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Forecast: Improving Nonprofit Accountability Through Online Technology

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Improving Nonprofit Accountability Through Online Technology

By Claudia Holtzman, Project Director of the Electronic Data Initiative for Nonprofits (EDIN) at Independent Sector
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Interactive websites, e-philanthropy and electronically generated databases have transformed the way nonprofits communicate with the public, grant makers, and donors. Soon, the Internet will change the way charitable organizations interact with government as federal and state agencies forge ahead with "e-services" to become more efficient. Nonprofits should view these advances as welcome opportunities to reduce their paperwork, increase their efficiency in responding to regulatory demands, and improve their organizational effectiveness.

In early 2004, the Internal Revenue Service will offer an option to electronically file, or "e-file", the Form 990 -- the annual information return most nonprofit organizations are required by law to submit to the IRS and to many state charity offices. Over time, "e-filing" will change the way nonprofits collect and report data, and lead to greater consolidation of federal and state regulatory demands on nonprofit and philanthropic organizations.

----> Electronic Data Initiative for Nonprofits (EDIN)

A burdensome, inefficient process of collecting, managing and disseminating nonprofit data motivated several of the nation's leading nonprofit organizations to spearhead a coalition to promote online technology as a means to achieve greater efficiency and accountability in the sector. Representing tens of thousands of charitable groups and foundations, the Electronic Data Initiative for Nonprofits (EDIN) is led by Independent Sector, the Council on Foundations, GuideStar, Inc., National Council of Nonprofit Associations, and OMB Watch, with the Urban Institute's National Center for Charitable Statistics (NCCS) and Surdna Foundation serving as advisors.

EDIN is reaching out to nonprofit organizations, associations, foundations and their accountants and technology providers to build a coalition of support for "modernized e-file" efforts and to encourage software developers to add electronic filing to their Form 990 tax packages for filing the 2003 organizational year returns.

----> Why e-file?

By integrating accounting with report generation, nonprofits will ultimately save time and expense in complying with regulatory requirements. Electronic filing of the Form 990 will result in:

* Greater accuracy
* Reduced paperwork and administrative costs
* Greater efficiency
* More effective use of public resources

----> E-filing: An Important Management Tool

The short-term gains of greater accuracy and efficiency are appealing but the long-term benefits of electronic filing are even more compelling: a complete, timely and accurate database to conduct sophisticated analysis, evaluation and strategic planning.

Drastic budget cuts at the state level require nonprofits to make a strong case for their programs, and to do that requires data. E-filing the 990 will ultimately create a database for nonprofits to analyze and compare operations and programs, benchmark activities, measure outcomes, and establish meaningful performance standards. The Form 990 can be a powerful communications tool; e-filing the 990 can lead to a powerful management tool for nonprofits to increase their organizational effectiveness and sustainability.

E-filing will require nonprofits and their accountants to adopt an even greater commitment to accuracy, accountability and efficiency of nonprofit and government resources. It will require integration with accounting software and integration with state reporting requirements. E-filing in 2004 will be optional but it is likely to be mandatory for many nonprofits some time in the future. Nonprofits, associations and foundations that file 990s should begin now to look at computerized and web-based methods to integrate their accounting with reporting and compliance.

The technology community can help educate nonprofit managers and CFOs on the importance of e-filing and encourage the developers of tax preparation software to add e-filing updates to their Form 990 packages. As the 2004 filing date approaches, the technology community can assist in a successful transition to e-filing by alerting their nonprofit clients to training and workshops on e-filing the 990 and referring their nonprofit clients to EDIN as a resource for information.

With scrutiny of America's institutions at an all-time high, nonprofits have an unparalleled opportunity to increase their credibility and strengthen public trust. Technology consultants can play a key role in this effort by advocating for the adoption of e-filing.


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Further resources:

www.independentsector.org/edin/edin.html

www.guidestar.org/news/features/power01.stm

www.form990.org

coming soon: www.edinonline.org


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About the Author:
Claudia Holtzman is Project Director of the Electronic Data Initiative for Nonprofits (EDIN), a national partnership to promote greater accountability through online technology housed at and administered by Independent Sector, a coalition of leading nonprofits, foundations and corporations strengthening not-for-profit initiative, philanthropy and citizen action. Most recently, Claudia was a consultant to the National Center on Nonprofit Enterprise (NCNE) in Arlington, VA, and to MCI WorldCom Foundation's MarcoPolo: Internet Content for the Classroom, in Reston, VA. She has worked for a variety of nonprofit organizations and associations in the Washington, DC area for the past 20 years, including serving as Director of Communications for Experience Works, Inc., where she helped promote the national nonprofit organization's training, employment, and community service opportunities for mature workers, and as Director of Communications for George Washington University's School of Business and Public Management, where she developed and implemented an integrated marketing campaign to advance the school's relationship with students, alumni, donors and the public. To contact Claudia, email her at [link=mailto:edin@IndependentSector.org] edin@IndependentSector.org[/link].

Forecast: Info to Go

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Info to Go: How mobile and wireless technology can and will impact the nonprofit sector

By Joshua Peskay, Manager of Technology Consulting Services at the Fund for the City of New York
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Imagine being constantly connected to everything. For some people, this sounds like utopia, for others, a nightmare. But this is where the mobile and wireless technology revolution is eventually taking us. It's leading us to a world where, with a single device, we will be constantly connected to everyone else through voice, email, Internet, and even live video.

The result is that information is becoming radically decentralized. There is a tremendous opportunity for nonprofits to capitalize on this technology, putting great power (i.e. information) directly into the hands of community members.

One of the biggest challenges to nonprofits looking to take advantage of the revolution in mobile and wireless technology is just figuring it all out. There's WiFi, 3G, GSM, and Bluetooth, just to name a few wireless communication technologies. There are cell phones, handhelds, Tablet PCs, and good old fashioned notebook PCs, just to name a few mobile devices. Determining the what, how, and why of mobile and wireless is going to be one of the biggest technology challenges that nonprofits will face in the coming years. But like most challenges, some worthy rewards lay beyond.

I won't take on the entire morass of mobile and wireless in this article, but I will discuss two particular technologies that have immediate applications in the nonprofit sector and which are already being used with great success.

--------------> WiFi

Arguably the easiest and most practical of the wireless technologies, WiFi, in its simplest terms, replaces the need for network cables. It is limited, to be sure, in terms of its speed (currently about half the speed of wired networking) and range (about 300 feet per access point, assuming no physical obstructions), and security (making your network wireless has some obvious security implications). However, used appropriately, it can result in some practical and extremely useful applications.

For example, in New York City there is a set of wireless mobile labs that have been provided to various nonprofits by the Beaumont Foundation. These labs consist of 10-15 notebook computers and a wireless access point. They come with a locking, rolling cabinet, meaning an entire lab of 15 computers can literally be picked up and carried around the city from site to site. Once at a site, the local network admin simply plugs the Wireless Access Point (WAP) into their Local Area Network (LAN) and presto, the entire lab of 15 computers is networked and on the Internet. These mobile labs are being used for many purposes in New York City, including technology training, community technology centers (CTC's), and creating workshops for interns. Using these mobile labs, community organizations in New York City have been able to provide training and technology resources to many more people than would have been possible without this technology.

------------> Handhelds

Handhelds are taking on features faster than we can keep track of them. Whereas a few years ago handheld devices simply replaced a bulky address book and calendar, now they can word process, run presentations, take pictures, record video, play MP3s, send/receive email and browse the web. The ability to set your handheld to "stun" can't be far away (and certainly promises to spice up the battle between Palm and PocketPC).

But there are countless other applications for handheld devices. One project called Computerized Neighborhood Event Tracking, or ComNETsm, puts handheld devices in the hands of community members so that they can record conditions in their neighborhoods. The Fund for the City of New York's (FCNY) Center on Municipal Government Performance started this project in New York City, and it has since been adapted in Des Moines, Iowa, Worcester, Massachusetts, San Francisco, and various parts of Connecticut. Other places are in planning stages. The data can be uploaded via the Internet, can be reviewed by community members and reported to local government at the community's discretion. This data collection method, and pictures of conditions obtained with an attached digital camera, has resulted in many direct neighborhood improvements, including added pedestrian ramps, tree plantings, and in one case a $6 million project to reconstruct a street in a business improvement district.

As one can see from these examples, mobile and wireless technology has tremendous promise as a nonprofit tool. In the coming years, I expect to see many more organizations using this technology to connect community members to the digital world, with all its resources.

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Some further resources for those interested:

CNet's Wireless Networking 101: This is a step-by-step guide for setting up a wireless network. Very practical and easy to understand.
http://reviews.cnet.com/4520-3244_7-5021297-1.html?tag=fs

CNet's Handheld Release Calendar: This is a list (updated monthly) of the latest (and sometimes greatest) handhelds on the market.
http://reviews.cnet.com/4520-3128_7-5021316.html?tag=cal

ComNET: Information about the Fund for the City of New York's ComNET program.
http://www.fcny.org/cmgp/works.htm

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About the Author
Joshua Peskay is the Manager of Technology Consulting Services for Fund for the City of New York. Joshua prides himself on his ability to communicate effectively with both the technical and non-technical people in the nonprofit world, bridging the gap between them to provide practical technology improvements. In his spare time, Joshua is a playwright, adventure racer, and jujitsu fighter.

Forecast: Will Nonprofit Technology Planning Become Extinct?

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Will Nonprofit Technology Planning Become Extinct?

By Joni Podolsky, Independent Consultant and author of "Wired for Good: Strategic Technology Planning for Nonprofits"
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With the recession, the backlash of the dot.com bust, and plain old resistance to change, these days it seems as if technology is not a high priority for the leaders of most nonprofit organizations. The problem is, those leaders may be missing opportunities. In a recent study of 400 nonprofit senior managers by the Association of Fundraising Professionals and Telosa Software Inc. (released on March 19, 2003), 100% of respondents said they are dedicated to improving the efficiency and effectiveness of their organization, and they believe that technology can contribute significantly to this goal. However, they are not including technology in their organizational planning. This suggests that while the power and potential of technology as an organizational tool is recognized, the leaders of nonprofits still view technology as an adjunct to their operations, rather than a mission critical tool. According to the authors of the study, "...as technology investment decisions are made, they are not generally made within the context of the organization's long-term strategic plan."

Why is the function of information technology (IT) still considered separate, needing a separate plan? Certainly one reason is the general mystique that technology holds in our society. We sometimes have a tendency to think of technology as a panacea, as a cure-all for societal ills. In this sense, we give technology bigger-than-life stature, which can be intimidating and even scary. The media, technology companies, and even those of us trying to help nonprofits with technology, may have done too good a job of selling technology as the great cure-all. We spent so much time in the boom of the 90's convincing agencies that technology could revolutionize the way that they achieve their missions that we failed to do a very good job of putting technology into its appropriate context. This has created an environment where it is very easy to see technology as a separate goal, rather than as a strategic tool for achieving our organizational goals.

The reality is that technology is simply a tool, and the goals and strategies that apply to technology planning are the same goals and strategies for the organization as a whole. Not incorporating technology planning into the agency's overall strategic plan may result in missing the critical relationships that govern how information flows in that organization. Thus, planning for technology separately may actually detract from serving the agency's mission rather than help to achieve it.

There are two types of technology planning that are most commonly used today-strategic and operational. Strategic technology planning has three tiers. The first tier focuses on the organization's mission, goals and strategies without regard for technology. Once the organization has clearly articulated these, then they can focus on the second tier, determining what technology applications or tools are needed in order to support the first tier. This includes applications such as e-mail, the Web, office software and databases. Finally, the third tier focuses on the infrastructure needed to support the second tier. This includes the physical infrastructure, such as the organization's desktop computers and network, as well as such things as training, support and maintenance and the budget to sustain all of the above.

In a strategic technology plan, all tiers are required. Without a clear articulation of the organization's mission, goals and strategies, it is impossible to know the right tools and to establish the infrastructure needed to achieve the mission. Therefore the strategic technology plan is centered on the organization's mission, the foundation upon which all decisions in the plan are made.

The second type of planning, operational planning, focuses mostly on the operation of technology systems. It does not delve as heavily into relating those systems to the mission, goals, and strategies of the organization. An operational plan is more like a technology audit or needs assessment. It is a process that can be led by a technology consultant, not necessarily getting the entire staff involved. In other words, it is a process in which an expert comes in, has some discussions with staff regarding their technology needs, evaluates the organization's current technology, and makes recommendations on the changes the organization should implement. Documentation consists only of the second and third tiers of the strategic plan-applications/tools and infrastructure.

For now, I believe both types of plans are needed. When engaging with an agency we have to start at the level they are at, and right now most are at the level of thinking in terms of separate strategic and operational technology plans. However, will there ever be a time when technology planning will become extinct? Possibly. If both leadership thinking and technology evolve to the point where IT is seen simply as one of the necessary tools needed to achieve the mission, like electricity and the telephone, then it is likely that it would become a natural part of the organization's overall strategic plan, not requiring a separate strategic *technology* plan. This would probably be healthier for the organization and certainly much easier for technology practitioners, as they would need to focus only on the technology systems and not on organizational strategies.

Our mandate as practitioners should be to work towards making the need for identifying technology as a separate function extinct. The irony is that we may be making our own jobs extinct, as well. If technology planning becomes unnecessary for the average nonprofit, what will be the role of IT professionals who work in the nonprofit sector? Technology is ever evolving and as it evolves our roles must continue to evolve with it.

Related Links:
* AFP/Telosa Survey
* Wired for Good: Strategic Technology Planning for Nonprofits by Joni Podolsky (Jossey-Bass 2003)
* Arts Wire Spider School
* The Benton Foundation
* Coyote Communications
* The NPower National Network
* Summit Collaborative
* TechSoup

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About the Author:
Joni Podolsky is author of the book, "Wired for Good: Strategic Technology Planning for Nonprofits" (Jossey-Bass, 2003). In addition, she is a consultant, project manager, and trainer specializing in helping nonprofits strategically implement technology, build community relationships, and develop partnerships between the private and public sectors. Most recently, Joni was the founding program director of Wired for Good, a program of the Center for Excellence in Nonprofits (CEN) in San Jose, CA. Prior to CEN, Joni was a project director for Smart Valley, Inc., assisting school districts in the planning for and implementation of technology in the classroom and district offices. In addition to the book "Wired for Good", Joni is author of the Smart Valley guide, "District Administrator's Guide to Planning for Technology". She speaks on the issues of technology planning for nonprofits and building relationships with the private sector at conferences and workshops nationwide and in various industry and nonprofit publications. To contact Joni, email her at [link=mailtojonipo@pacbell.net]jonipo@pacbell.net[/link].