mission infused cfo_russell_pomeranz (1)
TRANSCRIPT
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The Road to the Mission Infused Nonprofit CFO
Presented by Russell Pomeranz
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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?
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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
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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
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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
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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?
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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)
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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
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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
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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
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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
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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
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Finance and Program
ReportingFiscal discipline and accountabilityScheduling (meeting with all department heads)Immersion in the mission
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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
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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
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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
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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
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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
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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”
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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
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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
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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
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Q&A
Russell Pomeranz