Advocacy is an essential benefit that associations can provide for their members, yet the complex policy environment can make it challenging for associations to have their message heard by decision-makers. With so many voices vying for attention, it’s essential that associations bring a strategy to their advocacy efforts that allows them to be heard above the noise. For many associations, research provides this advocacy edge. By bringing objective data into the discussion, associations can back claims with proof points, significantly enhancing the effectiveness and credibility of their advocacy efforts. With a clear strategy for data collection and analysis, associations can effectively leverage research among various stakeholder groups to influence policy to align with their mission. Research Can Build a Case for Advocacy To build a strong case for capping the price of insulin, a prominent health advocacy organization connected with a third-party consultant to secure input from insulin users. The survey was distributed using a strategy that ensured results would mirror the general population and represent nationwide insulin users. Among other things, the survey asked respondents to share whether they had ever had to make a choice between paying for insulin over other necessities. With this data, the organization was able to quantify the hardship rising drug prices placed on insulin users. It provided the proof needed to show lawmakers that the rising costs of insulin were causing users to forgo purchasing this life-saving medication. With research, the organization's leaders proved able to effectively advocate for the changes that would ultimately drive state and federal legislation to cap insulin out-of-pocket payments for vulnerable populations. Quick Insight Can Lead to Lasting Impact Research doesn’t necessarily have to be extensive to drive action. In fact, brevity can help increase your response rate  and rapidly turn data into action. Speed was an essential element of research for our client when it learned that Congress wanted companies in their industry to stop doing business with certain foreign contract partners. The organization knew it needed to speak up for its members, but had less than a month to get the data needed to protect their interests. For fast results, they contracted with a third-party consultant to craft approximately a dozen questions to get to the heart of members' concerns. The data collected from members provided insight into the challenges the industry faced in replacing their manufacturing sources and the potential impact this would have on consumers. The member survey found that 79% of survey respondents held at least one contract or product with manufacturers from the country in question. Survey respondents shared that they would need up to eight years to switch manufacturing partners in order to minimize the impact on U.S. consumers. This combination of research and advocacy helped shape the organization's testimony before the House of Representatives Small Business Committee, and the recommendations adopted in subsequent legislation. It also provides proof that surveys don't need to be exhaustive in order to glean valuable insight. Research Can Prioritize Strategic Action In shaping the research needed to advance advocacy, associations should begin with their end goal in mind. This goal will shape questions asked to uncover the information that will drive action. Yet when the end goal is particularly large, an association may need to prioritize a range of actions. Member research  can help associations better understand their members’ priorities, concerns, and willingness to take action. This insight can prioritize action and help tailor future advocacy efforts to deliver the maximum value to members. For example, when two health-focused organizations partnered to tackle childhood obesity, they needed to first identify the strategies most likely to drive action among their target constituents. With insight from the general population, the organizations could then take specific strategies to decision-makers with evidence that the general population would support action. Adopt Research and Advocacy Best Practices Research and member insights are powerful tools for strengthening advocacy efforts. When leveraged appropriately, the research your organization conducts to members’ benefit  can also be used to support speaking points, adapted for use in trade or consumer media, and otherwise used to magnify your message. However, in shaping this research, associations must carefully design surveys to ensure they reliably represent the target population and reflect constituents’ concerns. A consultant can help maximize the chance of securing statistically significant and appropriately useful data from a representative group. If you’re ready to take action on the issues that matter to your members, Vault can help secure the data you need to build your case. The first step to achieving your advocacy goals is to contact us  today.

Grant and donor funding is the lifeblood of many nonprofit organizations. Yet too many nonprofits are lacking the strong financial management foundation that gives donors confidence that funds will be used effectively and in keeping with all program requirements.   Professional financial management isn't just about keeping books. It can be a strategic asset that directly enables fundraising success. Professional financial management establishes the foundation of accounting expertise, proven systems, and credibility needed for nonprofits to secure and maintain funding relationships. With the right approach, this “cost center” can play a central role in supporting future fundraising.   The Complexity of Donor Requirements  With more competition  than ever for limited donor funding, nonprofits must be able to demonstrate their ability to manage complex financial requirements even with limited resources. Donors want to see a history and pattern of solid financial management that gives them confidence in a nonprofit's ability to meet strict reporting requirements.   And those requirements can get incredibly strict as donors work to ensure their money will go towards the critical deliverables of the projects they support. Some donors may want reporting that provides the total number of hours worked on a project while others may request to see timesheets for funded projects. Many donors have stringent restrictions on the amount of overhead that can be charged to contracts. It’s no longer uncommon to see a donor limit overhead on a contract to no more than 20%.   Tracking and reporting these various expenses demands keen attention to detail and the resources to manage a number of moving pieces. But managing these pieces well can deliver a powerful return. For one organization, providing detailed, reliable monthly reports for an exacting donor – a donor that set limits on benefits and overhead rates, as well as strict budget parameters – gave the donor confidence that the organization could manage a second award. Following an initial award of $500,000, the organization was gifted an additional $2 million.  Implement Controls, Policies, and Procedures  Strengthening your organization’s financial management may seem daunting, but it can ultimately serve as an effective way to reduce costs and gain new revenue streams for your nonprofit . That’s because solid financial management strategies can reduce organizational risk and increase efficiency.   The first step of good financial management is to implement strong internal controls . Even with limited resources, organizations can put in place internal controls that ensure proper use of funds, prevent fraud, and reduce the risk of unintentional errors. An   internal controls questionnaire  can help nonprofits better evaluate opportunities to strengthen their controls.   The next step is to create policies and procedures – and a system for ensuring that they are followed. Many awards come with layers of parameters that organizations may have to follow. It’s important to have a plan in place for how your organization will ensure compliance. But it’s also important to ensure that everyone responsible for the use, management, and tracking of funds understands these policies. It’s this last step that too often gets overlooked.  For one organization, lack of processes meant that key compliance information was never delivered to the grant manager. As a result, the grant manager was not providing the required information to the funder. The cost of that oversight amounted to $6 million.   Invest in Solutions for Reliable Tracking  No one knows better than a nonprofit leader that time is money. Automating processes  can help you recoup both. When evaluating your existing financial management processes, consider opportunities to shift from manual processes to automated systems. A number of solutions may already exist in your accounting software that reduces the need for paper documentation and increases your ability to move data across systems.   When it comes to tracking donor funding, however, it’s important to implement a system that tracks that money separately from your nonprofit’s other revenue streams. This is important for any award, but particularly for awards that bring an organization’s total federal funding for the year to more than $1 million, as this limit triggers the Office of Management and Budget (OMB)  threshold for a single audit  (formerly known as an A-133 audit). This audit puts an organization’s federal awards under a magnifying glass. If your organization’s accounting software does not allow you to track funds separately from the rest of your spending, consider working with a professional financial management firm.   Play to Your Administrative Strengths   It’s also important to recognize that the donor pool contributing to your organization can impact how you should structure your internal controls, processes, procedures, and reporting structure. For example, organizations with a few large donors may face more stringent reporting requirements, while organizations with many small donors may need to track a greater multitude of varying reporting requirements. Each comes with their own administrative burden that may require different strengths from your team.  When nonprofit organizations outsource financial management to a professional firm like Vault, they gain the strength of a dynamic team. Vault can help organizations with limited resources strengthen their internal controls and financial knowledge and more effectively compete for funding. To learn more about professional financial management and how to create new revenue streams for nonprofits , contact Vault Consulting .

Research is often positioned as a central part of a trade association’s   value proposition . After all, associations are in a unique position to collect industry intelligence on behalf of their members and provide unbiased output that can help members grow their businesses or plan their next moves. However, many of these same associations struggle to transform the information they collect into a form that provides strategic value for their members.  Why the disconnect? Often, it’s due to a lack of a clear framework for turning data into action. Successful associations don't just collect data – they follow a clear roadmap for turning research insights into strategic action plans that drive measurable member success and industry advancement.  Creating a Framework for Association Research    As an objective third party, associations are in an excellent position to capture data from their members. Members often prove more willing to share sensitive company data with associations as an independent third party that can compile a trove of industry data into reporting that helps inform decision-making.   Yet, associations that start by collecting as much data as possible, with the hope that the value will emerge over time, can quickly find themselves overwhelmed and lacking member support. To ensure your association is collecting data with a purpose, it’s important to put a framework in place to shape your research strategy and focus on data of most interest to your members. With this framework in place, associations can strategically expand their data collection and reporting over time.   With this strategic planning for associations’  research, members will gain clear value by considering the following steps:  1. Prioritize Member-driven Research Effective research is usually driven by members and rarely by association leaders and third-party researchers. Your members know their industry best, so they should be involved in determining what data points will be most useful to secure.   2. Connect Research to Your Strategic Plan At a high level, the most effective association research is driven by – and integral to – the association’s strategic plan and member needs. The association’s mission and values can help guide the types of data that you deliver to inform members’ decision-making. Especially when starting a new research initiative, it is key to have a multi-year plan that outlines how the research can grow, how members can use it to help run their businesses, and how it can promote the overall industry.     3. Put Member Advocates to Work As members speak up about the data that would be of most use to them, encourage those same individuals to get involved in shaping the research direction. A group of member advocates can help launch research programs and maintain value through periodic committee reviews.  4. Start with the End in Mind  Research can (and typically should) be leveraged in a number of ways. It can provide an industry pulse , help demonstrate data trends over time, support benchmarking, drive advocacy , and expand awareness of key issues. Identifying the many ways in which data could ultimately be utilized can shape the amount and level of data collected.  5. Create an Environment that Encourages Member Participation The success of your research depends on members’ participation. Having antitrust guidelines and other legal guardrails in place can encourage engagement by providing members with assurance that their data is safe. Inviting a third party to manage sensitive data is an added step that can give companies confidence that participating in the program will not risk the confidentiality of their data.   6. Keep Reviewing Research Needs As members’ needs change, research programs may need to change as well. For example, programs may need to expand to gather different types of data as new product types hit the industry. In addition, programs launched to provide data on the North American market may expand over time as member companies reach global audiences. To ensure research does not become stale over time, it’s important to establish a timeline for periodic reviews. In order to see this timeline is met, it is important to establish a group, whether a research committee or board-level group, that holds responsibility for this evaluation.  Look Forward to Shaping Strategic Planning    While it is important not to get lost in granular data, strategic planning for associations should also include considerations for curating research data that members may need in the future. Historical data that provides insight into how an industry responded to unusual market conditions in the past can inform decision-making. But getting that value may mean structuring research today with the faith that it may prove fruitful years in the future.    For example, when Vault Consulting began working with Battery Council International (BCI) to collect data on automotive and industrial battery shipments, that data centered on lead batteries, as that solution comprised the majority of the market. However, the association   added lithium-ion battery categories to its shipment reports in 2023 in anticipation of market shifts. While few members had data available in this category, it was already clear that this product marked a new direction for this industry. Including opportunities to provide new product types early would help establish historical data that could, in time, prove valuable in identifying trends. Moreover, collecting this data provided an opportunity to engage lithium battery manufacturers and help expand the value of the association to a new audience.   In this case, association leadership recognized that this information would not likely be ready to publish immediately. However, BCI understood that building a strategic framework to collect new data as this industry sector grew would provide insights that appeal to current and prospective members and help establish their association as a proactive thought leader in an emerging area.   Having faith that granular data will provide value in the future requires solid insight into one’s industry and a forward-thinking mindset. It also benefits from having a partner who can help structure research in a way that maximizes value today and tomorrow. This is an area where Vault Consulting excels. To learn more about how we’re helping associations leverage their research to better serve their members, contact us today to get started!

Financial and accounting systems are central to the success of associations, but they can also present a variety of challenges. If your association is considering accounting automation, you face several choices. In this post, we’ll talk about some of the major trends we’re seeing at our association clients, and ways these trends could inform your decision-making.   1. Reducing or Eliminating the Need for Paper Documentation One of the most significant trends in accounting automation is reducing the need to physically handle documents and manually enter data. The accounts payable function — and specifically, online bill payment — is a good example of accounting automation in action. Although your bank can provide a partial solution to online bill payment, often the related documentation doesn’t automatically transfer to your own accounting software. More effective solutions tend to create their own lifecycle for bill management and payment. These solutions may feature automated approval processes and audit trails as they generate payments, and often sync directly with your accounting software. Staff in operating units can gain greater visibility into their own budgets, and drill down into specific payments whenever they need to.   These solutions can also deliver significant benefits before, during, and following audits. Traditionally, accounting professionals needed to physically track down documents in disparate locations, provide them to the audit team, and refile them afterward. Inevitably, some documents would go missing, leading to frustration and errors. However, when accounting automation solutions are implemented, it’s potentially much easier to locate and share documents needed for audits — and eliminate the need to refile them. Another potential benefit is that you no longer need to dedicate space for document storage, whether onsite or elsewhere.   2. Maintaining Systems that Talk to Each Other  A related trend in accounting automation is ensuring that different systems within the organization can talk with each other. With team members working remotely and collaborating virtually, increasing the risks of double-entry and other types of human error.   Association management may assume that effective integration requires little more than choosing a good accounting software platform and then pushing a button. In reality, it’s a complicated, time- and resource-consuming process, with many moving parts. That said, the benefits can also be significant. For example, many of our clients have reported that with tighter integration between their accounting software and other systems, their internal customers feel an increased sense of ownership over their financials, with greater control and faster answers to their questions.  3. Selecting Systems that Can Grow with Your Organization  For organizations whose accounting systems are older or less flexible, updating their systems and reporting tools to reflect such changes can be very difficult.  If your organization faces such decisions, it’s important to know that some software manufacturers effectively “lockdown” their systems so that users cannot make the kinds of fundamental changes just mentioned, while others are more flexible, and even encourage third-party software providers to introduce products to make their systems more functional.   4. Moving to Cloud-based and SaaS Systems  Another related decision associations face is whether to move to cloud-based and/or Software as a Service (SaaS) systems. While we’ve seen this trend for a number of years, it is becoming increasingly acute, especially in the area of data security. In the past, many associations could afford to have systems that lagged behind their software providers’ most recent build. But with the increasing risks of hacking and ransomware attacks, keeping one’s system current is more important than ever. Cloud-based and SaaS systems address this need by ensuring that an association’s security profile is always as up-to-date as possible.   It’s also helpful to understand that there is a continuum of SaaS models. On the simpler end, there are products such as QuickBooks Online; on the more robust and flexible end, there are systems such as Sage Intacct that may be better suited to the task.  5. Using Training to Ensure that Your Systems are Being Utilized to Their Potential  In our experience, many associations have barely scratched the surface in terms of what their people can do with their accounting technology — and the solution can often be found in training. Many of the best accounting software providers have scaled back or eliminated their training offerings. Fortunately, a robust ecosystem of third-party training providers can fill in this critical gap.    When selecting a provider with expertise in your particular accounting system, one helpful approach can be to join a relevant user group, which can be readily found through ASAE, or through various CPA organizations. We’ve also seen associations save money by taking part in group training; although the training is not customized, it does come at reduced costs that can make it a more sustainable solution.   Good Luck on Your Journey  Not every association will place the same emphasis on these various trends in accounting automation, but keeping them in mind as you review your options can be a strategic plus. In essence, using the limitations and challenges presented by the pandemic to guide the development of your accounting system can be an effective way of making lemonade out of lemons.   Best of luck as you plan your organization’s future technology profile! If we can assist in any way, please don’t hesitate to reach out. Contact us  at Vault Consulting anytime, and we’d be happy to help.

Tracking your association members’ product sales data can provide valuable insight into current trends. The timelier and more accurate the data you secure, the greater value you can deliver. However, busy member companies do not always have the time or resources available to regularly compile or accurately categorize their sales data.   Fortunately, associations now have data automation solutions available to make this process easy and accurate for their members. With more efficient tools and technology, both associations and members win.   Data Automation Solutions Help Make Sense of Big Data   Organizations today are able to collect large amounts of data to help track trends and drive business decisions. However, one challenge with vast amounts of data is sifting through the information and pulling out the most valuable nuggets. This is one key area where associations find model-based reporting solutions provide tremendous value to their members.   Using form-driven data collection, associations have had to guess what product sales data might be of most value to their members. If they wanted to provide the latest trends on lampshade offerings, for example, the association would create a form that asks members to report their sales for beige, blue, black, and white lampshades.   Model-based reporting eliminates the need to guess what’s important to members. Instead, it allows associations to collect all possible details by securing data at the SKU level. Once data has been collected, it might indicate that there are hundreds more options of lampshade colors than association staff ever thought possible to report. This data modeling can reveal unexpected insight into consumer demand and how manufacturers are meeting expectations.   There’s tremendous value to be found in sifting through what, for some organizations, may amount to millions of points of sales data, but gathering this insight carries significant challenges.  Break Down Barriers to Data Collection Manufacturers know with confidence the attributes of a given product at the SKU level, as well as where that product is and whether it’s heading to a distribution center, store, or customer. Compiling that data for reporting, however, can be difficult.   Before a company can make sense of its sales data, that model information must be aggregated into a usable format. Today’s data automation solutions aim to simplify this submission process. Associations may offer a secure portal through which members can upload data in Excel or other file formats most convenient for the organization. While this simplifies the process, it does still place a burden on data reporters to deliver accurate information on a regular basis.   Model reporting is reliant upon the correct categorization of SKU information. Once this initial effort is complete, however, the ongoing reporting process is simple. Returning to the example above, instead of having to break out monthly lampshade sales by color, participants are now only required to provide their sales at the SKU level. All of the mapping to the appropriate reporting categories is handled behind the scenes. However, this requires that companies provide detailed information whenever they add new SKUs to the report. As a best practice, organizations should review all model details at least on an annual basis.  Another challenge with SKU-level reporting is ensuring accuracy in managing so many data points. For one association, this challenge meant that data listed in a weekly report might be amended by the time monthly reports were made available. Due to manual data entry methods, it was not feasible to trace the cause of these errors. For this particular organization, automating model-based reporting prevented data entry errors and provided greater transparency into other potential reasons for shifts in data.   Simplify Model-based Reporting     Automated data automation solutions can simplify the process of submitting timely, error-free data. It is easier than ever for associations to securely connect to members’ systems directly via an application programming interface (API) that automatically transfers SKU model data based on a preset schedule. While this type of data modernization program requires upfront work to develop machine learning tools that will track hundreds, thousands, or even millions of lines of data, it ultimately removes many hurdles to member participation and ensures more timely reporting. This automation also frees up association staff to analyze the data now at their disposal and act upon the insight they’ve gained.    Given the proprietary nature of this model data, many organizations opt to turn to a third-party consultant to compile this information. This distance can provide security assurance for association members. At Vault, we help associations by compiling and appropriately categorizing SKU-level data and crafting the integrations that allow diverse member systems to connect directly with association reporting tools. We also audit these solutions to ensure that associations have the reliability they need in industry reports that will drive big business decisions.   To learn more about how you can provide more accurate data, faster for your members, we invite you to download our free guide, Association Trends: Modernizing Data Offerings for Fast-Paced Decision Making .  Feel free to contact Vault Consulting  if you need any guidance or support.

This post discusses some underlying strategies for guiding and supporting member engagement. Among your most important value propositions to members are how you help them engage with others in their industry. Effective engagement addresses multiple member needs — Fostering their growth and professional development Building their professional networks Gaining greater visibility for themselves in the industry When you succeed at fostering engagement, you not only meet the member’s immediate needs, but you also strengthen your organization’s brand as a critical resource in the industry. By adopting the following industry best practices, you can encourage and reward engagement and make it a vital part of your organization’s culture. 1. Create an Engagement Ecosystem One way to increase member engagement is to treat it as an ecosystem — an interconnected array of opportunities, programs, and services that offer value to members no matter where they are in their career. Just as in an ecosystem in nature, the various elements connect with and support each other. [Example] To serve members who have just started in their careers, your engagement ecosystem might include a peer mentorship program, where more senior members volunteer to talk one-on-one with the younger members, answering questions and providing advice. As members grow more experienced, you can offer them additional opportunities, such as joining a task force, committee, or even a board. Later still, they might even be encouraged to mentor a younger member themselves, bringing their engagement journey full cycle. 2. Keep the Communication Flowing Use communication to drive engagement by creating relevant messaging everywhere that members could possibly go to get started. This means your website needs to clearly direct and provide paths for members to follow if they want to engage more with their community peers. It also means having supporting messages clearly articulated on your LinkedIn and Facebook pages and any other social media platforms where your members are active. Another strategy to increase member engagement is to say that you want to help members celebrate career successes. Beyond straightforward recognition in a newsletter or discussion list, some associations have successfully created targeted awards or recognition programs. [Example] One of our clients established an annual safety recognition program for companies that had met safety regulations for the previous year. Members complete a brief survey on a multipurpose portal where they can also access other membership resources. Each recognition program will look a little different based on the particular industry and the needs of your members. It usually doesn’t take a lot of resources or staff time to support such a program, but it can mean a lot to members to be recognized among their peers. 3. Use Member Personas to Improve Engagement Your organization is in a unique position to offer opportunities for members to share information and build business connections and peer networks. The key is understanding your audience’s needs and personas and ensuring you offer something for all the major personas that collectively define your membership. [Example] It’s a smart idea to promote engagement connections and options that appeal to all the different age bands within your membership. Gen Xers, Millennials, and Gen Zers have all embraced social media but differ widely in their choices of platforms and the extent to which they use them. Your membership, communication, and marketing staff should be on the lookout for emerging trends in communication preferences and ensure that you’re highlighting engagement opportunities on each, with links back to relevant resources. 4. Offer Discussion Lists or Bulletin Boards Another popular way to increase member engagement is to host and promote a discussion forum or bulletin board as a member benefit. Offering such a venue can take relatively little effort from staff. Yet, allowing members to both ask and answer questions can significantly increase the value of membership. You can make the discussion forum more effective by establishing and enforcing clear rules. Many associations prohibit certain types of announcements, such as members trying to promote their own company’s services or upcoming events. Ideally, the discussion among members will create its own buzz and energy. If you notice that activity has slowed down, it may help to throw out a provocative idea occasionally and ask members to share their opinions about it. Examples include new programming that members would like to see the association offer, questions they have about the association, and others. This type of insight can also help generate ideas for future programming or member resources. Time to Re-energize Your Engagement Efforts? Often, engagement does not generate a lot of direct revenue. But that doesn’t mean that it is without value. Members who are engaged are more connected to their community and more likely to see their membership as intricately linked with their place in the community. The greater a member’s level of engagement, the more likely they are to renew, speak well of the organization to peers, and even encourage others to join. By following these suggestions, you can increase the energy around member engagement — and even move it toward becoming a self-sustaining part of your association’s culture. For more information and insight on increasing member engagement, feel free to contact   Vault Consulting .

Reason # 1. Understanding the Needs of Members — and Staying Relevant Associations succeed based on their ability to be relevant and helpful to members. Membership research can help determine how members view your organization regarding your brand, member satisfaction and engagement, and other factors. Moreover, you may have several different member categories or personas, each with its own needs. Many associations already segment their membership, whether by total revenue, specific niches within the industry, or other factors. It can be helpful to assess the needs of each of these membership sub-groups — again, not only their immediate needs but also what they will need moving forward as their markets continue to recover.  Reason # 2. Driving Membership Retention and Growth One of the potential impacts of conducting membership research is to update and clarify how you segment your membership. It’s very likely that the pandemic shook up your industry and forced some of your members to rethink their marketing strategies and offerings — even their business models. At the very least, your research can help you validate whether your existing segmentation strategy still makes sense or whether it needs an adjustment to reflect significant changes in the industry.  Effective research can also help you better understand why members join and stay with your association and why they decide to leave. Research into conference attendance, publication sales, and other sources of non-dues revenue can help determine whether you need to revisit pricing, adjust offerings, or make other changes. Reason # 3. Gaining Strategic Insights The third reason your association should conduct membership research is to develop strategic insights about your members’ industry. According to ASAE’s Decision to Join report, research is one of the key reasons companies join associations in the first place .  To gain these insights, an association can conduct primary or secondary research that members can use to benchmark their organizations and develop sales forecasts. Research can also provide insight into where the industry is headed, including potential challenges and opportunities on the horizon and innovative strategies and tactics that members can adapt or replicate in their own markets. Research also can provide insight regarding executive compensation. Companies in every industry need objective data to help them understand where they fit in their industry in terms of compensation. By being more competitive for top talent, they’ll position themselves for continued growth and success.  It’s worth noting that all of these insights can potentially be shared with members in ways that can generate non-dues revenue — from conference programming to special member reports.  Where to Go From Here Once you decide to conduct new membership research, your next decision is how to do it. If your staff has the expertise and bandwidth to conduct research using internal resources, that’s great. If not, it can be a smart decision to engage an organization with relevant experience. Indeed, certain sensitive areas of inquiry — such as member revenue or compensation studies — are best left to unbiased, third-party providers, preferably ones with experience serving as fiduciaries.   For more information and insight on increasing member engagement, feel free to  contact Vault Consulting .

Being open to change can make a massive difference in the success of your nonprofit. And in an ideal world, your organization already embraces change and continuous improvement. But in actual practice, many organizations operate in a more reactive mode, preferring to change only when forced to. In this post, we’ll look at three broad strategies in accounting for nonprofits that can help you be a more effective change agent. Strategy 1: Be on the lookout for opportunities.  If the idea of serving as a change agent at your organization seems overwhelming, it may be helpful to begin with a more narrow focus.  Start by looking at your job responsibilities, and consider what changes it would take for you to be more effective.  Next, consider changes that could help individuals or teams across your department.  Then, consider what types of change could facilitate the interdependencies between your department and others.  When looking at accounting in nonprofits, one general area of low-hanging fruit is your software and computing platforms. Organizations can be reluctant to change even when a new technology has gained some acceptance in the broader marketplace.  Real-world example:  An association client was reluctant to move its accounts payable (AP) function to a third-party, cloud-based vendor. Due to their reluctance to change, they put the significant change on the back burner — that is, until they suffered a cyberattack leaving them without access to their servers for six frustrating weeks. Fortunately, they used the incident as an opportunity to take decisive action and have now moved successfully to a cloud-based AP platform that delivers far greater flexibility and resilience. Where to start:  Of course, spending all your time looking for ways to change or improve operations would become a distraction. As an alternative, consider making it a regular part of your yearly work cycle — for example, as you prepare for your organization’s annual audit. That way, you can ensure that you’re looking for ways to improve without spending all your time doing so. Strategy 2: Be proactive about change.  When it comes to change, every organization falls somewhere on a continuum. In our experience, the tone is generally set at the top of an organization and can range from welcoming continuous improvement and learning to avoiding change steadfastly.  Before researching and advocating change, make sure you know whether you need permission from your executive director or executive board and whose buy-in you need.  The more you can quantify the cost and benefits related to the change you’re proposing, the better equipped your organization’s leaders will be to make a sound decision. Focused research can go a long way to making a persuasive business case.  Knowing what industry experts say about a new technology or emerging practice can help you craft a more promising solution. Still, it can also help assure the executive team that the idea is sound. Where to start:  Survey the staff members affected by a given change.  Communicate to those surveyed what you plan to do with the results.  Close the feedback loop by letting respondents and other involved parties know your preliminary findings and where you expect to go.  Remember that the more planning and communication you do for any survey process, the better your results will be. Strategy 3: Consult your resources.  The stakes can be considerable if you’re contemplating even a modest change for your organization. A smart strategy is to seek third-party insight and advice before you act. Where to start:  Speak with your organization’s auditors and outsourced accountants and get their insights into how you could improve your accounting function. They already know a great deal about your organization and very likely have insights into how other associations and nonprofit clients are dealing successfully with similar challenges.  Additional resources may include peers and colleagues you interact with through special interest groups offered by LinkedIn, ASAE, and other entities and continuing education related to your field. The next step is yours! Envisioning and driving change in accounting for nonprofits is critical. The bottom line is that, just as your members’ and stakeholders’ industries evolve, your organization must continually adapt to stay relevant to members.  By considering these strategies for driving change, you can significantly increase the likelihood of success. For more information and insight, feel free to contact Vault Consulting .

Most charitable organizations, trade, and professional associations, taxable subsidiaries, and foundations rely on the trust and financial support of the public to run their organizations. Without that trust, mission-critical programs could lose the necessary resources to have an impact. Developing internal financial controls (financial management practices that ensure proper use of assets) is essential to ensuring nonprofit funds are in place to support key programs and the overarching mission. Even with limited resources (personnel and financial), it is possible for organizations to create the strong internal controls needed to ensure proper use and prevent fraud. As you prepare to create sound financial management practices, focus on these three principles to mitigate the risk of loss across your organization. 1. Ensure the Security of Your Assets Think of your nonprofit assets in terms of a chain of custody, with the flow of assets being tracked and secured. Develop control activities that also include strong physical restrictions such as security and locks for both cash and the information needed to disseminate or transfer it (i.e., PINs, credit cards, petty cash, passwords, financial/accounting software, or account numbers). Such information should be secured at all times with clearly defined authorization thresholds (more on this in the next section).  2. Checks and Balances For your internal financial control practices to work effectively, your procedures should ensure that access to assets is never given to a sole individual. Instead, sound financial management practices leverage checks and balances, or separation of duties. A great example would be utilizing a cloud-based disbursement system that directly syncs with your accounting system. Such systems reduce the potential for fraud by providing automated workflows with built-in approval and system controls. 3. Clear Roles and Full Transparency Sound internal financial control policies are always fully disclosed to all stakeholders, with all parties having clearly defined roles. The risk of misuse of funds is greater in organizations without clearly defined internal controls. Be transparent and share clear financial management policies across your organization. Clarify roles and ensure your staff and stakeholders understand who does what. Document these policies so they can outlast any single individual’s tenure in a certain role.  Creating an Internal Financial Controls Checklist The Committee of Sponsoring Organizations (COSO) Integrated Framework lists five general components of internal controls: control environment, risk assessment, control activities, information and communication, and monitoring. As you develop your internal financial controls, examine the specific needs of your organization while letting these factors serve as a sound foundation for your management practices. Let’s examine 3 of these factors below: 1. Control Environment Create an organizational culture where dishonest behavior and lack of accountability are not tolerated. It is essential for those charged with financial oversight to practice responsible behavior, with management embodying the ethics outlined in internal control policies. 2. Control Activities These are the actual procedures that provide checks and balances. Control activities minimize the risk of fraud by making sure your assets are less likely to be jeopardized. Consider: Separation of Duties: Duties should be divided with clear boundaries on responsibilities. For example, this principle could translate into one individual making any deposits and another logging the information into the accounting and/or CRM system.  Reconciliation: This is the process of reviewing and comparing transactions to supporting documentation. Reconcile all assets and liabilities routinely (with cash being reconciled monthly) to uncover any possible asset diversion. Authorization: This is the process where transactions are approved by staff based on certain thresholds (dollar amounts) and ranges of knowledge. Authorization controls help you avoid invalid transactions. 3. Monitoring Controls must be routinely monitored and assessed for compliance and effectiveness across all levels of your organization. Develop management protocols for routine audits (internal and external via a third party) in order to ensure that any weaknesses or vulnerabilities in your internal controls are quickly communicated. Performance reviews and audits can help ensure accountability and lessen the risk of fraud across your organization. Vault Consulting provides outsourced accounting and financial management services for nonprofits, associations, and their affiliates. We tailor our services, helping you implement industry best practices for internal controls as we work to understand the unique challenges of your organization. Contact Vault for more information about internal control assessment and financial management for your organization.

For nonprofits, maintaining strong financial health while focusing on mission delivery can feel like an impossible balance. Nonprofit outsourced accounting offers a solution that allows organizations to excel at both. By partnering with financial experts who understand the unique challenges nonprofits face, organizations can build stronger foundations for sustainable growth. Here are five crucial ways nonprofit outsourced accounting can transform your organization: 1. Build a Strong Foundation for Scaling Growing nonprofits need robust systems that can handle increased complexity and volume. Without efficient financial processes, expansion becomes unsustainable. A nonprofit outsourced accounting partner brings: Expertise in implementing proper financial controls and processes Streamlined transaction reconciliation systems Integration of modern financial management tools Reduced overhead compared to in-house accounting staff This foundation allows your leadership team to focus on mission-critical activities while ensuring financial operations run smoothly. Instead of struggling with day-to-day accounting, your team can dedicate their valuable time to serving your community and advancing your cause. 2. Enable Data-Driven Decision Making Modern nonprofit leadership requires quick, informed decisions based on accurate financial data. When internal teams juggle accounting responsibilities alongside their primary roles, critical financial reporting often faces delays. By implementing nonprofit outsourced accounting solutions, organizations gain: Real-time access to financial information Faster, more accurate reporting Clear visibility into organizational financial health Reduced bottlenecks in financial processes These improvements enable leadership to make strategic decisions with confidence, knowing they have current and accurate financial insights at their fingertips. 3. Establish Objective Financial Oversight Nonprofit outsourced accounting partners provide more than just technical expertise – they offer an objective third-party perspective that can strengthen organizational resilience. This becomes particularly valuable during: Leadership transitions Major operational changes Strategic planning initiatives Budget alignment reviews Having an independent expert ensures your financial systems maintain continuity despite organizational changes, while providing additional assurance to board members and donors about financial stewardship. 4. Access Strategic Financial Guidance Many nonprofits can't justify a full-time CFO, but still need high-level financial expertise. A nonprofit outsourced accounting partnership provides flexible access to strategic financial thinking without the overhead of a full-time executive. This relationship delivers: Strategic financial planning support Mission-aligned budgeting expertise Long-term financial sustainability guidance Customized solutions for your organization's unique needs This strategic partnership helps organizations balance immediate operational needs with long-term financial goals while maintaining focus on their mission. 5. Leverage Advanced Technology and Security Modern nonprofit financial management requires sophisticated technology and robust security measures. Professional nonprofit outsourced accounting partners bring: Updated financial software and systems Enhanced security protocols Integrated payment and reporting solutions Streamlined processes for greater efficiency These technological advantages help organizations reduce risk while improving operational efficiency, allowing more resources to flow toward mission delivery. Making the Right Choice for Your Organization Selecting the right nonprofit outsourced accounting partner is crucial for organizational success. Look for partners who understand the unique challenges nonprofits face and can provide customized solutions that align with your mission and goals. The right partner will help strengthen your financial foundation while providing the strategic insights needed for sustainable growth. Contact us today.

Why do some nonprofits continue to grow, while others stagnate, or even contract? In many cases, the reasons that drive nonprofit growth trends involve fundamental strategies that span departments, programs, and functions. In this post, we’ll discuss three of the most common reasons for stagnant growth. Reason # 1: Not keeping up with changing member needs. From our experience, the most common obstacle to a nonprofit association’s growth is the failure to monitor and adapt to changing member needs. Many nonprofits have years, or even decades, of experience meeting member needs, and have developed a variety of programming, services, and products to meet them. That track record can also be a double-edged sword: inertia can cause an organization to continue offering programs and services even as they become less and less relevant to members. This is why the most successful organizations monitor member needs and preferences on an ongoing basis. These insights allow them to adjust current programs, discontinue ones that no longer meet member needs, and develop new offerings in response to emerging opportunities. There are various effective methods of tracking changing member needs, including analysis of historical data, focus groups, member surveys and polls, specialized task forces and more. To translate data on member needs into actionable insights, one commonly-used approach is to create member personas . These are a shorthand way of characterizing the behaviors and attitudes shared by major categories of individuals within your membership. A typical persona includes some demographic information (such as job title, typical years in the industry, etc.) and some psychographics (attitudes about your organization or other key topics, price sensitivity, career aspirations, etc.). The value of these personas is that you can use them to effectively target and market to different segments of your membership, and develop tools and resources relevant to particular segments. Reason # 2: Out-of-date or ineffective technology. Another major factor driving nonprofit growth trends is when an organization falls behind in using technology to serve its members. This can result in slower and less efficient business processes that can ultimately lead to poorer member satisfaction. It can also have a negative effect on the overall brand of the organization, making it seem stodgy or behind the times, and thus harming its appeal to the younger individuals it needs to bring in as new members. To cite one powerful example, the social media landscape continues to evolve rapidly, with platforms gaining and losing ground in their popularity, often according to the user’s age. Currently, LinkedIn continues to dominate the field in terms of more senior professionals in most industries. Still, it remains to be seen how the social media preferences of the younger segments of the workforce will continue to evolve. For now, the safest bet is to assume that you’ll need a continued presence on LinkedIn and Facebook — but keep your eyes open for emerging trends, especially among your younger members.  Reason # 3: Outdated membership structure. In many industries, nonprofit associations occasionally need to revisit their membership structure. Drivers for this strategy can range from economic downturns (whether broad or more industry- or region-specific), consolidation in the industry, new competing organizations or platforms that are siphoning off members, or other factors. Each association faces its own combination of factors, and no single solution is appropriate in all cases. To cite a well-known example, several years ago, the American Society of Association Executives (ASAE) initiated a major change to its membership structure, introducing a hybrid model for associations and Association Management Companies (AMCs). Under its new model, associations, and AMCs could pay a single flat annual fee determined by staff size, and individual employees could choose to opt-in to join ASAE. The change was carefully considered, planned, and implemented, and today the new structure has become the new normal for the organization. Of course, such a change is a complex, high-stakes decision and can’t be taken lightly or achieved quickly. But if your membership numbers have been experiencing problems for some time — for example, even before the pandemic and its devastating effect on meetings and conferences — it may be worth reevaluating your membership structure. Keep your eyes on the prize Nonprofit growth trends have faced unprecedented challenges and pressures. Likely, your association’s board is already reviewing revenue and membership numbers and exploring options. But if not, it may be worth doing some initial exploration of various responses — including changes to your membership structure, as noted above, or strategic alliances with other organizations. Sustained growth has never been easy, but the current environment makes it a greater challenge than ever. Fortunately, by keeping an up-to-date understanding of member needs and preferences, maintaining an effective technology profile, and periodically reviewing your membership structure, you can help your organization make it through the tough times and strengthen on the other side. Ready to help your organization navigate challenges and achieve sustained growth? Contact Vault today  to learn how we can support your success!

Increasing Diversity Overtime The AICPA formed the Minority Initiatives Committee in 1969 to increase diversity in the CPA profession. Their goal was to provide opportunities and promote the hiring of qualified minority accounting students.  As a result, the number of minority CPAs climbed from 150 to 1,000 in ten years. Although a significant increase, minority CPAs only accounted for 2% of the industry. Today, minorities only represent 4.3% of the accounting profession and African-Americans make up 3% of the new hire population for CPA firms.  This means that within 40 years, the African-American percentage in the accounting profession only rose by 2%. Recruiting Accounting Students The CPA journal surveyed undergraduate African American students and found the combination of a more captivating introductory accounting course combined with personally knowing an accountant could potentially stimulate more interest in the profession.  For many colleges, majors are not declared until students arrive on campus. Offering high school accounting courses or more exciting and captivating introductory accounting courses could contribute to a higher percentage of minorities majoring in accounting. It might also prove beneficial for firms to send minority employees to college campuses to serve as role models and even mentors to undergraduate students. A Generational Profession A similar idea was mentioned in another article posted by the CPA Journal .  This article spoke about how the CPA profession is considered a generational profession. Most current CPAs have a family member who is or was a CPA.  Since minorities have always made up a small, single-digit percentage of the accounting profession, and since this profession is generational, it makes sense that the number of minorities within the accounting profession remains low.  Since minority groups do not receive the same exposure to the accounting profession from their personal life, it is up to accounting firms to create this exposure during their undergraduate tenure. The CPA Exam The exam dropout rate might also contribute to the low number of minorities in the accounting profession.  After sitting for just one exam, 12% of Caucasian exam candidates, 24.5% of Hispanic candidates, and 32% of African-American candidates drop out. One reason for this high dropout rate could be the cost of the CPA exam process. Some of the most advertised review courses are priced around $3,000.  One exam alone costs hundreds of dollars. The candidate must repay this fee if they fail the exam. Lack of mentors along with the high cost of the exam process might contribute to the high dropout rate. Next Steps In order to stimulate a desire to both major in accounting and become a CPA, students need to be provided with exposure in the classroom, mentorship, and financial resources.  Introductory accounting courses should be offered in high schools and advertised more heavily in the first year of college. Firms can partner with both high schools and colleges to begin a mentorship program for potential candidates with mentors helping CPA candidates see the big picture. Candidates facing financial hardships could choose to work at firms that reimburse employees for CPA expenses. Looking to make a career change? Check out our jobs portal for openings.