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Nonprofit CFO Positions Are Not Created Equal​

​​cfo.jpgBy James Sunshine, Raffa Nonprofit Search​

A myth persists that the Chief Financial Officer (CFO) of one nonprofit organization can easily take on the same role within another nonprofit. Differences in organizational size and mission aside, does the title, “CFO” mean the same thing and include the same set of skills and responsibilities across the nonprofit spectrum? In the following three examples, each CFO reports directly to the CEO or Executive Director, serves as liaison to the Board for financial matters and has at least four direct reports. But from there, the roles and responsibilities diverge considerably.

Nonprofit A – a 501(c)3 with a $21M operating budget and 400 FTEs providing healthcare services, support and advocacy on behalf of thousands of individuals and families in need within a county-level geographic footprint. Like other nonprofit CFOs, the CFO for this organization is managing the overall financial operation, ensuring GAAP compliance, presenting financial reports to the CEO and Board and advancing other CFO “duties.” However, this CFO is also planning for the impact of the increase in minimum wage, monitoring the potential for a dramatic change in its state government’s approach to funding the organization’s services and managing the nonprofit’s aging buildings and property. Equally important, the CFO is working with an organizational culture that embraces thoughtful planning and consensus building.  

Nonprofit B –  a 501(c)3 with a $6M budget and 40 FTEs producing programs and events in a complex urban environment of more than 1M people. Although the operating budget is smaller, Nonprofit B’s CFO must navigate an equally complex, yet different set of responsibilities. This CFO is advancing technology and systems that mitigate risk in an environment with a high volume of cash purchases, carefully reviewing contracts associated with each event or program and completing scenario planning for new programs and events. Nonprofit B’s dynamic culture encourages innovation and new ideas that will contribute to the urban district flourishing. Same CFO title as the first, but a radically different environment and responsibilities.

Nonprofit C – a 501(c)3 with a $25M operating budget and 150+ FTEs focused on public policy, research, program convening and publishing. The CFO for Nonprofit C serves as a strategic financial advisor, generating organizational scenario planning and budget forecast modeling. This individual also has oversight, reporting and administrative responsibilities for the organization’s $30M endowment investment portfolio. Success for this CFO requires working in an organizational culture that historically has been fairly bureaucratic and is evolving into a more streamlined business environment.  
 
As these three scenarios demonstrate, just as the term “nonprofit” doesn’t capture the breadth and depth within the sector, “CFO” is not a one size fits all position. When hiring CFOs, nonprofits need to keep this in mind: successful candidates for CFO positions need to have the right fit when it comes to experience, skills, culture and goals. One nonprofit CFO does not equal the next.

For help finding the right nonprofit financial executive for your organization, contact James Sunshine at Raffa (202.955.6742, jsunshine@raffa.com).​