Does My Nonprofit Need a CFO?

Does My Nonprofit Need a CFO?

Nonprofits exist to do good. But they need money to achieve their goals. This means you need people within your organization who can manage cash flow, perform accounting tasks, and help out with budgeting and forecasting.

These are all jobs that are traditionally performed by CFOs. So should your nonprofit hire one? Or is there another way?


Does Your Nonprofit Need a CFO?

Every nonprofit needs someone to watch over its finances and keep the organization on the right track. The question is whether that person needs to be a CFO. This can depend on your organization’s size, cash flow situation, and reporting requirements.

As nonprofits grow, they become more complex. They add programs, receive funding from more sources, and have to start thinking about strategic growth.

Generally, the more complex an organization is, the more it can benefit from having a CFO. This is because CFOs manage complicated financial situations and help with goals like risk management and investment. Large nonprofits may have to think about these things daily –- smaller ones don’t.

Your nonprofit may need a CFO, but it could also not be ready for one just yet. It depends on where your organization is at in its growth.


Finding the Right Candidate

If you decide to hire a CFO, finding a candidate with experience in the nonprofit sector will be important. Nonprofit organizations have special tax rules, annual filing requirements, and other unique money-management needs that only an expert can help you navigate.

It’s also valuable to find someone who has a genuine passion for your mission. This can increase the likelihood they stay with your organization long-term and make it easier for the CFO to relate with the people they’re leading.

You may also want to look for a particular set of credentials. For example, if you mostly need accounting help, hiring a certified public accountant (CPA) can be a smart move. Or, if you’re looking to bring more general leadership experience into your organization, you may look to hire someone with an MBA.


Alternatives to Hiring a CFO

Maybe you’re interested in hiring a CFO but can’t afford it. Or your nonprofit might be too new to make hiring a CFO a worthwhile investment. Either way, there are some alternatives.

One option is to take on the role of CFO yourself. Your background might make this possible. Or, if your organization is still new, the financial management services it needs may be simple enough for a non-expert to handle.

Outsourcing is another option. Companies like CFO Hub offer outsourced CFOs to give nonprofits the financial leadership they need at a lower price. We make it possible to get an expert CFO working for your nonprofit without adding them to your payroll.

You may be able to save money by outsourcing a few specific tasks instead of a full CFO. For example, CFO Hub offers outsourced accounting and back-end support. This can keep your nonprofit on the right financial course without ruining its budget.

Want to learn more? Get in touch for a free consultation and we’ll tell you how we can help.

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