Most non-profit organizations have a mission statement that lends itself to making the world a better place. What many non-profits are learning is that, although making a profit might not be its primary focus, having strong financial controls and procedures can significantly help maximize donations received.
Although there are many reasons why the financial controls may have been historically lax, today’s culture provides a more conducive environment for adding resources to an organization’s finance function. Part of the shift is due to career changes for many senior finance executives. A recent Wall Street Journal article detailed how many financial executives from companies such as General Electric, U.S. Foods, etc. join non-profit organizations to make a bigger impact for causes they believe in.
Similarly, there are many executives who chose to spend the latter part of his/her career in a more relaxed and less stressful workplace after many years in high-intensity for-profit environments.
The challenges in a non-profit org are different than those in a for-profit company, but no less significant.
Typically, not-for-profits do not invest heavily in finding qualified staff and leveraging technology to increase efficiency. And so, experienced finance executives from outside companies can shed some expertise and perspective on how investing money in attracting talent and upgrading the IT infrastructure can yield long-term results that will benefit the organization more than shortcuts and quick fixes.
In many cases, not-for-profits hire fractional CFOs or part-time financial consultants to provide expertise so that the organization can gain perspective that many career-non-profit professionals don’t have. This is a viable cost-effective option for the non-profit organization who is either “ramping up” for increasing their market or trying to make
Take-away: If work for or lead a not-for-profit organization and a feel that your finance function is not up to par, feel free to contact us for a free diagnostic to determine how you can improve it. And if you’re a finance professional seeking a greater purpose for your professional life, consider applying your talents to a not-for-profit organization.
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Co-founders & Managing Partners