Understanding the Role of a Fractional CFO in Nonprofit Organizations
Nonprofit organizations deal with a whole extra layer of financial complications and expectations. A CFO with experience at a for-profit company won’t be able to slip into a role at a nonprofit organization so easily.
A fractional CFO can step into a nonprofit organization in need to provide support and set things on the right path for the incoming permanent employee without stalling operations or missing out on opportunities limited by time, just as a permanent CFO would. If there’s a leadership gap or period of strategic growth at the organization, bringing in a fractional CFO can make sure your organization doesn’t fall behind.
What a Fractional CFO Can Offer
Bringing in a fractional CFO isn’t just about finding someone to fill a gap in a timely fashion. It’s about getting a fresh perspective, experienced advice, and support from someone with skills specialized for your specific situation and needs.
At KSH Consulting, all our financial consultants are experts in senior living finance and NFP accounting. Our team members can step into your organization and immediately get to work, evaluating, making decisions, and taking necessary action. Not only are our consultants experienced with nonprofit organizations and the senior living industry, they’re experienced in stepping into an organization in flux and taking the reins to keep it on track.
Why Nonprofit is Different
A nonprofit business model is different from a for-profit one. The CFO’s goal isn’t just to maximize net income, it’s to keep the day-to-day operations and services running smoothly while staying financially sustainable. The mission comes first. CFOs that have worked in the NFP sector in the past understand this key fact in a way that CFOs who have only worked for for-profit organizations may not.
In NFP, you’re not just dealing with one pool of money. Grants, donations, and operating funds all have to be accounted for separately, even though all the money sits in the same bank account. Plus, revenue can be unpredictable and have restrictions on what it can be used for – a scenario that couldn’t be more different from a for-profit company controlling its own sales and pricing to gain income that can be used as they see fit.
A whole different set of regulations are in place for nonprofit organizations, something that can be complex and difficult to tackle if you’re unfamiliar with the rules and requirements. Having someone on board who understands these regulations and is comfortable working within them is crucial.
Plus, nonprofit boards are more likely to be made up of volunteers or other passionate individuals who care deeply about the mission, but aren’t necessarily fluent in finance. The CFO is the one who translates the numbers into a story, explaining each move and how it supports the mission.
At a nonprofit, every dollar counts and is watched more closely from more directions. Donors, grant officers, the board, and the public are all paying close attention to how the organization spends its money. The CFO has to manage the accounts with an awareness that many eyes are keeping tabs on how far each dollar stretches.
When a Nonprofit Organization Should Bring in a Fractional CFO
If your nonprofit is going through a change or transition, the budget, funding, or financial reports are getting more complex than your current team can handle, or you need an outside opinion from a trusted industry professional, consider bringing in a fractional CFO to support your organization.
Get in touch with KSH Consulting to learn more about how a Fractional CFO from our team of financial professionals can help your nonprofit organization.
