Executive summary
Not-for-profit organizations are increasingly investing in modern and grants management systems to replace fragmented, manual processes that drain resources and limit their ability to provide transparent, real-time reporting to funders. By building stronger operational infrastructure and digital systems, not-for-profits can shift staff focus from data reconciliation to mission delivery while meeting today's funder expectations for accountability, data fluency, and partnership-oriented transparency.
Meeting today’s nonprofit reality
Many not-for-profit leaders have felt the frustration of piecing together a grant report from spreadsheets, email threads, and multiple disconnected systems. A funder asks for a financial update and suddenly staff are scrambling for days, or sometimes even weeks, to pull data from a variety of sources and disconnected systems. Too often, the numbers don’t reconcile and then competing priorities stretch teams to the breaking point. On the other side, the situation is not always better within grant making organizations themselves.
Inefficiencies in grants management are manifestations of an industry in which resource constraints have historically pushed organizations to prioritize program delivery at the expense of investing in infrastructure, technology, processes and even staff support. However, neglecting the “backbone” of operations leaves not-for-profits overextended and reliant on outdated tools, leading to inefficiencies in grants management.
Just as we must invest in our own well-being to support others — putting on the proverbial oxygen mask before assisting those around us — not-for-profits must invest in their operational health to maximize their ability to serve their missions.
A digital backbone for mission enablement
Modern IT systems are no longer just operational tools; they function as an organization’s digital nervous system. When core finance, grant accounting, CRM, program operations, and monitoring and evaluation data live in a more integrated fashion, not-for-profits gain clarity and agility.
Instead of spending valuable staff time reconciling data, leadership can reallocate resources toward what matters most: delivering on mission. Enterprise resource planning (ERP) platforms, grants management systems, and other integrated IT solutions create a single source of truth that enables scenario planning, responsive budgeting, and transparent reporting.
Strong IT systems and infrastructure de-risk funding relationships and expand the pool of potential grantors by aligning operational capabilities with today’s transparency standards. For not-for-profits seeking to scale mission outcomes, an investment in technology must evolve from being seen as simply an IT concern to a decision to better deliver on an organization’s strategies and mission.
Improving technology systems, as well as their supporting processes, is an investment in organizational resilience, efficiency and credibility. It is about giving not-for-profits the tools they need to serve their constituents more effectively today, while preparing them to scale tomorrow.
“Transparency is the currency of trust. A well-implemented ERP and integrated systems give not-for-profit leaders the ability to speak in hard data and real-time insights, turning impact from a narrative into irrefutable evidence,” said Dennis Morrone, Grant Thornton’s Head of Not-for-Profit & Higher Education Industry and an Audit Services Partner.
Funder expectations: From punitive to partnership
Funders are increasingly data-savvy, accustomed to dashboards and real-time insights. They expect transparency, accountability, and confidence that organizations can pivot when priorities shift. At the same time, this does not mean they always dismiss organizations with infrastructure gaps.
In fact, some foundations and other grant-making organizations see those gaps as opportunities for partnership. When not-for-profits demonstrate a willingness to strengthen their operational backbone, funders can at times step in with capacity-building grants or unrestricted dollars to support that journey.
“Funders today want to see not-for-profit organizations reach the same level of data fluency and operational sophistication that they see in the private sector,” said Matthew Lerner, Grant Thornton Partner and Not-for-Profit and Higher Education Risk Advisory Leader.“The right ERP and grants management systems can make your impact instantly visible, your reporting effortless and your organization a magnet for talent and investment.”
The takeaway is clear: investing in operational health is not about avoiding punishment. It is about building trust, cultivating partnerships and demonstrating stewardship. Strong systems and industry-leading practices make that transparency seamless, and it begins with the not-for-profit’s choice to value its own infrastructure and ways of working.
Transforming grant management
One of the biggest pain points not-for-profits face is managing grants across fragmented systems. Many organizations still rely on “paper clips and Scotch tape” solutions or manual trackers that don’t align with program data.
The result? Limited visibility into budget-to-actuals, low uptake of program indicators, and weak oversight of compliance requirements. Staff waste hours reconciling disparate sources, creating delays and risk.
Modern systems change this dynamic by consolidating data sources, ledgers, budgets, and program indicators. Industry-leading practices and processes, as well as automated workflows, deliver efficiency, promote effectiveness and enforce compliance while reducing manual effort. CFOs can generate near-real-time financials; program directors can share live dashboards; and grants management teams can perform analysis on programmatic and financial outcomes. Not-for-profits gain the agility to respond to funders in minutes, not days.
An organization using modern systems must sometimes change its culture from employees and teams being comfortable with “their” tools and spreadsheets to entering data directly into a shared technology solution. Change management efforts to help this transition are critical to making the “single-source-of-truth” vision stick.
“The bottom line is that without effective systems and industry-leading processes, grant-making and grant-receiving organizations can face significant operational challenges stemming from inadequate automated systems and outdated grants management platforms,” said Grant Thornton’s Matt Unterman, Practice Leader and Partner, Not-for-Profit & Higher Education Advisory Services. Organizations frequently struggle with ineffective budget-to-actual tracking and poor long-range forecasting capabilities. “Inefficiencies and operational weaknesses can undermine trust between grantors and grantees, while limiting the grantees' capacity to operate at optimal levels of efficiency and mission achievement,” Unterman added.
AI’s forward-looking capabilities
Today’s IT systems are also embedding artificial intelligence and advanced analytics to help not-for-profits move beyond compliance into foresight. Predictive models can flag anomalies in spending, forecast cash flow gaps, and even anticipate program-related metrics.
Whether for large not-for-profits managing hundreds of millions in funding or for those managing less, these tools are increasingly essential. Imagine knowing in advance when a revenue shortfall is likely, or which types of granting organizations and donors are most likely to respond to an outreach. With clean, unified data at the core, organizations can leverage AI for strategic agility — turning time-sensitive opportunities into expanded impact.
Next steps: investing to serve others
Grantmakers no longer want retrospective PDFs; they want living proof that their dollars accelerate outcomes. Modern systems and industry-leading processes provide that proof, not through additional burden, but through operational efficiency.
Organizations that embrace this approach position themselves to:
- Build trust with funders through transparent, real-time reporting
- Streamline operations, freeing staff to focus on mission
- Harness predictive insights to align resources with opportunities
- Pivot quickly when crises demand new strategies
The journey begins with an honest assessment: Where are the gaps today? Which manual processes drain bandwidth? What infrastructure and applications have been deprioritized for too long? By investing in their own health, not-for-profits create the foundation to serve their constituents with greater confidence, efficiency and impact.
Contacts:
Head of Not-for-Profit & Higher Education Industry
Partner, Audit Services, Grant Thornton LLP
Risk Leader and Partner, Not-for-Profit & Higher Education Advisory Services
Grant Thornton Advisors LLC
Matthew is a Principal within Grant Thornton’s Not-for-Profit and Higher Education Advisory Services practice.
Practice Leader and Partner, Not-for-Profit & Higher Education Advisory Services
Grant Thornton Advisors LLC
Matt Unterman is a principal within Grant Thornton’s Not-for-Profit and Higher Education Advisory Services Practice.
New York city, New York
Industries
- Not-for-profit & Higher Education
Service Experience
- Advisory Services
- Business Consulting
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