making.

Advanced reporting tools that integrate scenario planning, forecasting, and cash flow management allow you to pinpoint potential gaps, project outcomes, and create proactive solutions. With access to real-time data, your school can adapt to changing conditions more effectively and make well-informed financial choices.

By implementing these practices, your school not only strengthens its ability to adapt but also reinforces its commitment to delivering quality education no matter the financial climate. This balance of flexibility and foresight is the foundation of true financial agility.

How Your School Can Be More Financially Agile

Financial agility doesn’t happen overnight—it requires intentional planning and the right systems to support it. Here’s how your school can build flexibility and sustainability to navigate challenges effectively:

Strengthen Your Operating Reserves

Operating reserves act as your school’s financial safety net, providing stability during unexpected disruptions or opportunities. Begin by defining a reserve policy aligned with your long-term goals to make sure reserves are maintained and used thoughtfully. Regularly review and update the policy to reflect current priorities and allocate funds strategically to balance day-to-day operations with future planning.

Diversify Revenue Streams

Relying solely on tuition revenue can be risky. Collaborate with your development team and leadership staff to explore additional income sources, such as fundraising campaigns, grant opportunities, or fee-based programs. Evaluate each revenue stream’s return on investment—including time and resources required—to prioritize efforts that deliver the greatest impact. A diverse financial portfolio helps mitigate risk and maintain stability during economic shifts or enrollment changes.

Develop a Cash Flow Plan

A clear cash flow plan ensures consistency and allows for better forecasting. By analyzing historical trends and anticipating future fluctuations, you can allocate resources more effectively. A strong plan provides insights into timing gaps between income and expenses, enabling your school to adjust proactively rather than reactively.

Create a Unified Reporting System

Accurate and timely financial data is crucial for informed decision-making. Integrate automated systems that eliminate manual entry errors and provide access to real-time information, creating a single source of truth for your school’s financial health. This unified reporting system allows leadership to quickly identify trends, address gaps, and implement actionable solutions with confidence.

Implementing these strategies empowers your school to adapt quickly, sustain operations, and continue delivering quality education, no matter the financial challenges ahead.

Unlock Financial Agility with the Right Tools

A fund accounting system like Blackbaud Financial Edge NXT® can be instrumental in helping private K–12 schools achieve financial agility. By offering specialized tools designed for nonprofit financial management, Financial Edge NXT allows schools to manage their finances with greater precision, adaptability, and foresight.

When integrated with Blackbaud Tuition Management and Blackbaud Raiser’s Edge NXT®, Financial Edge NXT becomes even more powerful. It creates a seamless connection between tuition revenue tracking, billing operations, fundraising, and overall financial reporting. This integration reduces manual work, minimizes errors, and provides leadership with accurate, real-time data to make informed decisions.

For schools aiming to diversify revenue streams, Financial Edge NXT offers advanced reporting capabilities that help evaluate the effectiveness of each source—whether it’s tuition, fundraising, or grants. This level of insight enables schools to prioritize initiatives and optimize efforts for sustained growth.

Additionally, the software’s forecasting and cash flow management tools empower schools to plan with confidence. By identifying trends, gaps, and opportunities, leadership teams can proactively allocate resources and prepare for changes in enrollment or external funding. The ability to create scenario-based plans ensures that schools are equipped to navigate financial challenges while maintaining their commitment to student success.

Financial Edge NXT is a practical solution for schools looking to enhance their financial agility. It provides the tools needed to manage reserves effectively, diversify income, and maintain clarity in reporting—all essential components for staying adaptable in a shifting financial landscape.

Discover how fund accounting software can help private K–12 schools navigate enrollment shifts, policy changes, and unexpected challenges by checking out our white paper, Why K–12 Schools Need Fund Accounting Software.

The post The Importance of Financial Agility in K–12 Private Schools (and How to Get It) first appeared on The ENGAGE Blog by Blackbaud.

Teachers want to spend less time on administrative tasks and more time teaching and engaging with their students. School leadership and the families they serve want that, too. Here are 5 ways your LMS can help make that happen:

1. Everything in One Place

Start with a Learning Management System (LMS) that is fully integrated with your Student Information System (SIS). When the two systems are on the same platform under one login, teachers have one location to update student records of all sorts and administrators get consistent, reliable reporting on individual student, class, and grade-level academic progress.

Save teachers time by housing all their coursework in one system so they can easily reuse it for the next class of students. With a robust SIS/LMS, teachers don’t have to rely on paper files or disjointed systems, and they can easily track which topics resonated, which need updating, and where there may be gaps. When summer is coming to an end, teachers can look at all their existing files and resources and refresh what they want to reuse for the fall semester.

Once the semester begins, an integrated SIS/LMS means teachers have one portal to log attendance, assign and review homework, update their Gradebook, host student resources, and communicate with students and families. There’s no more need for separate logins or back and forth emails.

2. Student Engagement Tools

Teachers can save time trying to keep students engaged by creating and sharing interactive content, videos, quizzes, and simulations that can make learning more engaging and fun. A good SIS/LMS facilitates collaboration and group discussions among students and offers gamification features—such as points, badges, and leaderboards—that can motivate students to connect more actively with the course material.

Insights from the SIS/LMS can also help teachers personalize learning experiences for individual students based on their strengths, weaknesses, and interests.

3. Flexible and Customizable Grading Methods

Your SIS/LMS should enable flexible and customizable grading methods to meet a wide range of pedagogies. The best SIS/LMS will support mastery-based education, criteria-based assessments, self-assessments, gamification, and numeric or letter grades with the ability to add personalized comments to each student record. This allows teachers to tailor their grading methods to best suit their teaching style and the needs of their students.

Teachers should also be able to view aggregated year-over-year assessment results and determine trends or areas where students struggle. Having that historical data means they can identify subjects that need greater attention or a different approach to improve student understanding of the subject matter.

4. 360° Student View

A fully connected SIS/LMS means teachers, families, advisors, and administrators get a centralized overview of each student’s complete record. Schools can provide role-based and view-only access to everything, including:

• Contact/emergency/medical information
• Attendance and conduct records
• Teacher and advisor notes
• Class and extracurricular schedules
• Clubs and activities
• Dorm information
• Homework, grades, report cards, and transcripts
• Graduation progress and GPA

Blackbaud’s integrated SIS/LMS also has a “Find Me Now” feature that empowers teachers and administrators to locate students and other teachers in real time based on the day’s actual schedule, including rotations, custom days, and partial days.

5. Strategic Automation and AI

Your SIS/LMS can also save teachers’ time with strategic automation and workflows, Gradebook shortcuts, bulk actions, and cross-departmental collaboration tools. For example: when a teacher submits grades, the automated workflow puts a task on the appropriate admin’s dashboard to review and approve those grades, which they can do with the push of a button.

Blackbaud’s SIS/LMS has an AI-enabled question generator and assessment question banks to help K–12 educators develop class assignments, quizzes, and student assessments. We’re also developing an “at-risk” student tool to help teachers identify students in need of extra support by consolidating data on attendance, test scores, and work completion.

Families Benefit, Too

With a fully integrated SIS/LMS, when teachers update grades, attendance, assignments, conduct reports, etc., that information propagates across systems. Once submitted and approved by an administrator, the information is immediately accessible to students and their families. This streamlines the process for everyone and ensures that all information is consistent and up to date.

This also means that families can use one login to communicate with all their children’s teachers and school staff. Every class is in the same system, all grades and information are readily displayed, and the school-wide calendar and resource board are front and center, personalized to their children’s activities and interests.

Families can use that same login to update information on their end. For example, if the child has new medical history, a scheduled absence, or a change of address, parents and caregivers enter it through the centralized portal and all approved school stakeholders see it in the student record immediately. If you have Blackbaud’s Total School Solution, the relevant information populates the enrollment, financial aid, tuition, accounting, and fundraising systems, too.

A Fully Connected SIS/LMS Benefits Everyone

With an integrated SIS/LMS, there is one single source of truth for student data, so all stakeholders have the most up-to-date information at their fingertips.

For teachers, leveraging an integrated LMS/SIS can significantly enhance the teaching experience by streamlining administrative tasks, fostering student engagement, and providing valuable insights into student performance. Educators can focus more on what truly matters—inspiring and educating the next generation.

The post Top 5 Ways Your LMS Can Save Teachers Time first appeared on The ENGAGE Blog by Blackbaud.

If that doesn’t represent your organization, welcome to the life of the typical nonprofit. And if it does sound like your organization, please share your secrets!

Budget scenarios are essential tools for organizations to navigate financial uncertainties and plan for various outcomes. By creating multiple versions of a budget based on different assumptions, you can better understand potential impacts and make informed decisions.

This approach enhances business planning capabilities and enables more adaptable and responsive financial management. Incorporating budget scenarios into your strategic planning can help your organization stay financially agile and better prepare for potential changes in your funding.

Here is what you need to know about budget scenarios and how to incorporate them into your budget planning.

The Power of Budget Scenarios

Scenario records allow you to create multiple versions of a budget based on different assumptions and variables, such as enrollment in a program or whether a federal grant comes through. You can store all the information you need to track and manage that budget within the scenario.

For example, a nonprofit might create scenarios based on different levels of donor contributions to understand how each scenario impacts their ability to fund programs, or to track various departmental expenses in more individualized ways.

Scenarios help organizations to better understand potential financial impacts and make data-driven decisions that fit seamlessly into a wider-ranging planning process. If you have planned for a dip in grant funding or a wildly successful trivia night, you will already have a roadmap if something similar happens. Scenarios allow for more flexible and responsive financial management, so future budgets can be more honed-in with fewer adjustments.

When to Use Budget Scenarios

You can use budget scenarios to navigate uncertainties and plan for various financial outcomes. Create them prior to budget season, as you are going into your strategic planning process, or as you hear about events that may affect a revenue stream. They are excellent for cash flow planning. For example, community organizations may be at risk of losing or winning a significant grant, or a university might want to plan for potential impact on staffing and resources as a result of funding cuts.

Scenarios also help when considering whether to expand services or launch new programs, helping assess feasibility and assisting with preparation in the event of shortages or delays. They prove essential for such contingencies, enabling organizations to caution against campaigns that might miss their funding targets or adapt more nimbly to regulatory changes.

The flexibility of budget scenarios offers organizations the power to implement long-range strategic planning and ensure sustainability.

Tools to Create Budget Scenarios

There are a couple of tools you can use to create and effectively manage budget scenarios. Many organizations start with spreadsheets, especially for simple scenarios such as whether your signature event will bring in $5,000 or $25,000 in revenue.

For more in-depth scenarios, many fund accounting systems provide budget scenario tools directly within the system. Blackbaud Financial Edge NXT®, for example, has the Budget Creator Excel Add-In that allows users to enter and edit bulk budget data in Microsoft Excel and then import it directly into their fund accounting software. This feature saves time, reduces errors, and allows for complex calculations while working with large datasets. Users who don’t log into the software, like a school’s department heads, can still contribute to the scenario process by working in the familiar Excel environment.

Dedicated budget management options let users develop, copy, forecast, and monitor multiple budget scenarios. You can create an unlimited number of scenarios to facilitate a variety of comparisons across an organization. These can be easily configured to apply to individual fiscal years or cover specific period ranges when fiscal years may overlap. Such flexibility comes in handy, for example, when budgets may need to match the fiscal year of a grantor, or if campaigns have more fluid timelines.

Effective budgeting tools also allow for simplified sharing and collaboration. A private school might need administrators to easily share budget scenarios with board members and stakeholders, or department heads may require CFO approval before a budget is passed to the wider Board. The ability to export budget grids, include budget variables in financial statements, and document changes in detail ensures maximum transparency and cooperation throughout the organization.

As situations evolve, you can track changes to finalized budget scenarios via adjustments directly to the scenario grid itself. Having a centralized system of entry, sharing, and adjustment enhances financial management so challenges can be met head-on.

Simplify Budgeting and Forecasting with Blackbaud Financial Edge NXT® 

By using budget scenarios, nonprofits can make informed decisions, mitigate risks, and strategically plan for various financial situations. This proactive approach helps organizations remain resilient and focused on their mission while keeping information all in one place.

With a complete suite of budgeting tools available in a solution like Financial Edge NXT, nonprofits can enhance transparency, streamline financial processes, and ensure compliance, making it easier to adapt to changing circumstances and continue serving their communities effectively.

Want to learn more about how Financial Edge NXT can simplify budgeting for your organization? Check out our on-demand webinar, 10 Ways Financial Edge NXT Makes Budgeting Easier.

Already a Blackbaud customer? Check out the latest courses to learn how to get the most from all the tools at your disposal.

The post Future-Proof Your Organization with Effective Budget Scenarios first appeared on The ENGAGE Blog by Blackbaud.

Why Is Finding the Optimal Donation Experience Important?

People have lower attention spans than ever before. In 2004, the average adult’s attention span on a screen was two and a half minutes. Recently, it has dropped to 47 seconds. Any negative interaction or perceived annoyance on your donation page can cause a donor to lose focus and abandon a donation, even halfway through the process.

How Do I Use A/B Testing to Optimize My Donation Form?

The best approach to improving your donation form is to test and see what works, making small changes to achieve your goals. A/B testing sounds more complicated than it is. It’s simply comparing two versions of a donation form to find which is most effective. Some donation software, like Blackbaud’s Optimized Form, can do this for you, but you also can run your own tests to find results specific to your organization.

You can do optimization testing for how you’re getting donors to your donation form or on elements of the form itself. Before testing, know your baseline metrics—average gift amounts and your form’s conversion rate.

The A/B Testing Process

This process involves four key steps: building a hypothesis, creating a design, testing the hypothesis, and analyzing the data.

1. Build a hypothesis: Optimization begins with a hypothesis. Identify an aspect of the donation form that can be improved. Your hypothesis should be a clear and testable statement outlining what you expect to achieve through optimization. For example, “By simplifying our checkout process, we will increase conversion rates by 4%.”
2. Create a design to test your hypothesis: Once you have a well-defined hypothesis, design your changes or improvements, considering factors like user experience, design elements, and functionality enhancements. This step ensures that your optimization efforts are focused and intentional.
3. Implement and run your A/B test: When your test design is ready, implement it in your software. If you’re running a manual test, create two versions of your donation form with the designed change implemented only on one. Run your test by splitting an email appeal into two segments and sending each segment one of the forms. If you’re using an A/B testing tool, implement the variant within one form and use the optimization software to perform the test.
4. Analyze the data: After the test is complete, gather and analyze the data. Use your form data, A/B testing tools, user feedback, or other methods to compare the performance of the original against the optimized versions. Look for patterns and trends to determine whether your hypothesis was correct and whether the optimization had the desired impact. This helps draw meaningful insights so you can make data-driven decisions for additional optimization efforts in the future.
5. Rinse and repeat with your next hypothesis: Whether your hypothesis held true or not, A/B testing is never done. You’re changing the user interface for your donors one design tweak at a time. If your test won, great! Test again with a slightly different variant to see if you can get an even better result. If the results aren’t great, don’t give up—go back to the drawing board, design another test, and keep going until you achieve the desired outcome.

Where Do I Start?

Here are some common areas that can impact donor conversions and average gift amounts on donation forms:

1. Number of fields on the form: Does removing some fields or making them optional help with donor conversion? Test by removing or making one field at a time optional to find the optimal presence of fields.

2. Ask ladder: Does increasing your standard ask ladder amounts by 10% affect donor conversion or average gift amount? Does ascending or descending order make a difference?

3. Messaging and branding elements: Find the right message, visual identity, and call-to-action to encourage your donors to take action and donate, thus increasing your conversion rates.

4. Interactive visual elements: Does adding a totalizer encourage more people to give? Or to give more?

By systematically testing and refining different elements, you can identify what works best for your target audience and continuously improve your fundraising efforts. Remember, optimization is an ongoing process, and each test brings you closer to achieving your goals. Start with small changes, analyze the results, and keep iterating to create the most effective donation forms for your mission.

The post Try A/B Testing of Your Donation Form for the Optimal Giving Experience first appeared on The ENGAGE Blog by Blackbaud.

Does this sound like your month-end scramble? These hurdles are a few of the challenges that school business offices and nonprofit organizations face while doing their best to evaluate and keep track of employee purchases day-to-day.

Zeroing in on an easier way to get a handle on expenditures can be a game changer for any business office. And while there’s nothing like “the thrill of the chase” when hunting down multiple receipts, does anyone truly have time for that? So, how then do you get off that expense management merry-go-round?

Streamlining Nonprofit Finances with Purchase Cards

Allow me to introduce you to a tool called the Purchase Card. In the same way that a traditional personal credit card or corporate card can streamline your spending and payments, a Purchase card does that for your financial office, and then some. Not only can a Purchase card provide a singular place to review all spending, but also it comes with added benefits like custom credit ceilings and individualized transaction controls.

A well-functioning finance department ensures day-to-day security and efficiency in all their processes. Supervisors and controllers especially need tools that help increase their ability to oversee compliance and provide visibility into various aspects like universal spending. Let’s dive into a few ways Purchase cards offer increased control and streamline your expense management.

An Extra Layer of Security

Many business professionals rely on Google Docs or Excel for their purchasing and expense tracking. These may be your tried-and-true business office tools as well, but how protected is that information? Going one step further, how many individuals have access?

What if you could log into one central and secure location to access everything from spending ceilings to daily charges to charge frequency? Purchase card online portals give supervisors that level of transparency. The portal provides an interface to regulate and keep track of the who, what, where, and when for delegated cards and cardholders. This approach greatly reduces the risk of fraud or misuse of the purchase cards by the card owners.

Of course, there are caveats to consider when evaluating new tools. With any type of credit or purchasing card, there’s still a small percentage of risk involved. Even so, just like your everyday consumer credit cards, many Purchase cards incorporate ways to mitigate that risk, having the extra benefit of liability coverage in the unlikely event a card is stolen, or an employee were to try to use the card fraudulently.

Additionally, not every organizational employee has the same spending need. Your AP clerk may need a certain amount to ensure they can generate, process, and mail checks or EFT notices, while your IT manager might need greater bandwidth to regularly maintain, secure, and upgrade various technical systems for the organization. With different employee roles inevitably having different spending priorities and limits, Purchase cards also give you the added bonus of specifying unique limits and spending controls for each card holder.  

A Streamlined Expense Management Process

When employees use their individual Purchase cards, those transactions are funneled into one place for easy supervisor tracking and reporting. This workflow, in turn, provides admins or Controllers with a bird’s eye view of total spending. They can then use that spending to their advantage. For example, as an organization begins to build up a spending history and a top vendor emerges. This opens the door for a conversation about special rates or custom discounts with that vendor. Vendors do tend to incentivize their repeat customers. Along the same lines, if there is a vendor that several departments use, there may even be a case for lower frequency but larger quantity purchases to take advantage of a discount for a bulk order.

Purchase cards are also better for the environment because they are electronic, efficient, and instant. They are easy to track because there’s no waiting around for mailed checks to clear. The online card portal makes access to the pool of transaction information and controls easy and available 24/7. It also allows for increasing or decreasing a cardholder’s credit limit in real time.

Many cards also supply organizations with additional travel benefits. This can be a lifesaver for employees who are often on the road or in the air.

Finally, at the end of a spending cycle, balances for purchase cards are typically paid automatically via ACH at a certain time of the month. This eliminates the risk of late payments and takes one extra task off your to-do list.

Creating a Connected Expense Management System

While not all purchase cards out there come coupled with an expense management system, you’ll find there are often multiple benefits to having both pieces in your business office arsenal.

Having purchase cards integrated into your expense management system creates a completely streamlined expense and approval workflow. This is especially helpful when you have employees out in the field daily, all making their own purchases.  Accuracy and accountability inevitably improve when invoice request submissions are in the hands of the end user closest to that purchase. 

Purchase Cards: A First Step in AP Automation

Purchase cards are not just a convenient tool for managing expenses. They are the first step toward a more automated and efficient accounts payable process. By integrating purchase cards into your financial workflows, you can streamline payment approvals, reduce manual data entry, and enhance security. This initial step paves the way for further automation, such as automated payment reconciliation and batch payments, which can significantly improve efficiency and reduce costs.

Automated payment tools, like Payment Assistant included in Blackbaud Financial Edge NXT®, provide a faster, more cost-effective, and secure way to pay your vendors compared to traditional paper processes. They eliminate the need for manual tasks such as printing, signing, and mailing checks, and instead use pre-established pathways with vendors to match and pay invoices directly and seamlessly. This not only saves time but also reduces the risk of theft, fraud, and unauthorized changes.

Automation also simplifies the bank reconciliation process by adding the ability to match and clear transactions daily or monthly, making reconciliation less of a chore. With features like Bank Feeds and Cash Management, you can effectively manage multiple bank and cash accounts, serving as a central location for all inflows and outflows of cash within your organization. This streamlined efficiency also leads to enhanced accountability, ultimately driving better financial decisions for your nonprofit.

Simplify Your Nonprofit Finances with Purchase Cards

Incorporating purchase cards into your AP processes is just the beginning. As you adopt more automated solutions, you’ll find that your finance team can operate more efficiently, securely, and strategically, ultimately benefiting your entire organization.

Create your own butterfly effect and take the first step toward developing your spending insights. Purchase cards could very well be that new resource you implement for extra efficiency and control around your organization’s expenses. Having a solid handle on spending could eventually lead to opportunities for extra savings and better data-driven decisions.

Learn more about how Purchase Cards can streamline your processes and how real organizations are using them by visiting our Purchase Card solution page.

The post How Purchase Cards Simplify Nonprofit Accounting first appeared on The ENGAGE Blog by Blackbaud.

To remain an optimist as a fundraiser, you must be real especially about the challenges of philanthropy today:

• The percentage of giving households has shrunk from 75% to 45% in the past three decades.
• The number of nonprofits in the United States has doubled in the past 25 years
• Donor attrition has never been higher
• Fundraisers report their greatest challenge is “getting the first appointment” with a prospective donor

Many board members and organizational leaders are unaware of these megatrends. They expect more money to be raised this year than last year, sometimes much more. When fundraising totals fall short of expectation, they ask, “What’s wrong with the advancement team?”

It is far less likely that leaders have been done wrong by advancement and more likely that their expectations don’t align with philanthropic realities:

• Philanthropists now take a greater interest in causes that more directly address the issues they find the most relevant
• Too much emphasis has been placed on asking, and too little on building a community of shared purpose that will be receptive to your requests
• Leaders are still trying to get donors to subsidize your organization, not optimize its most effective service delivery functions
• They’re hoping for bigger gifts, not putting forward rationales for larger investments
• Their organization is overweighted in tactical execution but underweighted in emotional intelligence
• They are not offering a variety of options that show donors how they can give through your organization to create a better world

Yet, in the face of all of this, it is incredibly important for those of us in the social-good sector to build on what we believe:

• The best in human nature will persist and prevail
• The greatest difficulties bring out the best in the best of us
• Many will continue to express their philanthropic gratitude to organizations that have helped them and their loved ones, clearly improving the human condition
• Many will continue to invest in improving the lives of those whom they will never know
• Many will continue to contribute to causes that try to correct social ills
• Supporters will make sure that capital in all forms will continue to gravitate to the most compelling possibilities

Believe that there will always be such people.

There always have been.

There always will be.   

However, we must appeal to the virtues of such people and not seek to bend them to lesser purposes and mundane needs. To do that, we have to step back from this frenetic whirling around we all seem to do in the name of fundraising and look afresh at the assumptions on which we have built so many fundraising practices. We need to ask, “Is it all designed to bring out and reinforce the best in human nature?”

The Questions Optimists Must Dare to Ask

In order to build a shared sense of purpose, the optimists among us (and, yes, even the brittle pessimists) should ask hard questions about our fundraising-focused processes and goals.

1. Are we staying true to our mission?
2. Have we become more fixated on raising money than converting money into mission advances?
3. Have we fallen into the trap of asking for money to keep our operations afloat rather than projecting how we could better serve?
4. Do our strategic plans look more like wish lists for internal stakeholders than societal commitments?
5. Are we staying true to our values?
6. Have we made accountability and stewardship our guiding principles, seeking to ensure all those who work for us embrace these ideals, or do we think of stewardship as a toothless, thanking office in advancement?
7. Have we let short-term pressures get in the way of imagining and inventing more lasting innovations?
8. Are we staying true to our supporters?
9. Do our fundraising menus reflect our wants more than the beliefs of those who will give most generously within their means?
10. Have we identified and sought out the talents of those whose services we could never afford but who would happily serve our highest purposes?

Such objective reflection is the first step toward building a stronger community of shared purpose—and that goal, not raising more money this year than last year, will allow organizations to surmount challenges and deepen constituent engagement. 

Be Real About Your Relationship with Donors

To understand the process of community building, let’s liken it to the development of an important interpersonal relationship, particularly one that is under strain. In such situations, it takes the bigger person to reflect on what has gone wrong, to see how their actions, albeit inadvertent, have contributed to the growing distance between them and those they value. 

So, if that is you, what do you do to begin to correct the course and get the relationship back on track?

• You share your reflections and regrets with the person you want to keep
• You invite their candor and ask how you can improve the relationship
• You listen, seeking to understand and empathize, not defend
• You suggest and internalize their suggestions on how to create stronger alignment going forward
• You stop making decisions on your own and informing your partner what you want from them, and you start bringing each other into conversations that will lead to mutual agreements
• You become more mindful about your tendency to take the other for granted and try to express your appreciation more often
• You commit yourself to being more open and more vulnerable with them
• You take greater care in making promises and, when you make them, greater diligence in seeing them through
• You notice that things get better if you have a good partner; if they don’t, you look for another

Good donor relations are nothing more than good human relations writ large. The same precepts apply. When we assume that one is markedly different than the other or that we can do something in the name of fundraising and donor relations—like plot how we can bend supporters to our will—that we as conscientious people wouldn’t dream of doing in an interpersonal relationship, we sow the seeds of division and mistrust.

Show Supporters You’re a Trustworthy Partner

As with our most intimate interpersonal relations, donor engagement and donor relations must be oriented toward sharing a brighter future together. That must be evident from the very beginning. Organizations must:

• Begin the process by listening, then seeking conceptual alignment
• Offer optimistic and attainable goals and aspirations
• Show that their eyes are on the horizon and they are seeing what is coming with bright realism
• Commit to building philanthropic partnerships, not just securing gifts
• Project a promising societal ROI when requesting funds
• Help donors believe, belong, and better the human condition

If it is to reach its full expression, philanthropy should be about the search for better ways and promised lands. The greatest philanthropic commitments gravitate to optimists with a compelling plan and to those who show the determination to go after and stay after something big, important, and lasting. You can’t just want more for yourself or your organization; you must see a way of better serving a higher purpose through the auspices of your organization.  

As philanthropy evolves and becomes increasingly challenging, you must be able to describe where and how specific donated amounts, in part and in whole, will yield higher thresholds of achievement and you must become the “culture carrier” for your cause, someone who embodies what your organization stands for.

The post Philanthropy Is for the Optimists: How to Build a Shared Sense of Purpose first appeared on The ENGAGE Blog by Blackbaud.

• The board member who owns an advertising agency and offers a discounted rate to the organization to design materials for their gala
• The Executive Director whose husband is a cybersecurity consultant and can identify any potential issues with the organization’s data collection
• The external reviewer who volunteers for the nonprofit that applied for the grant he’s helping with

These conflicts all start with good intentions, but without the right safeguards, they can undermine your organization’s transparency. This is why you need a conflict of interest policy.

When you’ve documented and implemented a strong conflict of interest policy, you protect your team, ensure ethical decision-making, and strengthen your reputation among grantees and stakeholders.

We talked with Adriana Cosgriff of Capacita, a consulting company that builds capacity for foundations and nonprofits, on why this essential tool deserves your attention—and how it can be tailored to fit your grantmaking organization’s unique needs.

Building Trust and Integrity Through a Well-Defined Conflict of Interest Policy

A conflict of interest (COI) policy is more than just a document—it’s a vital safeguard for your grantmaking organization, so decisions are made with integrity, transparency, and fairness. It helps you navigate complex relationships, maintain legal compliance, and solidify the trust of your stakeholders. Whether you’re working with board members, leadership, or external grant reviewers, a COI policy provides clear guidance on how to address potential conflicts, so everyone is operating in the best interest of your mission.

When your leadership, potential hires, and reviewers disclose and address conflicts upfront, it creates an environment of openness, which reassures your grantees, donors, and other stakeholders that your organization’s decisions are impartial and grounded in fairness.

“I think if you are exercising this power in civil society, in being responsible for decision making in a grantmaking organization, you need to be able to demonstrate how you are acting with integrity, and how you are exercising your charitable purpose conscientiously,” Adriana said. “And so, in practice, it’s being able to say we have a policy. This is what it looks like. This is what it protects, and this is how we deal with inevitable human conflicts.”

From a legal perspective, a COI policy is an essential compliance tool. Adhering to legal standards such as federal IRS requirements or state regulations is non-negotiable. A clear policy helps you define roles, outline procedures, and avoid any missteps that could jeopardize your organization’s standing or tax-exempt status. Proactively addressing potential conflicts helps your organization operate within the bounds of the law, reducing the risk of penalties or reputational damage.

Key Elements of an Effective Conflict of Interest Policy

A well-crafted COI policy helps establish clear expectations, provides a framework for managing potential issues, and protects your organization’s integrity. Here are the key components your policy should include to effectively address conflicts of interest:

Disclosure Expectations

Your policy should clearly outline the expectation that individuals disclose any actual, potential, or perceived conflicts as soon as they arise. This includes financial, relational, or other non-financial conflicts that might compromise impartial decision-making.

“I love in legal ethics this idea of avoiding even ‘the appearance of impropriety,’” Adriana said. “The idea is to avoid anything that has a whiff of being improper. And that’s such a great way to think about the less obvious things that could get you in trouble, or what should be disclosed in conflicts of interest.”

For example, imagine your organization needs to hire a consultant to clean up your CRM data. A board member offers the name of someone they worked with in the past and, in accordance with the COI policy, discloses that not only did the consultant do great work, but they are also friends. So, the organization can move forward with that information.

Conflict Management

Once a conflict is disclosed, your policy should specify a clear process for addressing it. Often the conflicted individual will recuse themselves from discussions or decisions related to the matter. Your policy might also include steps such as appointing a neutral party to explore alternatives or requiring additional vetting to verify decisions are based on merit rather than personal influence.

For instance, if a grant reviewer discloses a connection to an applicant, the organization might assign the review to another team member or seek external input to verify the grant review process remains unbiased.

The goal is to handle conflicts in a way that preserves the integrity of your organization’s decision-making while still allowing all parties to participate in appropriate roles.

Processes for Undisclosed Conflicts

Even with the best intentions, conflicts may go undisclosed—whether due to oversight or a lack of understanding about what constitutes a conflict. Your policy should outline steps for identifying and addressing these situations. This could involve discussing the issue with the individual involved, reviewing the circumstances with a governing board or committee, and implementing corrective actions as needed.

The policy should also emphasize that failure to disclose a conflict may result in consequences, such as removal from a position or reassignment of duties, to uphold accountability.

Industry- and Impact-Area-Specific Language

A COI policy is not a one-size-fits-all document. It must reflect the unique operations, challenges, and goals of your organization. Your policy should be customized to address the types of relationships and decisions specific to your work.

For example, a nonprofit focused on community health may encounter situations involving local hospitals or pharmaceutical companies, while a policy-oriented organization might face political or advocacy-related conflicts. These specifics dictate the type of language and processes that should be included in your policy.

Talk with your attorney—don’t rely on Google. This critical step ensures your policy is both practical and compliant with legal requirements.

Best Practices for Implementing a Conflict of Interest Policy

Implementing a COI policy effectively requires more than just drafting a document. It should be embedded into your organization’s culture and processes.

“Communication and transparency for me go hand-in-hand because so much of good leadership requires good communication,” Adriana said. “And in this case, it’s even more important because it is the right thing to do—and it’s the law.”

1. Get Legal Counsel

While templates can offer a useful starting point, they are not tailored to your organization’s legal obligations or operational realities. Relying solely on internet searches or generic documents risks missing crucial elements required for compliance. Instead, work closely with legal counsel to develop a policy that aligns with state and federal laws and accounts for the specific needs of your organization. As Adriana noted, “You don’t want to be noncompliant by accident just because you weren’t paying attention. That’s not a good excuse.”

Legal counsel can guide you through complex regulations such as IRS requirements for nonprofit organizations, state-specific rules, or industry standards. They can also help you refine processes for addressing undisclosed conflicts to provide accountability while protecting your organization’s reputation.

2. Set Clear Expectations from the Start

Every new board member, leader, or grant reviewer should receive a copy of your COI policy during recruitment or onboarding and be encouraged to discuss any potential conflicts at the outset. By setting clear expectations early, you foster an environment of transparency and accountability.

Walk individuals through the policy, so they understand what qualifies as a conflict and the steps to disclose and address it. This not only empowers them to comply but also helps eliminate confusion or hesitation down the road. Make the conversation interactive—invite questions and clarify how the policy applies to their specific role.

3. Keep Policies Current with an Annual Review

Laws and organizational processes can change, and your policy should evolve to reflect these shifts. Use the annual review as an opportunity to revisit and update the policy—alongside your legal counsel—so it aligns with your organization’s mission and any legal requirements.

During these reviews, ask stakeholders to complete an annual statement affirming they’ve read, understood, and agreed to comply with the policy. This ongoing affirmation provides a moment for individuals to identify any new conflicts that may have arisen since their last disclosure.

Annual reviews also serve as a chance to reinforce the importance of the policy across your team. Incorporate these discussions into board or staff meetings focused on governance to keep the topic visible and top-of-mind.

Integrity and Trust in Grantmaking Through Effective COI Policies

An effective COI policy is a cornerstone for ensuring transparency, fairness, and ethical decision-making in grantmaking organizations. By addressing potential conflicts upfront, organizations safeguard their reputations, protect stakeholders, and uphold the trust placed in them by grantees and the communities they serve.

Take proactive steps to implement and review your policy and empower your team to make informed decisions that are above reproach. Protect your organization, your stakeholders, and your charitable mission by prioritizing a COI policy that works for you. If you’re ready to refine or evaluate your approach, consult with your legal advisors and explore best practices to strengthen your governance framework today.

Internal controls, like your COI policy, are instrumental for creating consistent workflows that help you mitigate risk. Want to learn more about the importance of internal controls for grantmakers? Check out our guide, Internal Controls for Grantmakers: How to Drive Operational Efficiency for Better Outcomes.

The post Conflict of Interest Guidelines Every Grantmaker Should Follow first appeared on The ENGAGE Blog by Blackbaud.

Internal controls are an area of heavy focus during financial statement audits. Having a strong set of internal controls can make the audit process smoother for your organization, with fewer audit findings.

Why Your Organization Needs Effective Internal Controls

An effective system of internal controls is essential for any nonprofit organization, whether you are required to have an annual financial audit or not. By implementing and maintaining strong internal controls, you can protect your organization from financial loss and reputational damage.

Here are a few reasons why internal controls are especially important for nonprofit organizations:

• Safeguarding Assets: Nonprofits often have limited resources and rely heavily on donations and grants. Internal controls help protect these assets from fraud, theft, and misuse, ensuring that funds are used for their intended purposes.
• Financial Accountability: Donors, grantors, and the public trust nonprofits to manage their finances responsibly. Strong internal controls promote financial transparency and accountability, demonstrating that funds are being used ethically and effectively.
• Compliance with Laws and Regulations: Nonprofits must comply with various laws and regulations, including those related to tax-exempt status, fundraising, and financial reporting. Internal controls help ensure compliance, avoiding penalties and maintaining the organization’s reputation.
• Operational Efficiency: Effective internal controls streamline operations, reduce errors, and improve efficiency, allowing nonprofits to focus on their core mission and programs.
• Risk Management: Internal controls help identify and mitigate risks, protecting the organization from financial loss and reputational damage.

A strong system of internal controls helps your organization run smoothly and creates clear expectations for your staff and leadership.

Internal Controls and Financial Audits

Strong and effective internal controls will make for a smoother audit from start to finish.  Internal controls are crucial for financial audits. They make sure your organization proactively adheres to accounting best practices and are a key focus for auditors to verify their effectiveness. Robust internal controls streamline the entire audit process.

Here are a few elements of internal controls to keep in mind when you are preparing for your audit.

Types of Internal Controls

Internal controls can be categorized into several types. The different types work together to make sure you have processes in place to prevent, identify, and fix potential issues. Your auditor will be looking for all three types.

• Preventive controls are designed to deter errors or irregularities from occurring in the first place. Examples include segregation of duties, authorization requirements, and physical safeguards.
• Detective controls are designed to identify errors or irregularities that have already occurred. Examples include reconciliations, audits, and exception reports.
• Corrective controls are designed to remedy errors or irregularities that have been detected. Examples include backup procedures, disciplinary action, and insurance.

Some of these types can be managed directly within your fund accounting software, such as approval rules to make sure the right people review an expense before it’s paid. But some of these controls, such as what happens if a check is stolen, will need to be part of your process documentation.

Components of Effective Internal Controls

For each of your internal controls, your auditor will be looking to see if they are set up correctly and effectively. Below are the key components of internal controls:

• Your control environment sets the tone for the organization’s commitment to internal controls, including ethical values, management philosophy, and organizational structure.
• A regular risk assessment involves identifying and evaluating internal and external risks that could affect the organization’s ability to achieve its objectives.
• Your control activities are the specific policies and procedures you implement to mitigate risks and achieve organizational objectives, such as spending limits on your purchase cards.
• You need information and communication systems and processes in place for collecting, processing, and communicating information relevant to internal controls.
• Monitoring systems provide ongoing evaluation of the effectiveness of internal controls and making necessary adjustments.

Implementing Internal Controls

If you are putting internal controls in place for the first time, or you want to establish new controls, here are a few important steps to implementing internal controls.

• Assess Risks: Identify the risks that could impact the organization’s operations and finances.
• Develop Policies and Procedures: Create written policies and procedures that address identified risks and outline control activities.
• Train Staff: Provide training to staff on internal control policies and procedures.
• Monitor and Evaluating: Regularly monitor and evaluate the effectiveness of internal controls and make necessary adjustments.

By implementing strong internal controls, nonprofit organizations can ensure the responsible and effective use of resources, maintain financial integrity, and achieve their missions, ultimately making a greater impact in their communities.

Internal Control Checklist for Your Financial Audit

With good preparation, your annual financial audit can be straightforward and stress-free. Below is a checklist of key areas that you should review when establishing or evaluating your internal control system before an audit.

These are areas that external auditors will focus on when conducting their audit procedures. Taking the time to ensure that these areas have appropriate controls will go a long way towards making the audit process smoother for all who are involved.

• Segregation of Duties:  No one person should have control over all aspects of a financial transaction. Different individuals should be responsible for authorizing, recording, and reconciling transactions to prevent fraud and errors.
• Cash Management: Cash is the most liquid asset and therefore most susceptible to theft. Implement strict controls over cash handling, including proper authorization for disbursements, regular bank reconciliations, and surprise cash counts.
• Grant and Donation Management: Ensure that grants and donations are properly recorded, tracked, and used for their intended purposes. Maintain documentation of donor restrictions and ensure compliance with grant requirements.
• Payroll: Implement controls to verify accurate payroll processing, including proper authorization of time sheets, verification of employee information, and timely tax filings.
• Expense Reimbursements: Establish clear policies and procedures for expense reimbursements, including documentation requirements, approval processes, and limits on reimbursable expenses.
• Fixed Assets: Maintain a detailed inventory of fixed assets, including descriptions, locations, and values. Conduct periodic physical inventories to verify the existence and condition of assets.
• Financial Reporting: Prepare accurate and timely financial reports that comply with accounting standards and regulatory requirements. Ensure that your management or board review and approve financial statements regularly.
• Risk Assessment: Regularly assess the organization’s risks and identify potential areas of weakness in the internal control system. Update controls as needed to address emerging risks.
• Whistleblower Policy: Establish a confidential reporting mechanism for employees and volunteers to report suspected fraud or unethical behavior without fear of retaliation.
• Training and Education: Provide ongoing training and education to staff and volunteers on internal control policies and procedures, as well as the importance of ethical behavior.
• Board Oversight: The board of directors should provide oversight of the organization’s internal control system and ensure that it is functioning effectively. This can include, but is not limited to, an annual review of internal controls by this governing body.
• External Audits: Periodic external financial audits by an independent accounting firm can provide assurance on the effectiveness of the organization’s internal controls and identify areas for improvement.

Strong Internal Controls Simplify Your Annual Financial Audit

Remember that strong internal controls are not a one-time project but an ongoing process. By implementing and maintaining effective internal controls, nonprofit organizations can protect their assets, ensure compliance, and build a strong foundation for achieving their mission. And as an added bonus, they can make your financial statement audit a more efficient and effective process for all involved.

Looking for a fund accounting system that helps you implement and enforce strong internal controls? Check out our guide, 3 Ways Your Fund Accounting System Helps Create Strong Internal Controls.

The post How to Improve Your Internal Controls to Minimize Audit Findings first appeared on The ENGAGE Blog by Blackbaud.