The CFO'S Perspective

CFO Selections Team

Recent Posts by CFO Selections Team:

How Will a Recession affect Nonprofits?

While some economists and business analysts claim we are already in a recession, many more believe we will be in one by the end of the year. The general consensus is that whether we are already there, or it is coming soon, for-profit and non-profit organizations alike will be affected. The question is how will they be affected and what will those effects look like? Essentially, what should they expect and to what degree should they expect to be affected?

Obviously, nonprofit organizations will feel the effects of a recession differently than the private sector, but the types of issues they are dealing with right now are the same: changing consumer behavior (purchasing and donating), increased costs, labor market changes, and increased reputational risk. How will nonprofits be affected?

Topics: Non Profit Organizations Economic Trends Philanthropy Planning

How do Nonprofits Manage Cash Deficits?

As 2023 begins many nonprofit leaders are facing the reality of operating after the government funds that were provided during the pandemic have dried up. Organizations that regularly operate with minimal or moderate budgets are finding that they are in a cash negative position. How they respond now will determine what the future holds for their missions, staff, and the people they serve.

Topics: Non Profit Organizations Cash Flow

Nonprofit Hiring Trends

Current data from CFO Dive indicates that the hiring woes companies and nonprofit organizations are experiencing will continue well into 2023 (or even beyond). The question for nonprofit organizations is how do you overcome today’s challenges?

Luckily, there are several key trends emerging that are enabling nonprofits to hire well despite the market’s current challenges. These trends span areas from how pay is communicated to how employees work, and everything in between.

Topics: Non Profit Organizations Hiring

Today’s Top Nonprofit Leadership Challenges

Nonprofit organizations are champions of challenge. They are inherently designed to recognize, address, and overcome challenges of all kinds. And while there has been a tremendous amount of buzz over the last two years about the kinds of social and political challenges that nonprofits across the country have been taking aim at, very few people have talked about the kinds of fundamental organizational challenges that are keeping nonprofit leaders up at night. These kinds of challenges are not newsworthy or exciting, because despite everything else that has changed in this post-pandemic society we are living in, these challenges have remained the same.

Yes, today’s top nonprofit leadership challenges are yesterday’s challenges continued. Every organization regardless of size, location, or focus area has the same core hurdles that their leadership team needs to address. And how leadership handles these challenges can make the difference between whether an organization thrives or closes its doors.

Topics: Non Profit Organizations Leadership

Understanding Nonprofit Reports & Reporting Best Practices

At any nonprofit organization reporting tells the story of what is happening and why. But reports are not simply a snapshot of where the organization is today. They are a critical piece of information to predict where the organization will be tomorrow.

All nonprofits do some combination of financial reporting, management reporting, and board reporting. Internally these reports help organizations manage risk, evaluate current efforts against performance objectives, make strategic operational decisions, and prepare for what is coming next. Externally these reports communicate with key stakeholders and rally supporters. As such, reporting is extremely important for any nonprofit organization.

Topics: Non Profit Organizations Financial Reports

Mastering Nonprofit Cash Flow Projections

For-profit companies understand the importance of cash flow projections because they are inextricably tied to their goal of generating ongoing revenue. Nonprofits, on the other hand, are not typically as “cash flow savvy.” Some only do cash flow projections when required as a grant application stipulation, while others do not do them at all. And of the organizations doing cash flow forecasts regularly, many do not truly understand what they should be getting out of the process.

Topics: Non Profit Organizations Cash Flow

How to Improve Working Capital in Manufacturing Operations

Managing consistent working capital provides the resources needed to achieve organizational objectives and execute on the company’s strategic vision. In this way, working capital ensures business continuity for manufacturers and acts as a determiner of success. When cash is managed properly, a manufacturer will not only have the resources needed to keep operations running on schedule but also generate the long-term capital needed for major expenses like equipment replacement and facilities upgrades.

However, in a manufacturing setting, working capital is typically harder to manage than other industries. Manufacturing has a number of oddities that complicate their working capital formula and make management more challenging. Furthermore, inventory risks, high operating costs, reliance on manual processes, and frequent payment delays can all put strain on their working capital. The result is a perfect storm of cash flow management difficulties for manufacturers.

Topics: Cash Flow Manufacturing

Setting Prices to Increase Manufacturing Profits

In a keynote speech at the 2018 Manufacturing Finance Summit, Dr. Peter Colman, a global pricing strategy expert, explained that price is the strongest profit driver for manufacturers. The data he cited showed that a 5% increase in price results in a 33% increase in operating income, whereas a 5% increase in volume only results in a 20% increase in operating income.

The message here is clear: selling smarter is better than selling more.

And while many things have changed for manufacturers in the years since, this wisdom has not. Pricing remains critical for manufacturers as a leading revenue driver.

Topics: Manufacturing Profit Margin