Abila Predicts Key Nonprofit Accounting Trends for 2016
Growth, building strong teams, and partnering opportunities push nonprofits forward
January 6, 2016 – AUSTIN, Texas – Abila, the leading provider of software and services to nonprofits, associations, and government entities, today shared the trends it predicts will have the biggest impact on nonprofit accounting in 2016: Focusing on growth versus sustainability; building strong, maintainable teams; collaborating between departments; partnering with for-profit companies and looking for private investment; and concentrating on fraud and data security will continue to be big topics.
“Dollars and people are the key themes for nonprofit accounting going into 2016,” said Dan Murphy, product manager for Abila MIP Fund Accounting™. “Growth of the organization, whether through new funding sources or revenue-generating partnerships, is going to be essential. Additionally, building strong, lean teams with an eye on succession planning is going to be top-of-mind for many organizations, as well. Nonprofits that can find the right balance of collaboration, growth, and personnel are going to be well positioned for success now and in the future.”
- Focus on Growth (vs. Sustainability): Based on Abila’s recent Nonprofit Finance & Accounting Study, more than 70 percent of nonprofit organizations say they expect to grow in the next three years. This shift in focus will have major impacts on strategic planning, budgeting, and decision making at nonprofits. An area of expected growth for nonprofits is consolidation between organizations with similar missions to pool monies and resources.
- Nonprofit Accounting Workforce Transforming: According to Wolters Kluwer CCH Preparedness Survey, 75 percent of members of the American Institute of Certified Public Accountants (AICPA) will be eligible to retire in four years (by 2020). Additionally, in Abila’s Nonprofit Finance & Accounting Study, most finance teams at nonprofits report seeing a strong trend toward smaller, leaner finance teams. As seasoned individuals retire and teams become smaller and leaner, nonprofit finance teams will need to focus on succession planning and bringing Millennials into the fold to ensure strong, stable teams now and in the future.
- Collaboration is Key: Collaboration between departments, especially between fundraising and accounting departments, will be essential in 2016 to help organizations get beyond day-to-day, tactical thinking into a more strategic frame of mind to ensure growth and stability for years. Tighter collaboration between departments also necessitates tighter integration between technology and software systems, particularly fundraising and fund accounting.
- For-Profit Partnerships Will Be Forged: More and more, organizations will seek out for-profit partnerships as corporations look to raise their social profile and nonprofits look for new revenue streams. One such program that may be more broadly explored by nonprofits is the Pay for Success program where investors front money to a nonprofit organization for a particular initiative and are repaid by the United States government if the initiative is deemed a success.
- Fraud and Data Security Continue to Be Issues: Fraud will continue to be a big issue for nonprofits, along with data security. According to a recent study by the Ponemon Institute, nearly half of all data breaches are connected to criminal insiders. Key countermeasures and purpose-specific technology will play an important role in helping organizations mitigate fraud and alleviate data security issues.
“2016 will be a crucial time for many organizations to solidify their growth and people strategies,” said Murphy. “As the economic landscape continues to develop and evolve, nonprofits – and particularly nonprofit finance departments – need to have a clear vision to ensure the organization is exploring every feasible revenue avenue to deliver on its mission.”
Abila is the leading provider of software and services to nonprofits, associations, and governmental entities that help them improve decision making, execute with greater precision, increase engagement, and generate more revenue. With Abila solutions, association and nonprofit professionals can use data and personal insight to make better financial and strategic decisions, enhance member and donor engagement and value, operate more efficiently and effectively, and increase revenue to better activate their mission. Abila combines decades of industry insight with technology know-how to serve more than 8,000 customers across North America. For more information, please visit www.abila.com.