Nonprofit and for-profit CFOs both have to budget, implement internal controls, facilitate audits, and manage compliance reports. While there are many similarities that both financial professionals face, nonprofit CFOs have the unique position of maximizing impact over profitability. This creates a “mission-first” philosophy that directly differentiates how a nonprofit CFO functions. It’s never easy to be a CFO, but nonprofit CFOs do face unique pressures and challenges.
Still, the slightly different skill-set that nonprofit CFOs embrace can teach other finance professionals lessons about leadership. So what do these leadership lessons include?
- Being a vigilant steward. Nonprofit CFOs have the responsibility of carefully monitoring donated monies and making sure they’re distributed to the proper channels. Internal controls, reporting, and monitoring are necessary to ensure that donated moneys from initiatives and programs reach their appropriate destination. Similarly, for-profit CFOs have to manage organization-wide philanthropy efforts. To be a vigilant steward, CFOs should distribute responsibilities while creating tight internal controls.
- Learning to stay within budget. For-profit organizations often go over-budget or adjust their strategy once a project is underway. Nonprofit CFOs, however, have the challenge of dealing with significant cash constraints. They must have nerves of steel to be able to stretch cash when needed, work within their boundaries, and keep other departments in line. CFOs who are able to make cash elastic can better manage internal costs and efficiencies.
- Creating consensus. Before current programs can be revitalized and new ones launched, consensus building is a necessary task for the nonprofit CFO. It takes considerable effort to build trust with disparate board members, staff, and volunteers. Similarly, for-profit CFOs must learn to create consensus around new initiatives that ultimately help the bottom line.
- Dealing with stringent requirements. Transparent reporting and operation requirements are multiplying every day. CFOs in both nonprofit and for-profit sectors must know what to show and how to show it. Elevating financial reporting is key to standing out from a crowded market. Real-time, cloud based software allows both professionals to take advantage of functional infrastructure.
Though nonprofit CFOs face unique challenges, the leadership skills they espouse can inspire any finance professional.