5 Steps to Increase Effectiveness for Not-for-Profit Leaders
Financial professionals face ever-changing business and regulatory challenges that necessitate a wider range of skills and competencies. This was a topic of discussion at this year’s AICPA Not-for-Profit Industry Conference. Outlined below are five ways to run your not-for-profit more effectively, inspired by our panel of nonprofit executives.
- Connect the mission with strategy. A not-for-profit’s success is measured not just by the strength of its balance sheet, but by its ability to execute its mission. . Keep in mind that mission-related decisions have financial implications. Before deciding on a fundraising campaign or a revamp to your program design, consider if the effort is fiscally sound and if it will bring you closer to achieving your mission. Because finance and mission goals are inseparable, leaders must have a deep understanding of operational complexities.
- Think holistically. Leading change requires more than just technical skills. Today’s financial leaders need to be adept communicators and adaptable in order to bring about transformation. Delivering results in a fast-paced environment means focusing on both preserving financial viability and thinking holistically about strategies needed to drive results. Many Chief Financial Officers report spending the majority of their time tackling big picture issues rather than detail oriented technical ones.
- Remember messaging and mentoring are key to attracting and retaining talent. Most not-for-profits are unable to compete with the private sector in terms of compensation. However, you can make up for that by fostering a strong organizational culture that provides meaningful opportunities for growth. Millennials are the largest generation in the U.S. labor force today. Surveys indicate that millennials are motivated to work at not-for-profits partly because they are attracted to a particular cause and want to make a difference. Use this knowledge to tailor the messaging your organization uses for recruiting. Once you have recruited staff, involve them as much as possible. Include them in upper management meetings when appropriate. Make sure that you have support systems in place that foster nurturing and advancement.
- Embrace the trend toward integrated reporting. Stakeholders want to see how they are getting a return on their investment of time, money or resources to the organization’s cause. To remain competitive, not-for-profit leaders need to understand their stakeholders’ needs. Supporters and constituents of not-for-profits want more than just traditional financial reports—they want to understand impacts. Integrated reporting goes beyond just financial results and provides a broader picture of how the entity creates and sustains value and, ultimately, achieves its mission. These reports can also form the basis for more meaningful and effective communications to engage external stakeholders.
- Focus on communications to garner support and raise awareness. Historically, charitable organizations have relied on emotional appeals to attract supporters, but there has been a shift in this approach. You can help fine-tune your organization’s messaging to appeal not just to emotion, but to facts and logic as well. Word of mouth lends even greater credibility. Do not just think of contributions as merely time and money, but also the value of a voice. Help your supporters, including board members and volunteers, find the right words to articulate the mission and organizational results as well as outcomes. Ultimately, this expanded voice will lead to growth and scale beyond what the organization could accomplish alone.
If you want to learn more about best practices for not-for-profits, I recommend AICPA’s online e-learning course, “Aligning Mission with Strategy.” This course is offered individually or as part of the AICPA Not-for-Profit Certificate Program. Members of the AICPA Not-for-Profit Section are eligible for a 20 percent discount.
Sandi Matthews, CPA, CGMA, Technical Manager- Not-for-Profit Section, American Institute of CPAs.