What the best nonprofit CFOs do (and you should too)

As a nonprofit financial leader, do you have the insights you need to drive innovation and transformation in your organization?

Is your technology strategy aligned with your objectives for mission impact?

What tools and best practices do the most effective nonprofit CFOs use to lead their organizations to success?

Nonprofit professionals tend to be both kind and generous, so it is no surprise that many nonprofit CFOs are ready and willing to share their experiences and wisdom with other professionals.

Over 24,500 businesses, including thousands of nonprofits, trust Sage Intacct to deliver the financial insight needed to achieve mission objectives.

Over the years, we have had many conversations with nonprofit CFOs about what works—and what doesn’t—when it comes to managing a finance team, aligning technology with mission, and making data-driven decisions.

This year, Sage also surveyed over 1,200 finance leaders about how they create impact.

In this article, we will share some of the metrics gleaned from our CFO survey and distill top tips and best practices from many conversations with nonprofit finance leaders.

Read on to learn some of the secrets and skills of the best nonprofit CFOs.

Here’s what we’ll cover

How the CFO role is evolving

Historically, CFOs were confined to financial management and reporting, but today they are increasingly involved in forecasting and strategy.

They serve as key members of the c-suite, advising and guiding nonprofit executives and board members about fundraising, revenue management, compliance, budgeting, and planning.

Looking to the future, 96% of CFOs surveyed by Sage anticipate significant changes to their roles.

Successful CFOs prioritize strategic planning by aligning financial goals with the nonprofit’s mission; this alignment ensures every dollar spent furthers their cause while cultivating sustainable growth.

Additionally, these leaders harness data-driven decisions to analyze trends and forecast outcomes accurately, allowing them to pivot swiftly in response to changing environments or donor expectations.

Children’s Hunger Fund equips local churches for gospel-centered mercy ministry, distributing food and resources to children around the world.

According to CFO, Christopher Sue, there is a direct correlation between technology and decision-making that accelerates the mission.

He said, “The productivity we’ve gained with Sage Intacct allows us to make sense of our financial data…Now we can analyze our data to better forecast for the future and make decisions about what we as an organization can do to advance our mission.”

Seven secrets of successful nonprofit CFOs

Nonprofit CFOs who achieve success know how to blend transformative leadership with innovative use of technology.

They embrace technology to streamline operations, enhance transparency, and gain greater control and visibility over financial management and operational outcomes.

Here are seven important habits and tips from nonprofit financial leaders:

1. Never apologize for making money

Michelle Naus is the CFO of Tri-County Mental Health Services (MHS), a nationally recognized behavioral health services organization serving three counties in the Kansas City metropolitan area.

Tri-County MHS provides comprehensive mental health and substance use and prevention services to about 9,000 individuals a year.

Just because Tri-County MHS is a nonprofit agency doesn’t mean it shouldn’t be managed financially like a business.

“I think a lot of people in nonprofit read that as we have to break even or have a loss. I always tell them 501c3 is a tax designation, not a revenue designation,” Naus said.

Nonprofits should always have a profit motive because every dollar earned is more money that can be put toward services and building your mission.

2. Don’t try to do everything yourself

There is a lot of pressure and expectations placed on nonprofit CFOs.

But you don’t have to do the job alone.

Many CFOs get spread too thin by spending too much time fighting fires and performing tactical roles.

Effective leaders guard their strategic time by becoming better at delegating tasks.

Shari Freedman is the CFO of Room to Read, an international non-governmental organization (NGO) that delivers educational programming to low-income communities of women and children around the world.

She acknowledges the evolving role of CFOs, noting the basic tasks of the role remain—ensuring fiscal management, financial transparency, and global compliance—but adding that todays CFOs also lead in areas like strategic planning and technology.

Freemand advises other CFOs: “Do not do the job or the jobs of any of your direct reports. Delegate. Trust that you’ve hired the right people. Get them the resources they need and then get out of their way…Don’t fall into the trap that you have to do everything yourself because then you stop being a strategic advisor, you stop being effective as a CFO, and you become one of your own direct reports.”

In addition to delegating more tasks to your team, lean into technology to free your time for more strategic objectives. Jumpstart Inc. is a nonprofit that provides investment capital and intensive, high-impact assistance to a diverse range of entrepreneurs and small business owners across Ohio.

Managing partner, Karen Adame, shared that she spends a lot of her day answering questions and technology helps her to be responsive and forward-looking. “Thanks to the automation and visibility we’ve gained with Sage Intacct, I can now spend 75% of my energy analyzing our financial information and making operational decisions that impact the business.”

3. Seek collaboration beyond budget management

Top nonprofit CFOs know cross-departmental collaboration is critical to mission success.

Other areas of the organization have always looked to accounting for ongoing guidance about budget status.

But in today’s interconnected, highly digital world, nonprofits are realizing the finance department, and the CFO, can be a powerful partner in forecasting and planning.

Successful CFOs are breaking down silos in operations and technology, and report 30% greater cross-departmental collaboration over the last five years.

Michelle Naus’ team has used technology to reach out to other teams within the Tri-County MHS organization.

She explained, “Now that we’re so much more productive with Sage Intacct, my team can serve as strategic partners and leaders in the agency by providing more forward-thinking information. Rather than spending time on historical data, we’ve been able to flip our focus forward, and do things like reforecast our budget as needed.”

4. Be a strategic partner to the C-suite

The CFO has one of the most important seats at the C-suite table.

They serve as the right hand to the top executive, and they are responsible for keeping the board apprised of the organization’s financial and operational health.

Nevertheless, many CFOs are challenged to carve out enough time for strategic focus. Our survey revealed how top CFOs spend their day:

• Traditional financial tasks: 2 hours and 40 minutes
• Technology: 1 hour and 20 minutes
• Strategic planning: 1 hour and 22 minutes

If you’re not finding enough time for concentrated strategy work, technology can help you elevate your role within the C-suite.

Not only do 81% of finance leaders say automated processes free them to focus more on strategy, but access to meaningful data insights can illuminate the best path forward for your mission.

Pathway Lending is a private, 501(c)3 economic development agency providing lending solutions and educational services to small businesses.

CFO Barbara Harris explained how technology gives her more time to focus on her strategic role: “Sage Intacct frees me up to be a better partner to the C-Suite. I’m able to get into analysis for strategic planning rather than just managing tactical financial processes because the team can handle those now without me. And that’s removed a tremendous burden for me.”

5. Keep growing as a leader

With so many competing priorities, it can be easy to bog down in day-to-day financial tasks and neglect professional education and growth.

But the best CFOs know this is a mistake and make time to develop both professional and people skills.

CFOs who identify themselves as successful believe these are the top skills needed by today’s CFOs:

• Problem solving skills (79%)
• Leadership skills (78%)
• Understanding of tech and systems (78%)
• Communications skills (77%)
• Confidence (77%)

CFOs we talked to say it is important to focus on enhancing your communication abilities and relationship building. They advise getting to know the people on your team better.

Build a network of other CFOs with whom you can exchange ideas.

Having this network will help you develop better leadership skills and increase your confidence which enhances your executive image.

6. Find professional-personal balance

Maintaining a work-life balance proves to be a challenge for many nonprofit CFOs, with only about 33% of CFOs surveyed believing it is possible in their current position.

More than four in five CFOs experience feelings of professional burnout on a frequent basis.

The pressure can be very intense, and these numbers highlight the crucial need for organizations to prioritize the well-being of finance leaders.

While 87% of CFOs regularly feel stressed, top performers use strategies to help them find harmony between their professional lives and personal well-being.

Time management, delegation, and prioritization are critical skills for finding balance.

There is also a strong role for technology and automation, which not only helps CFOs elevate the amount of time they can devote to strategy but also improves employee satisfaction in the finance team.

7. Embrace AI—don’t fear it!

Seventy-nine percent of the CFOs Sage surveyed believe artificial intelligence (AI) will revolutionize finance.

AI for finance uses powerful algorithms to automate tasks, streamline operations, and analyze large sets of data and transactions quickly.

Using AI within finance improves accuracy and efficiency and strengthens forecasting by enhancing reporting, scenario planning, and predictive analytics.

For these reasons and more, 88% of successful CFOs already leverage the cloud, AI, and automation in their technology strategies.

Operation HOPE is the largest U.S. nonprofit dedicated to financial literacy education and empowerment.

The organization’s accounting staff was burdened in the past by time-consuming manual tasks, data entry errors, and an inefficient payment process.

Sage Intacct, powered by Sage Ai, has automated Operation HOPE’s Accounts Payable (AP) workflow to capture digital invoices and create an error-free approval process.

Sage Ai scans the general ledger (GL) to detect anomalies from historical patterns and flags outliers for review.

According to accounting manager, Mark Knowles, Sage Intacct with Sage Ai “has reduced our input time by 99% because all we have to do is check the information to ensure it is accurate and submit…Sage Ai has been a game-changer for us, making our finance team more effective and efficient. It’s like having an extra pair of hands to sift through data, enabling faster and wiser decisions.”

Final thoughts

As you have seen, it takes a range of skills to lead a successful finance team in today’s nonprofit sector.

The best CFOs learn to roll with change, adapting and innovating to help their nonprofit achieve the greatest mission impact possible.

They lead with empathy and confidence.

They use data-driven insights to make decisions, forecasts, and strategic plans.

Far from avoiding transformative technology like AI, they embrace automation and leverage it for higher productivity.

For more advice about how to lead your team to even greater levels of mission impact, read the Nonprofit Finance Team Survival Guide.

About the author

Nancy Master

Nancy Master is a senior nonprofit industry marketing manager at Sage Intacct and is passionate about helping nonprofits achieve mission success.

With more than 15 years of experience in software marketing, Nancy has close to 20 years of experience working with a human services nonprofit organization.