Whether your not-for-profit is a start-up organization or a well-established entity, it has a responsibility to ensure transparency and accountability to its donors, granting agencies, and the general public as a whole. As such, the availability and use of its economic resources must be managed sufficiently to ensure the future success of its mission. The proper design and set up of a finance team within a not-for-profit is critical to its ability to appropriately report out information to its constituents. In general, this function and oversight is often entrusted to a chief financial officer (CFO) and/or accounting department, whom exhibit the appropriate level of industry expertise, business acumen, and fiscal aptitude.
However, not-for-profits often face a number of unique financial challenges and often struggle with limited resources, thereby putting them at a disadvantage in their ability to attract and/or retain talented individuals. The dilemma often becomes whether it is more prudent to invest in a CFO or additional finance personnel verses utilizing its resources for the mission. Questions surrounding whether the organization is truly ready for a CFO (i.e., start-up entity with limited transactions), the expense associated with additional personnel and the value they may provide are often heavily debated amongst boards as well. While no one answer is appropriate for every organization, an alternative solution that many not-for-profits are embracing is an outsourced CFO arrangement or outsourced accounting function.
One of the greatest advantages of working with an outsourced CFO is the cost benefit a not-for-profit can yield. Onboarding a full-time CFO or accounting personnel with salary and benefits is an expensive investment. However, an outsourced function can be kept for as long or as short as the organization desires, thereby providing cash flow savings that can be reinvested into its programmatic mission.
If an organization maintains a finance department, but is rapidly growing or finding it challenging to meet financial or regulator demands above and beyond maintaining the day-to-day accounting tasks with its current team, the consideration of outsourced or co-sourced function to augment the financial leadership and provide assistance and guidance may be an optimal solution.
Some additional benefits, above and beyond cost benefit, is the ability to have an individual or pool of talent that is qualified and established at your disposal that:
In today’s environment, not-for-profit organizations are unfortunately being asked to do more with less. With the demand to expand programmatic mission without increasing overhead, many executives are trying to manage it all with limited resources and time. Citrin Cooperman’s Not-for-Profit and Office of the CFO professionals are ready and available to immediately assist you in order to help you focus on what counts: your mission.