The Mid-sized Nonprofit CFO

It's no coincidence that our firm has experienced a steady increase in CFO engagements with mid-sized nonprofits as of late.

In our view, it seems that three primary drivers are behind this trend:
1. Increasing complexity of the growing nonprofit organizations
2. Pressure from funders to properly manage finances
3. The realization what a 'true' CFO an do for an organization

INCREASING COMPLEXITY
Organizations that have experienced growth or increasing complexity will recognize that the individual leading finance may actually be an effective accounting manage and not a CFO caliber leader. This accounting manager skill set will often meet the needs of a static organization but these same skills are usually exposed as inadequate in the face of organizational evolution. In our view, while the distinctions between a finance/accounting manager and a CFO are many, the most important include the idea that the CFO will introduce:
- forecasting
- interpretation
- advisory
- proactive organizational work with the CEO and board rather than reactive finance work

PRESSURE FROM FUNDERS
Without question, one of the top complaints I hear from funding CEO's is that nonprofits do an inadequate job of managing organizational finances. This reality can harm the nonprofit in a number of ways including lost grants, poor foundation relations, donor concerns, etc.

REALIZATION OF CFO CAPABILITIES
Organizations have lived without sophisticated finance leadership for so long that they lack clear understanding of the benefits of having a true CFO. This misconception perpetuates the very behavior that can harm the organization.

SUMMARY
Growing organizations cannot reach true sustainability without proper internal finance leadership and those organizations that meet this challenge will best deliver on mission and serve their communities.