Top 4 Benefits of Tracking Nonprofit Time

It’s not easy to run a nonprofit. Between managing rules and regulations, pressure to keep costs down, the seemingly never-ending need for more funding, and of course, the many efforts required to reduce turnover and keep employees working faster, smarter, and more effectively year and year.

This can be stressful, but there are ways to make things a bit easier.

Successful nonprofits are not only excel and communicating with their employees, members, funders, and the community — they employ systems that help ensure productivity.

They also track their time.

When used properly, time tracking empowers the right people to work on the right projects for the right number of hours.

Without further ado: Here are the top four benefits of tracking employee time.

1. Measure Program ROI

By tracking employee time, nonprofits are able to understand the real costs of any project or program. Whether your team is calling donors, running events, doing paperwork, or engaging with volunteers on social media, time tracking provides true insights into how much time any project takes — and at what cost to the organization.  

This data, when viewed across programs or funding sources, empowers managers and team leaders with a deeper transparency into how the organization is performing.

By understanding the time and costs of specific programs, you’re able to create more accurate program budgets, and to more effectively forecast how much time and effort it will take to deliver on your commitments to your members or donors.

Additionally, you’re able to share this information with your donors, board, or government organization.

2. Easy Compliance

Having an accurate and up-to-date record of employee activities makes it much easier to ensure compliance and quickly pass an audit. This is especially true for 501(c)(3) and 501(c)(4) corporations that are required to report on their expenses by function — which means that every dollar of wage has to be attributed to a specific program, fundraising, or administrative effort.

Preparing for end-of-month, end-of-quarter, or end-of-year reporting — or even worse, an audit — can take weeks of work. Modern timesheet systems are integrated with your accounting and CRM software, and significantly reduce the amount of time required to report to any internal or third-party organization.

Auditors are far happier to see a timesheet system in place than rough estimates done months after the fact.

Organizations receiving federal grants may be subject to even more stringent compliance standards, known as DCAA compliance. Adhering to these regulations includes the following guidelines:

• Employee must track their hours
• Timesheets should specify what project or program employees worked on during each hour they were working.
• If timesheets are revised, every update must be recorded, so that it's clear why the data has changed.
• All business systems have to be in good working order. This includes accounting, billing, estimating, purchasing, supply management, etc.

3. Improve Volunteer Management

Time tracking allows you to record the amount of time — and value — your volunteers donate to your organization. With this information, you can offer  incentives and rewards that help your volunteers feel valued and connected with your organization.

Tracking volunteer hours also allow you to see who are your most active and engaged volunteers. By identifying your biggest advocates, you know whom to send handwritten thank you notes and other forms of recognition.

Also, if you are looking to increase volunteer engagement through gamification, you’ll need to track volunteer hours to see who hit important milestones (i.e., 40 hours of beach cleanup) and deserve a badge, t-shirt, mug, etc.

4. Answer Critical Hiring Questions

How many employees does it take to run your nonprofit? How do you simultaneously keep operating costs low, maximize fundraising efforts, hire the right people, and deliver on your mission?

It almost sounds impossible.  

But timesheets can help! By simply entering hours, the larger operational picture becomes clearer.

You’re suddenly able to answer a wide range of questions about staffing your team:

• How much does it cost to train new employees?
• Should we hire a contract or full-time employee?
• How much time is my team spending on administrative tasks outside their core job description?

By understanding which projects to outsource, what work to keep in-house, and what programs clearly demand greater employee resources, your organization can more effectively achieve it goals and deliver results to funders and grantors alike.  

David Klein is a San Francisco-based marketing executive who focuses on technologies that empower people and businesses. He is currently the Director of Marketing for ClickTime. 

ClickTime makes it easy to plan, manage, and report on employee time. The company helps thousands of organizations on more than 55 countries reduce costs, improve operations, and ensure compliance.