How Non-Profit Leaders Can Thrive with Fractional Resources
Published on by Jill Prendergast in Client Accounting & Advisory, Not-for-Profit
Non-profits play a vital role in our communities by advocating for positive change, fulfilling unmet needs, and enhancing the overall quality of life in the communities they serve. While focusing on the missions of their organizations, non-profit leaders also must prioritize strong financial management to ensure long-term sustainability for their organizations.
Non-profits face many challenges as they navigate the needs of the populations they serve, their staff, and the donors who support them. In a post-pandemic environment in which donations have not yet fully recovered, non-profit budgets can be strained, and with funding sources less readily available, making the case to hire staff with deep knowledge of non-profit accounting can be particularly challenging.
Hiring a fractional non-profit CFO or Controller can be a cost-effective way to meet these needs and save on the expense of additional staff salaries, benefits, and training costs.
What is a fractional financial resource to a non-profit?
A fractional resource is an outsourced professional who helps you run the day-to-day financial aspects of your organization. It’s a flexible option that can be scaled up or down to the changing needs of your organization – and for a growing non-profit, fractional accounting staff can provide additional support when needed most, saving non-profit leaders the time and resources required to recruit and train the right staff.
A fractional resource can bring knowledge and strategies used by other non-profits to solve similar problems, increasing operational efficiency at no extra cost. While bringing their own experience and knowledge to the position, a fractional non-profit CFO or Controller who is part of a larger accounting firm also has access to a broad team of experts in non-profit accounting and taxation. This expertise helps non-profits stay compliant with financial matters and adopt best practices to sustainably grow their organization. A professional fractional team can also help non-profits stay informed on frequent changes to accounting regulations and compliance requirements that may affect them.
Insights beyond the numbers
A fractional CFO or controller can support your non-profit in various areas including financial planning and budgeting, financial analysis and reporting, cash flow management, grant tracking, and compliance. In financial planning and budgeting, fractional CFOs or controllers can assist non-profits in developing and maintaining realistic budgets. They can also provide valuable insights and recommendations to support decision-making.
Timely and accurate financial statements help the organization, board, and donors stay aware of and understand the organization’s financial health. Fractional resources can help non-profits get their books closed more quickly and accurately so their financial reports are available and transparent.
Accounting errors, fraud, and financial mismanagement can have a devastating impact on a non-profit. Strong internal controls that protect assets are a must for any growing non-profit. A fractional CFO or Controller can help with developing financial policies and procedures to reduce this risk, including guidelines for expenses, cash handling, budgeting, and other financial processes.
Summing it all up
Engaging with a fractional non-profit CFO or controller allows non-profits to entrust financial management to non-profit accounting professionals, so they can concentrate on their missions and programs.
In summary, these five areas encompass how a fractional resource can specifically help your organization save budget, streamline efficiency, and better fulfill its mission:
- Free up strained financial resources and enable quicker, more versatile growth
- Added flexibility and time-savings for the rapidly changing needs
- Expertise in non-profit accounting and access to broader resources
- Executive-level support, strategic decision-making, and top-down financial planning
- Write and develop internal controls policies, provide risk management, and technical advice
More resources on fractional services
If you want to learn more, check out these posts on when using a fractional CFO makes sense…and when it doesn’t, deeper insights into how the fractional accounting model works, or whether the fractional model is right for your organization. You may also be interested in non-profit success stories – explore our Thrive video series, now available on-demand.
If you have questions or would like to explore whether the fractional services model is right for you, get in touch. Our fractional accounting pros are here to help. We’d love to provide you with the immediate relief you need and the long-term guidance that will help your organization grow and scale.
