By Travis Carey, CPA and Amy West, CPA
Chief financial officers (CFO) of not-for-profit (NFP) organizations face many challenges today, especially workforce issues. Foremost is the inability to recruit and retain employees because of extraordinarily tight budgets. A large percentage of an organization’s expenses is related to personnel, making it difficult for nonprofits to compete for talent against for-profits. Second is the role of culture within the organization. Staff equity between in-person and remote positions is a concern in the post-pandemic environment: Mission-driven positions that serve the public need to have their functions performed in person, but many of the work functions of administrative staff can be conducted remotely; this can create an unhealthy “us vs. them” work environment. A consequence of this dynamic can really be felt in organizations that haven’t been able to modernize, where paper-driven processes can impact remote work, further frustrating staff. Without investment in automation, recruitment suffers and overwhelms an already stretched workforce.
Other challenges in the hybrid work model that NFP CFOs face include the recent increase in fraud and related concerns that internal controls may no longer be effective. NFPs are also targets for costly cybersecurity attacks because it is difficult to prioritize preventive spending on protection and insurance rather than mission. The long-term limits on resources and lack of expertise often prevent these organizations from taking advantage of emerging technologies. Many other challenges specific to the nonprofit sector are present, but this article focuses on the top four challenges facing NFP CFOs in the coming year: inflation, outsourcing to third-party providers, risk, and the expanding role of the CFO.
Read the full article on www.cpajournal.com.