Krista Endsley, Sage

The weakening economy has created a ripple effect across all types of businesses, including the charitable sector. Due to funding uncertainties, many nonprofit organizations and government agencies are more hesitant about expenditures, and keeping a closer eye on budgets and cash flows.

Yet, they are under growing pressure to do more with fewer resources, and to provide more transparency and accountability to members, donors, and the people they serve. In addition to following increasingly complex accounting rules, they also have more competition for grants and contribution dollars.

Typically, systems are in place to help each department meet these challenges and work effectively. Key staff members enter, manage, and report on this data, but it can be difficult to pull together snapshots of progress quickly in order to make real-time course corrections.

To help relieve these demands, many organizations are turning to Business intelligence tools to retrieve, organize, and share knowledge for analysis and guided decision-making.

What is Business Intelligence?

Business intelligence, or BI, uses technology to access and monitor information within a department or across an organization, enabling nonprofit professionals to effectively analyze data, and make timely, informed decisions. Using BI tools, complex data is converted into visual, graphic representations, which can be easily understood and communicated by both financial and non-financial professionals.

BI can improve the speed and quality of decision-making by providing real-time information about key performance metrics. These metrics enable management to take a logical approach to decision-making and problem solving. With BI, recommendations to executives, the board, or donors can be supported with facts.

Strengthening Stewardship with Business Intelligence

Nonprofit organizations provide tremendous value to the communities they serve. And, as any nonprofit leader knows, demonstrating value to donors and constituents is critical. Here are just a couple of ways that BI can strengthen stewardship and organizational performance:

1) Tracking Key Performance Indicators:

Just as blood pressure, heart rate, and temperature can help determine a person's overall health, key performance indicators, or KPIs, can check an organization's overall health. KPIs gather the most critical metrics for an organization, and BI tools can help monitor an organization's performance.

With financial dashboards, financial managers have access to data that can help them make timely tactical and strategic decisions. Having up-to-the-minute information on actual expenses against budgets allows program managers to see where they are at any point in time. They no longer have to wait until month-end reports are delivered to see where they stand. Likewise, development professionals can easily analyze campaign results, giving and demographic trends, solicitation cycles, and major gifts pipelines. These KPIs can help organizations develop more effective fundraising strategies and monitor fundraising efforts.

While KPIs check the pulse of an organization, BI tools enable nonprofit professionals to interact with this data in real-time. Slicing and dicing, and drilling up, down, and across information segments, to fully analyze financial and fundraising trends is a critical component to uncovering potential opportunities or pitfalls.

2) Improving Communications and Information Sharing:

BI empowers an organization's departments and segments to retrieve timely data, so that its executives and board get a complete view of operations. The ability to present information through visual aids simplifies the traditional approaches to reporting and analysis.

BI tools make it possible to pull charts and graphs for presentations instantly. Program and development staff can show funding sources at a moment's notice, or use this information when creating grants requests and annual reports. Executive directors can employ the visual aids to provide factual support for recommendations to the board and other key presentations. What's more, staff members don't have to be financial experts, or even involved in day-to-day fundraising activities, to see how the organization is performing, enabling all staff and board members to be fully engaged.

By having precise, up-to-date information at their fingertips, nonprofit professionals at every level can gain a deeper insight that allows them to strengthen stewardship, improve agility, and, ultimately, secure the success of their organization. BI can quickly become a nonprofit's best friend.

Krista Endsley is senior vice president and general manager for Sage North America's Nonprofit Solutions business, which develops such award-winning products as Sage MIP Fund Accounting and Sage Fundraising 50. Please visit www.sagenonprofit.com for more information.