Whether your non-profit organization needs a chief financial officer (CFO) depends on many factors, such as the size of your organization, the complexity and types of revenue sources, and the number of programs you have. Static organizations are less likely to need a CFO than those with evolving programs and long-term plans that rely on investment growth, financing, and major capital expenditures. So, if your organization is expanding quickly, it might be time to consider hiring a financial executive.
Accounting & Finance Oversight
Generally, non-profit CFOs (also known as directors of finance) are senior-level executives charged with oversight of accounting and finances. They work closely with executive directors, finance committees, and treasurers and serve as business partners to program heads. CFOs report to the executive director or board of directors on their organization’s finances. They analyze investments and capital, develop budgets, and devise financial strategies.
The CFO’s role and responsibilities vary significantly based on the organization’s size as well as the complexity of its revenue sources. In smaller non-profits, CFOs often have wide responsibilities — possibly for accounting, human resources, facilities, legal affairs, administration, and information technology. In larger non-profits, CFOs usually have a narrower focus. They focus their attention on accounting and finance issues, including risk management, investments, and financial reporting.
At a minimum, you want a CFO with in-depth knowledge of the finance, accounting, and tax rules unique to non-profits. Someone who has worked only in the for-profit sector may find the differences difficult to navigate. Non-profit CFOs also need a familiarity with funding sources and grant management. If your organization expends $750,000 or more of federal assistance, your CFO will need to oversee an independent financial audit (also known as a “single audit”) as well as possible state-mandated audits.
Depending on your needs, candidates could be required to have a certified public accountant designation or MBA degree. In addition, the position requires strong communication skills, strategic thinking, financial reporting expertise, and the creativity to deal with resource restraints. Finally, you’d probably like the CFO to have a genuine passion for your mission — nothing motivates non-profit employees like a belief in the cause.
Your non-profit’s ability to pursue its mission depends on its financial health and fiscal integrity. If your budget is swelling and your executives are struggling to manage financial tasks, it may be time to hire a CFO. Contact us if you need suggestions for finding candidates.
Talk with the pros
Our CPAs and advisors are a great resource if you’re ready to learn even more.