Historically, nonprofit CFOs fell into three categories based on the limited scope of responsibilities required by their firms. There was the accountant, or bookkeeper, CFO, whose role basically amounted to keeping track of where the money went. There was the financial planning and analysis CFO, who managed budgeting and future funding needs. And there was the fundraising CFO, whose primary role was to generate donations. Rarely did a nonprofit CFO candidate possess all three skills in equal measure.
Today, however, nonprofit CFOs need all of those qualities and more. Kate Shattuck, a senior client partner and co-leader of Korn Ferry’s Impact Investing practice, says nonprofit CFO candidates are expected to demonstrate prior experience helping an organization strategically plan for and invest in future growth, which includes developing new products and services. At the same time, they must demonstrate an understanding of the organization’s donation cycle, the differences between restricted and unrestricted and other forms of donations, and the nuances of public-private partnerships, among other responsibilities.
While in the past the minimal mandates of the nonprofit CFO role limited the appeal of the position, the new challenges and prominence it is gaining are attracting a wider pool of candidates. From millennials who want to align work with purpose to wealthy corporate executives looking to give back to older CFOs not yet ready to retire, more and more CFO candidates are expressing interest in the nonprofit world.
“CFOs can engage in a real range of activities in a nonprofit organization, and their work can often be broader and more demanding than with the average for-profit company,” says Shattuck.
One example: the Low Income Investment Fund (LIIF), a national nonprofit community- development financial institution that acts as an intermediary between low-income communities and the capital markets, providing financing to everything from affordable housing to child care to healthcare and education. It has invested $2.5 billion and helped access an additional $12.5 billion for projects, helping create 160,000 jobs, 78,000 affordable housing units, and school slots for 98,000 K–12 students, among other initiatives.