Part of having strong nonprofit financial management at your organization is having the right leader in place. Hiring a great CFO can take a good deal of weight off your CEO’s shoulders. The CFO manages, plans, allocates, and develops budgets and financial materials to responsibly manage an organization’s finances. With a strong CFO in place, you have the right nonprofit financial management to build a strong organization.
When to Hire a CFO
Some organizations may not have a current CFO. Instead, the director, president, or other general manager wears the CFO hat. At some point, the budget of nonprofit financial management becomes too great, and you may feel that hiring a CFO is in order.
It’s time to hire a CFO when …
- The Executive Director, CEO or President is bogged down with too much work and cannot handle critical financial tasks in time. Finances are too important to be left for a free moment. Instead, you need someone who can devote time to the tasks needed to guide the financial management of the organization.
- The organization’s finances have grown to be complex, requiring someone in the leadership chair who understands nonprofit accounting. Nonprofit financial management is its own discipline, requiring someone with the knowledge, skills and experience to adequately manage the task.
- The Board of Directors feels a layer of oversight and leadership is needed to manage the accounting needs of the organization. They may see the problems listed above or conclude independently that the organization needs a CFO.
A CFO can bring unique expertise to the organization. With the right CFO in place, he or she can:
- Provide strategic, high-level perspective to the organization’s finance and accounting needs.
- Expand the organization’s capacity to manage its finances as it grows in size and complexity.
- Reduce excessive workloads in the areas of finance, administration, real estate, technology, or legal for the Executive Director (ED) and/or the Chief Operating Officer (COO).
- Supplement the skills of the controller or other finance team members.
- Coordinate with the ED and COO to make decisions that benefit the organization from a financial perspective.
Finding CFO “Right”
Finding the right CFO takes time. As with any hiring decision, rushing into hiring the wrong person for the right reasons can be disastrous. Leave yourself plenty of time—weeks or even months—to build the job description and begin the search process.
The first task is to create a job description outlining the desired characteristics of the CFO. Focus on the necessary core capabilities, strengths, and experiences. It’s imperative that a non-profit CFO has experience with nonprofit financial management.
Look for the following skills and attributes in a potential CFO:
- Deep, rich understanding of non-profit budget models, contracts, and regulatory requirements
- Demonstrates passion about the organization’s mission
- Produces detailed and precise work
- Exemplifies strong listening and perspective-assessment skills
- Communicates well, in a transparent fashion
- Exercises good judgment in the midst of ambiguity
The right CFO must also get along well with the CEO and other leaders. Because the two will work closely together, if they don’t get along or don’t feel entirely comfortable with one another, the tension will eventually turn into a nonworking relationship. A good partnership and chemistry between the two means a solid working relationship.
Options to Find the Great CFO
While hiring a full-time CFO is a great solution for many mid-sized and all large non-profit organizations, many are too small to afford or need a full-time CFO. If your organization falls into that category, there are several things you can do to afford to hire a CFO.
One idea is to hire an interim or temporary CFO. No one earns the title of CFO without building an extensive body of knowledge and experience. Bringing someone into the role on an interim or fractional basis gives the Executive Director and the organization immediate access to the many lessons learned over the course of their career, at significant cost savings.
Lastly, have you considered hiring a specialized nonprofit accounting firm? Nonprofit accounting firms may be a great substitute for a full time CFO, either temporarily or permanently. Beck & Company offers nonprofit accounting, auditing, and consulting, along with nonprofit financial management services, to help your nonprofit thrive.
Even if you cannot find a terrific CFO right away, having a company like Beck by your side means you will have the best support for nonprofit financial management. It can be hard to find a great full time CFO. Finding a strong consulting firm and nonprofit auditing firm isn’t difficult. Contact Beck & Company.
Beck & Company
Beck & Company is a certified public accounting firm serving the greater Washington D.C. area and the Eastern seaboard. We offer consulting services, auditing, and software selection to help nonprofits with their accounting needs. Contact us today for more information or assistance.