The Road to the Mission Infused Nonprofit CFO

Presented by Russell Pomeranz

It’s a Two Way Street – Mission and Finance Working Together

Why is the Ascendant Nonprofit CFO critical to the organization?

What qualities and skills should we expect from the Mission Infused Nonprofit CFO?

What strategies, tactics, and tools best align Mission and Finance by Valued Partner?

What does it all add up to?

Why is the Ascendant Nonprofit CFO Critical to the Organization?

Organizational trajectory in a much more competitive world

Finance plays a key role in defining organizational success

Key roles care about Finance to achieve mission goals

Organizational Trajectory in a Much More Competitive Nonprofit World

Spiral up or spiral down• There is no middle path

Much more competition for resourcesNonprofits are more strategicReliance on results, impact, and outcomes to funders

Impact

OutcomesResults

Finance Needs to Play a Key Role in Defining Organizational Success

Need to breakeven and seek unrestricted surplusesNeed to most efficiently and effectively manage resourcesNeed to build up capital to invest to build a

sustainable business modelNeed to manage cash and debt to avoid existential challenges

Key Roles Who Care About Finance to Achieve Their Own Goals

CEO/Executive Director • Partner

Board and Finance Committee• Fiduciary responsibilities while taking risks

Program Staff • Programmatic/Mission Impact

Nonprofit CFO’s Organizational Trajectory• Future CEO’s?

What Qualities and Skills Should We Expect from the Mission Infused Nonprofit CFO

Tangible Skill Set

Intangible Skill Set

Priorities and Focus

Organizational Investment (Programs, Infrastructure, Strategy)

Tangible Skill SetUnderlying understanding of nonprofit accounting and financial principlesAbility to define the business model of the organization – short and long termAbility to use financial statements to tell short and long financial storiesAbility to translate organizational goals into fiscal year budgetsUnderstand budgetary options, trade-offs, ramifications of choicesRise of the MPA

Intangible Skill Set

Curiosity – How do things work?Asking questions – Why and “what are you talking about?”Communication – Need nonprofit CFO PR capacityWritten and oral communication skills – tell a compelling story

Priorities and Focus

Unrestricted Net Income (Statement of Activities)Unrestricted Net Assets (Statement of Financial Position)Revenue growth and expense structure strategiesCash and Access to Capital

Organizational Investment (Programs, Infrastructure, Strategy)

Budgetary baseline and wish listInvestment pool – spending rate and purpose of various poolsProactive vs reactive – strategic initiativesMaking the compelling case – impact on bottom line and net assets over time

What Strategies, Tactics, and Tools Best Align Mission and Finance by Partner?

Finance and Program

Finance and Finance Team

Finance and Executive Leadership

Finance and Audit/Finance/Investment Committee(s)

Finance and Development

Finance and Program

ReportingFiscal discipline and accountabilityScheduling (meeting with all department heads)Immersion in the mission

Finance and Finance Team

Understanding the mission of the nonprofitUnderstanding, in practical terms, how the nonprofit achieves its missionAttending events and getting involvedSharing the big picture with the entire Finance team – Audits, Budgets, Forecasts

Finance and Executive Leadership

Guarantee a “seat at the table” for key decision makingAgree to the “what is in the best interest of the organization” perspectivePrepare options, ramifications, and solutions to key issues – how to get a “yes”Transparency and pushback

Finance and Audit/Finance/Investment Committee(s)

Prepare and distribute Budget Narrative (Forecast, Budget, and Audit)Distill down and present key issues in fiscal year and beyond – no surprisesMeet to anticipate questions from the Board – expect “what can go wrong?”Enlist the CEO to start Finance Committee meetings

Finance and Development

Reconcile restricted and unrestricted grants and contractsAlign Development strategies with organizational financial needsManage expectations and returns over timeMake a compelling case for development capacity

What Does it All Add Up to?

Two Way Street – Finance Infused Initiatives

Organizational Difference Between Mission Infused CFO and Myopic Bean Counter

The Look Forward Instead of Back

Two Way Street – Finance Infused Initiatives

Financial Literacy – invest in educationTake Finance Seriously – the world is watchingValue and respect financial functionGuarantee a “seat at the table”

Organizational Difference Between Mission Infused CFO and Myopic Bean Counter

Financial transparency provides organizational focus

Communication increases options

A financially stable and sustainable organization gives

confidence to funders

Take advantage of unique

moments in organizational

history

The Look Forward Instead of Back

Confident and relevant organization

Willing to take on new mission risks and rewards

Strategic capacity to pursue mission vs reactive (waiting

around)

Put aside the financial existential questions forever

Mission Infused Nonprofit CFO Peace and Contentment

Role is at one with the organization

Able to sleep at night

Officially a productive and constructive member of society

Proud to be a Mission Aligned Nonprofit CFO

Q&A

Russell Pomeranz