Time & expense best practices for nonprofits looking to thrive in 2021

A once-in-a-lifetime pandemic and a global economic recession have made nonprofit services an essential lifeline for millions of people. Unfortunately, these twin challenges negatively impact nonprofits, causing many to reduce services, lay off workers, shrink budgets, or close their doors.

Profiling the YMCA, one of the most well-recognized nonprofits serving communities across the country, The New York Times reports that many locations have furloughed up to 95% of their workers as revenues are down 30% to 50%. This is emblematic of a broad challenge for nonprofits, and the consequences could be dire.

According to The Washington Post, one-third of nonprofit organizations might not survive the pandemic.

In this environment, nonprofits can optimize their approach to time and expense management to maximize efficiency, enhance transparency, and demonstrate value at every level. By streamlining this critical business component, nonprofits are better equipped to capitalize on available opportunities.

Optimize Program Efficiency

Nearly three-quarters of nonprofits are experiencing declining contributions, causing an untimely decline in revenues that force organizations to do more with less. According to a survey of nonprofit leaders, 50% reported only three months of operating revenue, and nearly 20% only have a month of financial leeway.

Nonprofits need to become more efficient to survive and continue providing critical services. Time tracking enables nonprofits to understand and report on employee activity, creating insights into where additional support may be needed with volunteers or where staff time can be prioritized to perform higher-value work.

Notably, since the recent pandemic onset, many workers are logging more hours than ever before. Bloomberg estimates that the average person added three hours to their workdays, leading to increased burnout and decreased productivity. As employees manage multiple responsibilities, including additional child care and other essential duties, time tracking should be implemented with care, intentionality, and equity.

Specifically, nonprofits will need to consider these efforts’ potential repercussions, exploring their implications for staff with different skills, abilities, tenures, and responsibilities. When rightly implemented, data from time tracking initiatives allows leaders to more precisely understanding:

  • Resource allocation. Knowing how much employee and volunteer time is spent on projects and priorities equips leaders to be more strategic with their decisions, ensuring that every dollar goes further.
  • Potential spending reductions. When financial resources are scarce, some business elements will inevitably be cut. Time and expense tracking can help identify potential spending reductions that minimize the impact on operational capacity.
  • Purpose & spending alignment. When spending goes unchecked, it’s easy for organizational drift to direct resources away from mission-critical elements. Realignment can make sure that essential priorities remain funded.

Without time and expense tracking, it’s easy for mission creep and incremental spending increases to bloat budgets, making them unsustainable. In contrast, highly efficient organizations are positioned to thrive in the months and years ahead.

Maintain Government Grant Eligibility

Government funding can be a valuable source of operational revenue. For most nonprofits, 80% of their revenue is derived from government contracts, making them a vital lifeline during difficult times. Nonprofits will feel pressure to demonstrate value through impact and efficiency in an increasingly competitive environment.

For example, government grants often require onerous record-keeping and reporting. Effective time and expense management make this process simple and straightforward.

What’s more, since many nonprofits already face staffing and revenue shortages, these efforts can’t be excessively onerous, making a comprehensive but easy-to-use solution a must-have for establishing grant eligibility.

Demonstrate Donor Impact

Funders increasingly demand more transparency when it comes to understanding the impact of their contributions. Network for Good, a PR consultancy for nonprofits, captures this sentiment, observing, “Donors come to your nonprofit because they believe in your mission. They stay with you because you prove yourself worthy of their trust and commitment.”

Similarly, a survey on donor behavior found that nearly 70% of funders want insights into a nonprofit’s overhead costs. More than half want a list of specific projects supported by the nonprofit before they contribute.

With an expansive and expanding ecosystem of nonprofit rating systems, nonprofits are often competing against one another to demonstrate their efficiency and effectiveness.

Time and expense management best practices equip nonprofits to demonstrate value at every level, leading to more and ongoing funding opportunities. With the right solutions in place, nonprofits can convey:

  • Resource allocation for nonprofit initiatives.
  • Overhead projections.
  • Transparency in record keeping.
  • Professionalism in financial literacy & intentionality.


Nonprofit work is more important than ever before. Unfortunately, too many face financial strain and operational constraints as the novel Coronavirus disrupts fundraising and outreach opportunities.

Simply put, to continue helping others, nonprofits will need to take care of themselves first by taking steps to keep them operational both during and after the pandemic.

Time and expense management solutions allow nonprofits to streamline their records, empower them to make insight-driven decisions, operate with greater efficiency, and attract future donors. They verify value through simple, comprehensive records and optimize operations to maximize impact and outreach capabilities.

Chris Harley
Vice President, Sales

Vice President of Sales, Chris joined DATABASICS in 2000. As one of the old guys in the organization, he loves talking about timesheets and expense reports, and anything else you may want to talk about! Chris has held numerous roles during his time at DATABASICS. Today he manages business development, sales, marketing, and partner activities.

Born and raised in Southern California, he has spent the last 20+ years in Virginia and is almost ready to call himself a Virginian. A graduate of Villanova University, Chris enjoys history, travel, golf, good drinks, and spending time with his wife and 2 children, especially, if he can combine all of those at one time!