Why nonprofit management software is fundamental for transparency

Nonprofit management software can help organizations keep closer track of operations.
Date Published
04/16/2014

When nonprofit organizations fail to keep a close eye on their financial situation, they run a high risk. From the executive director to volunteer staff members, it’s important for nonprofits to make sure everyone is aligned and understands how their role influences the performance and success of the organization. The Boston Globe recently published an article looking at the way the American Academy of Arts and Sciences mishandled the organization’s finances during the time that Leslie Berlowitz was the acting president.

Lack of oversight
An internal investigation released in March 2014 highlighted the fact that Berlowitz was able to increase her salary by $2.2 million during her 17 years as head of the organization. She resigned after coming under significant scrutiny, although AAAS board members lauded Berlowitz for her ability to improve fundraising campaigns and generate greater exposure for the nonprofit in the public, explained the Nonprofit Quarterly. The organization is well-known for its membership, which is made up of Nobel and Pulitzer Prize winners.

However, there were apparent signs of mismanagement and lacking scruples on the part of Berlowitz, and the board of directors likely paid more attention to the revenue brought in during fundraising campaigns instead of looking at the bigger picture, the Quarterly suggested.

One of the lessons that many nonprofits should learn from this scenario is the need for proper record keeping and managing data in various aspects. For instance, nonprofit management software gives charitable groups the power to maintain information pertaining to donations in a database that works seamlessly with other key record-keeping documents and resources. When information is siloed in various departments, there’s a better chance that either staff members will make mistakes or knowingly use the situation for personal benefit. However, when nonprofits have the right software and infrastructure in place, they better safeguard against financial miscues and ensure the organization maintains ethical and sustainable practices.

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