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How the Right HR Tech Helps Nonprofits Make a Difference

In a December 2023 updated report, Ernst & Young (EY) found the average cost per manual data entry made by an HR professional increased to $4.78. Read about EY’s latest findings for more information.


It’s tough to uplift a community through outdated HR management, especially for nonprofits or religious institutions. After all, they’re subject to many of the same payroll guidance, taxes and compliance factors as any other business.

But because nonprofits often have less resources than for-profit organizations, they’re more affected by economic downturns. According to Independent Sector, a national membership organization, nonprofits aren’t recovering as fast as the overall economy.

On top of this, religious institutions may have unique requirements based on their:

  • congregation
  • affiliation
  • denomination
  • state(s) of operation

Nonprofits have to attract members, donors and supporters — often with few resources — to be successful.

Many of these organizations already use technology to spread their message. The right self-service HR tech helps them take this a step further by empowering their most important asset: their people!

What is a nonprofit?

Also known as charitable organizations, nonprofits advocate for specific social causes and group needs, like:

  • social justice
  • education
  • disease awareness
  • wildlife conservation
  • and more

The IRS offers tax exemptions to nonprofits for their contributions to society. Since nonprofits don’t keep most of their income, these tax breaks are crucial to their longevity.

What is a religious institution?

Technically, religious institutions are nonprofits, but they serve a different, more specific purpose. According to the IRS, religious institutions include:

  • churches
  • mosques
  • synagogues
  • temples
  • and other federally recognized places of worship

Again, religious institutions may also be subject to different tax requirements from other nonprofits.

What are common challenges for nonprofits?

While each nonprofit is unique, they often face similar operational obstacles. Here are three.

1. Limited resources

Because nonprofits rely so heavily on grants and donations, their HR departments are often small to nearly nonexistent. They can’t afford complexity, and even routine HR functions quickly add up. Ernst & Young places the average cost of a single HR data entry task performed manually at $4.78, making outdated processes a pricey pitfall for every nonprofit.

2. Staffing needs

Nonprofits frequently have unique staffing needs. And high engagement and transparent communication are necessary to retain valuable talent. Nonprofits must also classify their people correctly to avoid compliance penalties and retain vital government support.

3. Technology

Partially due to their limited resources, nonprofits often save sensitive information on paper. This is a huge security risk, but it’s also difficult and time-consuming for HR professionals to properly retrieve data for filing or, worse, in response to an unexpected audit.

Do religious institutions face the same challenges?

Religious institutions wrestle with unique issues on top of the obstacles they already face as nonprofits. Here are three.

1. Digital complexity

Religious institutions aren’t strangers to tech. Some rely on projectors, advanced sound equipment and streaming video software to help bring the people they serve together. In fact, many religious institutions turned to tech during the COVID-19 pandemic to preserve their sense of community.

But even if religious institutions are using tech more often, it still has to be right for them to succeed. Paper-based and manual systems produce headaches for their often-small HR departments. With easy-to-use HR tech, their staff members spend less time with unnecessary processes and more on their important mission.

2. Compliance

While religious institutions may not have to adhere to the same tax regulations as a normal business, proving their exemption status remains a heavy compliance lift. And even if certain taxes don’t apply, they may still have to follow other employment laws, like the Affordable Care Act (ACA).

According to the IRS, ACA noncompliance can cost a covered religious institution $100 a day per affected individual. It’s hard for an organization to thrive with potential penalties looming over it. The right HR tech streamlines crucial processes like ACA compliance and makes all the important documents they need accessible from a single app with one login and password.

3. Relevancy

For religious institutions, membership is everything. But data from Pew Research Center shows attendance and participation has dropped in recent years. Religious institutions must adapt to attract the capable leaders and talent they need to offset this trend.

Community engagement is key to a religious institution’s longevity. Self-service HR tech empowers employees with a stress-free, consumer-grade experience. Without the frustration of outdated HR processes, employees can focus on making a noticeable, local impact.

And an intuitive learning management software helps religious institutions give their staff members insightful training to help reach their goals and achieve even more!

How does HR tech help nonprofit organizations?

Easy-to-use HR tech helps nonprofits — including religious institutions — streamline processes and focus on their important causes.

Powerful talent acquisition software allows organizations to quickly attract and retain employees to keep work flowing. And with an efficient onboarding tool, their people can expedite routine Day 1 tasks and begin making an impact right away.

The right HR tech also helps nonprofits track labor and other important metrics, allowing them to help secure:

  • grants
  • endorsements
  • donations

A comprehensive compliance tool with an accessible, single system of record helps nonprofits keep up with their unique regulatory needs.


Just as nonprofits help make life better, easy-to-use HR tech empowers them to accomplish more. Learn how Paycom, the single app for HR and payroll, works as a powerful tool for nonprofits.

DISCLAIMER: The information provided herein does not constitute the provision of legal advice, tax advice, accounting services or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional legal, tax, accounting or other professional advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation and for your particular state(s) of operation.