Gaining Leadership Approval for Major Technology Investments: A Practical Guide for Nonprofit CFOs

In the nonprofit sector, both time and money are always limited so you have to strike the right balance between mission-oriented activities and backend operations. Your ultimate goal is to channel as many resources as possible toward your mission. However, having the right backend infrastructure helps you make informed decisions and streamline processes that benefit the organization in the long run.

As a CFO, you know your organization needs to invest in your technology infrastructure. But how do you justify spending money on a budgeting tool instead of supplies for an after-school program?

Here are a few considerations when advocating for technology investments in your accounting and finance departments.

Understanding the Importance of Technology Investments

A common obstacle in technology investments is the perception of a binary choice: money can either be spent on “X” or “Y.” However, the right technology investments require a long-term perspective. For example, during the pandemic, nonprofits that invested in paperless processes and technology were better positioned in February of 2020 compared to those that scrambled to adapt to remote work. Some nonprofits had to drive printed checks around town collecting signatures, while others had already transitioned most of their vendors to electronic and automatic payments.

Organizations that embraced technology investments earlier were able to pivot more seamlessly. While backend investments may not grab headlines or appear flashy, they are essential for ensuring the organization can quickly adapt to changing circumstances.

Link Technology Investments to the Organization’s Strategic Plan and Objectives

To make a strong business case for any technology investment, you need to ensure that the proposal benefits not only the finance team but the organization as a whole. Consider how the investment will impact processes or reporting, and how it will benefit key stakeholders, to make your case even stronger. Here are a few points to consider when linking your proposal to your organization’s strategic plan:

Map out Strategic Goals

Begin by clearly identifying and outlining your nonprofit’s strategic goals and objectives. These might include mission-related outcomes, operational efficiency targets, or capacity-building initiatives. Would this investment speed up budgeting, provide more accurate data, or mitigate risk? Be sure to clearly lay that out. Aligning finance with the rest of the organization can go a long way. Too many finance teams don’t think of the organization as a whole, which can hurt your case for technology investments.

Technology as an Enabler

Explain how the proposed technology acts as an enabler to achieve these strategic goals. For example, if one of the strategic goals is to enhance service delivery, demonstrate how a new case management system can streamline processes and improve client outcomes.

Where possible, put numbers to these outcomes. If your team saves three hours a week with the new software, what does that mean for employee satisfaction, improved decision-making, or increased capacity?

Integration with Current Plans

Show how the technology investment integrates seamlessly with the existing strategic plan and highlight any specific initiatives or projects that the technology will support. This can even include how it will supercharge another department’s forward momentum with new tools.

If your new fund accounting software integrates with your fundraising system, your development team could have more transparency into how funds were spent. That can improve their donor stewardship, building trust and increasing recurring gifts.

Build a Compelling Business Case

While most nonprofit finance leaders understand the importance of technology, presenting a compelling case to executive leadership or the board can be more challenging. Limited funds and time often mean that investing in technology can take away from program activities. However, a strong business case can demonstrate the value of the investment.

Here are some key points to keep in mind:

• Clearly Define Goals: Outline the primary goals of the investment, both for the finance department and the organization as a whole.
• Highlight Current Challenges: Explain why the current systems are inadequate and how the new investment will benefit the entire organization, not just the finance department.
• Engage Stakeholders: Solicit feedback from other stakeholders within the organization. Successful investments often involve processes that span the entire organization. This can also be an area to get creative! Can other departments use these new systems and benefit from what finance is proposing? If development and finance can both benefit from a tool, then the case is stronger coming from multiple departments.
• Provide a Timeline: Present a clear timeline for implementation and rollout. Demonstrating that the process is well thought out can significantly strengthen your case.

Prepare for the Approval Process

Establish thoughtful stewardship of funds when making any investment, especially in technology. Making the wrong investment can set an organization back years. To mitigate this risk, ensure that your organization examines all options and thoroughly thinks through the process.

Collaborate with third-party consultants, peer organizations, and industry associations to save time and provide valuable insights at every stage of this significant decision. Have a well-defined plan and keep organizational goals in mind. You’ll want to present all your work and decision-making to your board as a cohesive story.

Be Prepared for Change with the Right Technology

Investing in technology can be daunting, but it is often necessary for an organization’s growth and expansion. Making a strong case today can help your organization stay ahead of the curve, rather than waiting until change becomes unavoidable. A clear and concise case for technology is as important as finding the right technology for organizational buy-in.

Want to learn more about how to get leadership buy-in for your organization’s technology investments? Check out our webinar, Making the Case for Tech Investments: A Nonprofit CFO’s Guide to Winning Board Approval, a part of our Ultimate Nonprofit CFO Series.