For most non-profit organizations, love of financial management is not at the core of the organization. However, financial oversight easily becomes increasingly complex and critical as an organization grows. If this is the case, it’s time to ask yourself: is it time to hire a chief financial officer (CFO)? The answer may differ depending on the size, structure, and strategic direction of your organization.
What A CFO Does
A CFO is a senior leader responsible for overseeing an organization’s accounting and financial operations. This individual works closely with the executive director, treasurer, and audit/finance committee while serving as a business partner to program heads. The CFO develops budgets, analyzes investments and capital structure, and helps craft long-term financial strategies. Typically, the CFO reports to the executive director and board of directors.
The scope of the role varies widely. In smaller non-profits, CFOs often wear many hats, overseeing accounting as well as areas such as human resources, IT, facilities, administration, and even legal affairs. Midsize organizations may also expect a broad range of responsibilities, particularly if funding streams and programming are relatively straightforward.
In larger non-profits (and midsize organizations with diverse revenue-generating programs or government funding), the CFO’s responsibilities are typically more focused. These CFOs concentrate primarily on accounting and finance functions, including risk management, investments, and financial reporting.
When Size & Complexity Matter
For small non-profits with simple operations, financial duties are often handled by the executive director or outsourced to external professionals. However, as an organization grows and its funding sources and compliance obligations become more complex, a dedicated CFO may become essential.
When evaluating whether to add a CFO, consider four key factors:
- The size of your organization
- The complexity and types of revenue sources
- The number of programs requiring funding
- Your strategic growth plans
Organizations with stable, unchanging operations may have less need for a CFO. By contrast, non-profits pursuing expansion, managing investments, financing major capital expenditures, or relying on diverse funding sources often benefit from experienced financial leadership.
How To Find The Right Candidate
Hiring a CFO requires careful consideration. At a minimum, candidates should have extensive knowledge of non-profit accounting and reporting rules. Professionals with only for-profit experience may struggle with non-profit-specific requirements, such as grant management and single-audit compliance.
The ideal candidate should be a licensed certified public accountant (CPA) and have an MBA or equivalent experience. In addition, the position requires strong communication skills, strategic thinking, and the creativity to deal with resource restraints. Experience across multiple operational areas (such as HR and IT) is also valuable, helping the CFO recognize when outside expertise is needed.
Finally, your desired CFO should display a genuine passion for — and commitment to — your organization’s mission. This top-down dedication motivates employees at all levels and helps ensure that financial decisions align with organizational values.
If your non-profit needs advanced financial oversight but lacks the size or complexity to justify a full-time CFO, outsourcing may be an effective alternative. Contracting with an accounting firm or specialized provider can deliver cost-efficient access to high-level guidance. This approach can be particularly beneficial when internal staff lack the depth of experience required for sophisticated financial planning and compliance.
Making The Right Financial Leadership Choice
It’s common for founders and executive directors to want to manage every part of their non-profit organizations, including finance and accounting. But as financial demands grow, bringing in a CFO — whether full-time or outsourced — can strengthen oversight, support strategic planning, and protect your mission for the long term. Contact us to help assess your organization’s needs and determine the right path forward.
