Nonprofit finance departments have a unique set of challenges—complex revenue sources, compliance, audits, staff turnover. And those are just a few of the big ones. The finance/accounting team does some critical (if sometimes overlooked) work. The “2016 Nonprofit Finance Study” from Abila took a closer look at what goes on in the department.
Here are some key findings:
• Nearly half (46 percent) of nonprofit professionals surveyed said their organization would be unprepared for a member of their finance team to suddenly leave. Only 12 percent would be fully prepared. This vulnerability is even more present in smaller nonprofits, which may have only one or two staff in their finance department.
• Not all nonprofit finance professionals have formal training in accounting or finance. Just 78 percent do, while 21 percent have learned along the way.
• Similarly, not all finance professionals were originally hired at their organizations to work in finance—87 percent were, while 13 percent shifted to that role internally after being hired in a different department. Fifty-seven percent did not receive training after the shift to their new role.
• About a third of nonprofits have finance departments of one or two people, 28 percent have three or four individuals, and 41 percent have five or more.
With so many nonprofits lacking a backup plan if a finance professional were to leave, and the already high turnover rate among nonprofit employees, it’s important to assess the stability of your organization’s finance department. Is your accounting team strong enough to keep things on track if a member were to leave?
The survey also indicates some nonprofit finance employees are lacking in training—be it formal or position-specific, on-the-job training. With 21 percent lacking formal education in finance and accounting, and 13 percent shifting to a finance role internally, it’s important to at least provide comprehensive on-the-job training. A strong finance department is instrumental to your nonprofit’s success, so dedicate the time and resources to making it the strongest it can be.
Get the full study at goo.gl/NccKsf for more details.