Tech Systems Every Fiscal Sponsor Should Evaluate

It’s grant reporting season, and you’re juggling multiple spreadsheets, dealing with a CRM that won’t integrate with your accounting software, and discovering that project teams are sharing sensitive files through personal email accounts. These are common signs that your current systems may no longer meet your needs or security standards. 

If it’s been a while since you’ve reviewed your core technology platforms, it’s time for an upgrade! Here’s a guide to auditing and upgrading the key systems that support your fiscal sponsor operations, including financial management, compliance, donor management, and project collaboration.

Why Your Tech Stack Matters

Fiscal sponsors are responsible for managing finances and operations across projects while ensuring compliance with various regulations. Your technology needs to handle everything—from managing donor data and segregating projects to providing transparent financial reports—while securing sensitive information and ensuring it’s accessible to the right people at the right time. Outdated systems can create data silos, manual processes, and errors that put your project's status or funding at risk.

Core Technology Systems for Fiscal Sponsors

1. Customer Relationship Management (CRM)

A CRM serves as the hub for managing donor and project relationships. It’s crucial for fiscal sponsors who navigate complex relationships, where one donor might support multiple projects, and where project leaders need access to specific supporters’ data.

Key criteria to evaluate your CRM for fiscal sponsored projects:

• Project segregation: Can you manage separate donor databases for each project?
• Grant tracking: Does it track grant applications, deadlines, and compliance?
• System integration: How easily does it connect with your accounting and email systems?

If you're relying on CSV files or manual data updates, your CRM isn’t performing effectively.

2. Accounting Software

Your accounting system should support fund accounting, keeping project finances separate while providing an overview of all entities under your fiscal sponsorship.

Key criteria to evaluate your accounting software:

• Fund accounting: Can it track funding based on specific projects or grants?
• Reporting: Does it generate both project-specific and organization-wide financial reports?
• Audit trail: Can you easily trace transactions for compliance?
• Bank integration: How well does it sync with financial institutions?

Compliance note: Ensure the system can generate required reports for state regulations and federal grants.

3. File Sharing and Document Management

Fiscal sponsors handle sensitive documents, and your file-sharing system should balance security with accessibility.

Key criteria to evaluate your file sharing and document management:

• Permissions: Can you control access to specific project folders?
• Audit logs: Does it track file access and changes?
• Encryption: Are files protected during transfer and storage?
• Backup and recovery: How is data protected in case of loss or corruption?

Consider how costs and storage limits grow as your organization expands.

4. Communications Platforms

A communications platform should streamline collaboration while maintaining professional boundaries and supporting donor communications.

Key criteria to evaluate your communications platforms: 

• Email management: Can you manage professional email addresses for project teams?
• Collaboration boundaries: How do you enable effective communication while protecting data?
• Branded communications: Does the system support branded messaging for each project and ensure compliance with solicitation regulations?

Vendor Vetting: Due Diligence Checklist

When evaluating or renewing contracts with vendors, ensure they meet nonprofit standards:

Security and Compliance:

• Data processing agreements specific to nonprofit needs
• Data retention and deletion policies
• Regular security audits
• Incident response protocols

Nonprofit-Specific Features:

• Experience with fund accounting and fiscal sponsor operations
• Capabilities for managing grants and donor privacy

Integration and Scalability:

• Quality of API (Application Programming Interfaces) and documentation
• Integration options with other nonprofit tools
• Scalable pricing
• Data export capabilities

Transitioning to New Systems

Upgrading your tech stack can be smooth if done thoughtfully and tailored for your sponsored entities. Start with the system causing the most manual work or errors and plan transitions during quieter periods. Always back up your critical data. Running parallel systems for a while can help ensure accuracy, especially for financial data, without disrupting operations.

Take the First Step Toward Smarter Systems

Your technology should be an asset to your mission. If you're spending more time managing systems than supporting projects, or if compliance is becoming a challenge, it’s time to consider an upgrade. By investing in the right technology, you’ll improve efficiency, reduce risks, and better serve your sponsored projects. Fiscal sponsors who invest in integrated, reliable platforms—and actively manage cyber risks—are paving the way for sustainable growth and long-term mission success.

Ready to evaluate your tech stack? Start by documenting your current systems and how they integrate (or don’t). You may be surprised how much manual work can be automated and how many risks can be reduced with the right tools in place.

Let's tailor your technology together! Book a brief discovery call with one of our experts for a free consultation. We help fiscal sponsors streamline operations, improve donor engagement, protect sensitive data, and build smarter systems for long-term success.