The CFO'S Perspective

The list of skills and experience necessary to be a successful nonprofit CFO is long and varied, which can make it seem like a Goldilocks type of situation at first glance. And yet, maybe that isn’t a bad thing! In our line of work, we typically call it something else: balance.

Let’s discuss some of the ways in which this kind of balance is not only helpful for a nonprofit CFO, but critical to their success.

Grant management is one of the fundamental elements of effective financial management for a non-profit organization. There are many components of grant management, and while the degree of sophistication may vary from organization to organization, the fundamentals remain largely consistent.

So, why is grant management important?

The entire answer to this question depends on the organization, but here are the core reasons:

One of the most complicated elements of managing a non-profit organization's finances is allocating administrative-related expenses. These are expenses that cannot be specifically assignable to the areas benefited – commonly referred to as Indirect Costs. The methodologies of allocating indirect costs are often complex and situational. Additionally, many funders of non-profits have their own rules, exceptions and limits, creating a spider web of regulations.

There are 1.2 million public charities in the United States. Public charities are only one of 29 types of nonprofit organizations recognized by the tax code. Next in popularity to public charities are social welfare organizations (501(c)(4)--at last count, there were over 82,000.

In a world where everything seems to be politicized, it is no surprise that many not-for-profits are entering the political arena more and more. And while 501(c)(3) Public Charities can engage in advocacy efforts in generous ways, some organizations may be frustrated by the allowable activities, prompting them to form a 501(c)(4) – a specific type of not-for-profit organized to promote social welfare.

For many nonprofit organizations, revenue recognition is one of the most challenging accounting issues they encounter.  The guidelines governing the recognition and classification of revenue are now, however, undergoing significant change.

Last week I shared an overview about recording non-cash gifts and the opportunity for a nonprofit organization to accurately present the types and value of contributions it receives to support its mission. 

Today we review a related topic: Stock gift donations.

The easiest type of donations for nonprofits to accept are unrestricted cash donations. While everyone loves cash, what if you could supercharge your organization’s growth by accepting other types of non-cash gifts—like stocks?

Most non-profit organizations rely on gifts from other businesses and the public at large to achieve their goals. These come in the form of both tangible property and personal services (collectively nonfinancial gifts), which are referred to as in-kind contributions. 

Recording these non-cash gifts allows a nonprofit organization to accurately present the types and value of contributions it receives to support its mission. Even though in-kind gifts are a major source of support for many nonprofits, recording and reporting them properly can present some unique challenges.

After purchasing three homes in Portland in the past 15 years, I have come to a firm conclusion that houses choose us!  Not in some mysterious way or anything, but rather, just practically speaking.  As a home buyer, we don’t exactly drive around and pick a house off the street that meets our specifications and strike a deal.  Often, buyers must submit offers on several houses before a match is found.