Finance and accounting folks at nonprofits are actively involved in decision making beyond their departments, playing active roles in decisions across their organizations. And regardless of organization size, a new study found the three strongest trends to be small, lean finance teams, cross-functional expertise for all staff, and being key decision makers for technology, software and services.
“Finance and accounting at a nonprofit organization has many different layers of complexity and nuance not often found in the for-profit world,” said Erika McNichol, Abila’s director of product marketing and co-author of the study. “What we found is that many of the finance and accounting professionals at nonprofits face some unique challenges and are very involved across the board in their respective organizations. At the same time, there is a concerted move to small, lean finance teams across organizations of all sizes,” she said. “In other words, there is significant expectation to do more with less without a drop in quality when it comes to reporting and managing multiple funding sources.”
More than two-thirds of those surveyed said they have at least a significant amount or considerable amount of influence across the organization. Almost a third said they have a small amount but 3 percent said they have no influence. Despite being involved in decisions throughout the organization, finance and accounting staff said that among the departments they are least engaged with are marketing and development/fundraising.
“There appears to be a missed opportunity or missed connection between the finance and fundraising departments,” McNichol said. “Closer collaboration between the two departments will likely increase finance’s strategic involvement in the organization as well as a clearer vision of how, when, and where dollars are used to fulfill the mission,” she said.
Employee turnover is identified as a major trend across the entire organization yet ranks low among department trends, suggesting that finance employees have longer tenures than other departments. Larger organizations, those reporting more than $10 million in annual revenue, were more likely to report staff turnover as a trend, at 48 percent, compared with 37 percent for smaller organizations.
Larger organizations were more likely to adopt cloud-based technologies (68 percent) than smaller organizations (56 percent). Almost 1 in 5 respondents said cloud-based technology is not at all important but just as many said it is extremely important. Some 45 percent deemed it at least very important or extremely important.
Smaller organizations were more likely to have a mix of full-time and part-time staff (65 percent versus 51 percent) or outsource elements of accounting and bookkeeping (27 percent versus 18 percent).
The biggest challenge facing finance and accounting staff are interruptions, 49 percent, by a wide margin over other challenges:
- Reporting, 23 percent;
- Training new employees, 20 percent;
- Staff management, 17 percent;
- Managing HR activities, 14 percent;
- Budget planning, 13 percent;
- Development activities/gift entry, 12 percent;
- Staff meetings, 11 percent;
- Strategic planning, 10 percent; and,
- Billing, 10 percent.
Almost three-quarters of those surveyed expect growth in the next three years, with the highest percentages found among children’s charities or youth development (89 percent) and the lowest among hospitals (61 percent).
The full report can be downloaded at www.abila.com/financestudy
Abila commissioned Strop Insights to survey more than 350 nonprofit finance and accounting professionals in the United States who work at organizations with annual revenue of $1 million to more than $50 million. Online surveys took place between Sept. 20 and Sep. 30, 2015.