Nonprofit Finance: Skill Sets That Will Keep You Relevant and Competitive

Posted on May 4, 2020

I have had many conversations lately about the skill sets nonprofit finance and accounting staff need to possess in today’s environment to stay relevant and competitive. These conversations range from CEOs who are looking for more strategic partners with their existing CFOs, to CFOs themselves who are feeling overwhelmed with competing priorities, to accounting staff who are just starting in their careers and looking for the opportunity to make an impact at their organization.

In an article written for the CPA Practice Advisor, Kurt Avarell, Founder & CEO of Canopy, outlines the most important skills accountants need today, including business insight, analytical ability, technological savvy, regulatory knowledge, and customer service. Are these skills still essential in a nonprofit environment? I believe the answer is a resounding YES! Here is why:

Business Insight

Business insight, also called business intelligence, enables you to better understand a situation through data analytics in order to make organizational improvements. Some examples include:

Decision Making – Is the process to make a decision too long or is it unclear who ultimately is responsible to make that decision, often resulting in no decision?
Forecasting – What is predicted to happen, such as with contributions, based on the data you currently have and how can it be influenced toward a different path?
Cash Flow – Does the organization have a reserve policy and is cash coming in and going out as expected?
Slicing and Dicing Data – Are you able to break down your numbers by location, by activities, by source, etc. to assess the profitability of programs and determine if they should be updated to better align with mission and cash flow?
Practices – Are internal policies or processes getting in the way of bills being paid on time or receivables taking too long to be collected?

First decide what data you have and how to access it. Then put it into a meaningful format, such as using data visualization tools. This may require training, new tools, or new software to accomplish this.

Analytical Ability

Developing analytical abilities allows you to use critical thinking and problem-solving skills to find a solution to both complicated and everyday problems. This skill requires a person to visualize or see the problem and communicate it to others. Some examples include:

Decision Making – Determining that all significant problems to solve will have an owner, an established process, involve others that are impacted to provide input, and a timeline, for effective problem solving.
Forecasting – Determining contributions were going to decrease due to the COVID-19 pandemic and collaborated with fund development and grantors to lift restrictions and speed up payments on existing grants.
Cash Flow – Determining through research that the organization could pay less for supplies to decrease costs and provided training to appropriate staff on the purchasing process, which reduces cash outlays.
Slicing and Dicing – Determining through multi-year financial information that a program was accomplishing your mission but could not support itself, and therefore, was not sustainable. In collaboration with another nonprofit entity, determined their organization was able to deliver the program more cost effectively.
Practices – Determining that restructuring the accounts receivable policy would significantly reduce late payments from customers and speed up collections.

When it comes to special projects, make a point to discover who on your team possesses these skill sets. Otherwise, invest in training for the team or hire consultants to help you solve specific problems.

Technologically Savvy

This means you embrace relevant technology and actively improve your skills through informal and formal learning. Some examples include:

Collaborating with IT staff or third-party technology consultants to understand their role with finance-related hardware and software.
Scheduling regular time for the team to learn more about existing software functionality, such as within your ERP/Accounting System.
Determining if third-party software applications can create efficiencies through automation and/or eliminate a few spreadsheets.
Utilizing calendar and meeting tools functionality for overall better time management.
Ensuring the finance information that is subject to privacy laws and regulations within your software applications is handled appropriately.

Make technology a priority! This includes allocating time and resources to work with your IT team and consultants to contribute to your organizations long-term technology strategy that aligns with the organization’s strategic plan.

Regulatory Knowledge

Possessing regulatory knowledge means you seek to know about, understand, and comply with policies, standards, regulations, and laws. Some examples include:

Working with your external independent auditors to understand how new accounting standards will impact your internal practices and external financial statements. This includes discussing any COVID-19 related footnote disclosures.
Working with your tax advisors to understand implications to conducting business unrelated to your mission, as well as occurring in other states.
Understanding the impact of privacy and security compliance, such as with PCI Security Standards (PCI) and the European Union General Data Protection Regulation (EUGDPR).
Collaborating with management to be at the table when creating or updating organizational policies, as well as ensuring your staff are aware and adhering to them.

And the most relevant currently, understanding what the CARES Act and Paycheck Protection Program means for you and your organization.

This may be the toughest skill set to develop. There is so much new information coming at us all the time, which requires research and an implementation plan. Use this as an opportunity to subscribe to trustworthy resources and collaborate with peer organizations and external consultants.

Customer Service

This essential skill means you provide assistance, guidance, or solutions to the internal and external users of your services. Some examples include:

Having a thorough knowledge of the organization’s mission and services for employees and customers.
Empowering your employees to provide excellent customer service and using that in evaluations.
Replying to every single non-FYI email you receive within 48 hours and yes, that includes those from your colleagues.
Listening to colleagues and direct reports when they have questions on “why” something is done a certain way or making suggestions for improvements.
Having a positive attitude that is reflected with a smile, patience, and saying “Thank you.”

This is my favorite skill set, and I believe it is a requirement for any position. Remember to meet your internal and external clients where they are at and confirm they are happy or satisfied with your service.

In Conclusion

It’s always important to invest in building the right finance team for your organization. You can begin by identifying the talents that are most important to your team and organization that can be applied as you grow and make staff changes. These could include the skill sets listed above, along with other non-traditional ones, such as business advisory services, change management, and project management. These can also be combined with personality or performance assessments to build a strong, cohesive team. Then, collaborate with your Human Resources department to ensure job descriptions are up to date and succession planning has been addressed.

Remember to invest time in continuous learning for yourself and your team. This is a vital part of any job today. Transitioning from the financial data historian to the collaborative strategist isn’t an easy journey, but it is essential for continuous organizational effectiveness and self-improvement.

If you have any questions regarding consulting for your not-for-profit, contact a Clark Nuber professional.

This article or blog contains general information only and should not be construed as accounting, business, financial, investment, legal, tax, or other professional advice or services. Before making any decision or taking any action, you should engage a qualified professional advisor.