Foundation responds to back-to-back crises
with integrated cloud-based solutions

Headwaters Foundation for Justice is proud to “do philanthropy differently.”
By investing in grassroots organizations across Minnesota, Headwaters taps
the power of relationships to raise and move money in a collective mission
to “amplify the power of community to advance equity and justice.” Their
innovative approach also influences who raises and distributes funds, with
community members invited to lead much of the grantmaking work.
One key component of their efforts—Headwaters’ Giving Project Program—
annually creates a cross-class, multiracial cohort of about 20 Minnesotans
who typically raise and award $150,000 or more for organizations led by and
for Black, Indigenous, and people of color (BIPOC). With training, the cohort
develops a shared understanding of race, class, and power within society,
which supports their collective action in fundraising and grantmaking, areas
that are new to many of the participants.

Headwaters does philanthropy differently because they want to do it better.
So it’s not surprising that the foundation’s staff also seized the opportunity to
improve their technology and better serve their constituents by shifting
to integrated systems for fundraising, fund accounting, and grantmaking—
all orchestrated by one trusted technology partner: Blackbaud.

Taking the First Step to a Deeper Partnership

Looking back, Headwaters staff members are thankful they completed the
overhaul and consolidation of their software technology with Blackbaud
by the start of 2020—though they couldn’t have foreseen the profound
challenges and international attention the foundation would face that year.
“We knew we needed to upgrade our systems,” recalled Vice President
of Operations Julie Remmelts, who initiated the changes after she joined
Headwaters in 2015. “One of my roles was making sure that our technology
was set up for our growth and was moving forward.”

The first key step: Migrating to the cloud-based fundraising solution
Blackbaud Raiser’s Edge NXT from an earlier, database-driven version of
Raiser’s Edge. Once that was accomplished, Remmelts said, staff agreed,
“This is everything that we’ve been hoping for in a fundraising system.”
They also agreed that they could work smarter by using one technology
partner—not three—for their fundraising, fund accounting, and
grantmaking solutions. And the choice of which partner to consolidate
with seemed easy, given their success with Raiser’s Edge NXT and the
promise they saw in a deeper partnership with Blackbaud.

Their next step would be in switching from another provider’s problematic
grantmaking software to Blackbaud Grantmaking. Afterward, they would
complete the overhaul by adopting Blackbaud Financial Edge NXT to
advance their fund accounting.

Empowering the Entire Team

Blackbaud Grantmaking, Financial Edge NXT, and Raiser’s Edge
NXT are all leading solutions with user-friendly features, including
intuitive dashboards that have proven to be a game-changer for the
way Headwaters works. “Blackbaud dashboards empower users to
find their own information,” Remmelts said. “They are just so easy.”
Dashboards also boost reporting functionality. “Dashboards in
Blackbaud Grantmaking now provide our entire team with pertinent
information all in one space, and they are customizable. My
dashboard has different information than our director of individual
giving as they are tailored specifically to each user.”

Headwaters’ technology transformation improved the user
experience for everyone, including their community volunteers,
who benefit from the easy-to-use, streamlined setup in Blackbaud
Grantmaking with scorecards that help them review grant
applications consistently. “The Grantee Portal in Blackbaud
Grantmaking helps make it a smooth and simple process for
reviewers,” she said.

With their solutions working together in greater harmony,
Headwaters also realized process improvements that included
eliminating duplicate data entry. “No one wants to enter anything in
two or three times,” Remmelts said. “It allows for potential error, it is
extra time, and it’s just not efficient.”

In the past, Headwaters staff would need 12 to 15 work hours a
month to copy entries on new donations in Raiser’s Edge NXT over
to the financial software previously used by Headwaters and the
foundation’s accounting firm. Once Headwaters adopted Blackbaud
Financial Edge NXT, the transfer took a click of a button, and an hour
or less of review, essentially eliminating duplicative data entry work
and the added risk of errors and reconciliation. In addition to the
staff time saved, their move to Financial Edge NXT also saved 40% in
external accounting fees a year, Remmelts said.

Similarly, the Expense Management feature in Financial Edge NXT streamlines the payment process between the grant program manager and finance staff members while providing greater visibility into the status of grant payment
requests across teams. Expense request data can auto populate, again eliminating data re-entry and related errors.

Plus, grant agreements can be attached to expense requests, which also carry a record of approvals, all of which
simplifies the audit process.

Creating Rapid-response Funds with Confidence

It would be hard to calculate all the efficiencies Headwaters has realized
with integrated Blackbaud solutions. “Being able to have all of our systems
so we can just toggle back and forth saves us so much time,” Remmelts said.
She cannot imagine how the foundation would have handled COVID-19
and the response to Floyd’s murder if they hadn’t overhauled their
technology beforehand.

The last piece—adopting Financial Edge NXT—was critical not only because
it integrated with Blackbaud’s fundraising and grantmaking solutions but
also because it supports features such as direct payments and electronic
checks. With those advancements, and with Blackbaud solutions supported
in the cloud, staff could seamlessly switch to remote work and implement
a COVID-19 rapid-response fund to support communities throughout
Minnesota in the first weeks of U.S. lockdowns in spring 2020.

And when Floyd’s murder by a Minneapolis police officer threw their home
city into upheaval, sparked protests against police brutality across the globe,
and thrust their organization into the media spotlight, they could support a
second rapid-response fund keyed to social justice transformation.
“Headwaters Foundation for Justice could launch two back-to-back rapidresponse funds only because we had the systems and infrastructure to
support the increase of donations and community grants,” Remmelts said.
“We raised over $4 million dollars through our Communities First Fund and
our Transformation Fund. We couldn’t have done that without the efficiencies
of having integrated systems with Blackbaud. Before, we would have never
had the confidence to say, ‘We can take this on, and we have the systems to
handle it.’”

They also could lean in to get resources and support to grantees across the
region, Remmelts said. “With the support and design of Blackbaud’s products,
Headwaters could show up to support our community in a crucial moment for
BIPOC-led organizations doing powerful movement-building work.”