Should Your Nonprofit Hire a Full-Time or Fractional CFO?
Discover whether a fractional CFO or a full-time CFO is right for your nonprofit. Compare cost structures, responsibilities, and organizational fit.
Operating Reserves Done Right: Planning, Policies, and Board Buy-In
No matter your size or mission, every nonprofit needs operating reserves. But how much is enough? And how do you convince your board it’s not just okay to use them—but essential?
Nonprofit Board Myths, Truths, and the Path to a Board That Works
In this candid and honest conversation on A Modern Nonprofit Podcast, Tosha Anderson chats with ENGin founder Katerina Manoff about the realities of nonprofit board leadership—and how to finally create a board that serves your mission instead of slowing it down.
Fundraising vs. Sales: What I Wish I Knew about Sales When I was a Fundraiser
Fundraising is not sales. That’s what I told myself for years. And then I left the nonprofit world and entered the for-profit sector—and I realized just how wrong I was.
The Benefits of Fractional Executives for Nonprofits
Nonprofit leaders are burned out. Budgets are tight. Teams are stretched. Yet strategy, execution, and accountability can’t wait until the next big grant hits.
Your Nonprofit Training Isn’t Working—Here’s How to Fix It
In a nonprofit world defined by high turnover, tight budgets, and relentless mission work, training is too often an afterthought. We wait for a crisis, then scramble to “train” our way out of it.
Top 5 Signs Your Accounting Is a Mess (And How to Fix It)
When your nonprofit’s finances feel off—but you can’t quite put your finger on why—it’s often because the accounting system is quietly unraveling behind the scenes. And if your gut is telling you something’s wrong, it probably is.
Why Every Nonprofit Needs a Skilled Accounting Team
When you’re running a nonprofit, it’s tempting to think of accounting as something you can “get by” with—maybe it’s a part-time admin, a volunteer with QuickBooks experience, or a reactive scramble at tax time.
Building a Grant Team That Works: The 6 Roles Every Nonprofit Needs
Too many nonprofits are flying solo, reacting to deadlines instead of building a system that works.
Strategic Fundraising Doesn’t Start with the Ask—It Starts with the Plan
In a sector dominated by last-minute appeals and burnout-inducing gift cycles, Mandy Moody wants you to know there’s a better way.
Build a Strong Leadership Team with Financial and Operational Accountability
Behind every financially sound nonprofit is a leadership team that doesn’t just care about the mission—but also owns the outcomes.
Is Your Leadership Holding Back Your Nonprofit?
We don’t like to talk about it—but we should. Sometimes, the biggest obstacle to transformation in a nonprofit isn’t lack of funding, staff turnover, or outdated systems. It’s leadership.
Is Your Website Working for You? The Nonprofit Guide to Smart Digital Marketing
If you’re a nonprofit leader feeling overwhelmed by digital marketing—or unsure if your website is even helping you anymore—this episode of A Modern Nonprofit Podcast is for you.
The Nonprofit Budget Balancing Act: Crafting Budgets for Fundraising Success
When it comes to securing funding, your budget serves as a narrative tool, helping funders understand your mission, your needs, and your impact. But the challenge lies in the fact that not all funders want to see the same story.
Tired of Juggling 10 Systems That Don’t Talk to Each Other? Here’s the Fix
Does your nonprofit rely on a patchwork of systems—Google Sheets, Eventbrite, Mailchimp, Canva, Salesforce, and five others—to keep things running?
Federal Single Audits: The Top 7 Findings
When it comes to Federal Single Audits, nonprofits often make costly mistakes that lead to compliance issues, financial weaknesses, and material deficiencies.
The Charity CFO Financial Blueprint: What the Best-Run Nonprofits Have in Common
At The Charity CFO, we’ve worked with hundreds of nonprofits (if not thousands)—and reviewed thousands of financial systems—over the past decade. From grassroots organizations to $20M+ institutions, we’ve seen firsthand what sets high-performing nonprofits apart.
Personal Branding for Nonprofits: Why Leaders Can’t Afford to Stay Invisible
In this episode of A Modern Nonprofit Podcast, Tosha Anderson and branding expert Seth Donlin unpack why personal branding is no longer optional for nonprofit leaders—and how it can drive deeper donor engagement, visibility, and trust.
Nonprofit Fraud: And What an Audit Won’t Catch
Think your nonprofit is safe from fraud? Think again. Fraud happens in nonprofits far more often than leaders realize—and it’s not just the obvious scams.
Is Your Nonprofit Ready for Increased Funding Scrutiny? Here’s How to Prepare
Is Your Nonprofit Ready for Increased Funding Scrutiny? Here’s How to Prepare
The financial landscape for nonprofits is shifting, and the pressure is mounting. With government funding and donor contributions facing heightened scrutiny, nonprofit leaders must ensure their financial systems are rock solid. Every dollar spent is under the microscope, and transparency is no longer optional—it’s essential.
Having worked in the nonprofit sector for over 15 years, I’ve seen firsthand how quickly organizations can come under fire for financial mismanagement—sometimes even when they’ve done nothing wrong. Donors and grant providers want proof that funds are being used responsibly and efficiently. The good news? You can prepare for this increased scrutiny and protect your nonprofit by implementing smart financial strategies today.
Why the Pressure on Nonprofits Is Increasing
In today’s climate, nonprofit funding comes with more strings than ever. Government regulations are tightening, and donors are demanding more accountability. From federal grant compliance to donor transparency expectations, nonprofits must meet a growing list of financial integrity standards.
The bottom line? If your organization doesn’t have airtight financial oversight, you’re at risk of losing funding. Now is the time to adopt a fail-proof financial strategy to avoid common pitfalls and set your nonprofit up for long-term success.
6 Critical Strategies for Navigating Funding Scrutiny
1. Strengthen Your Procurement Policies
A structured procurement process is essential to ensure fair and ethical vendor selection. Implement policies for competitive bidding and vendor selection to prevent conflicts of interest. Avoid awarding contracts to board members, employees, or close personal connections to maintain credibility.
2. Implement a Strict Conflict of Interest Policy
Every nonprofit should require board members and key leadership to disclose conflicts of interest annually. This not only builds trust but also prevents ethical and compliance issues that could put your funding at risk.
Pro Tip: Always document potential conflicts and establish a process for handling them transparently.
3. Keep Every Receipt, No Exceptions
Whether it’s a small office supply purchase or a major equipment investment, maintain records of every expense. This ensures accountability and makes audits or donor inquiries easier to manage.
Pro Tip: Use expense management software like Bill Spend and Expense to track and categorize expenses automatically. It allows for individual spending cards, built-in approvals, and easy receipt tracking.
4. Enforce Strong Internal Controls
Without internal controls, nonprofits are vulnerable to financial mismanagement and fraud. Establish clear approval processes for all financial transactions, including vendor payments and employee reimbursements.
Pro Tip: Leverage expense approval tools to ensure all vendor invoices and credit card transactions are reviewed and approved at the appropriate levels.
5. Master Your Budgeting Process
Know exactly what your grants and funding cover—and what they don’t. Misallocating funds can lead to compliance violations and loss of trust from funders. Maintain strict budget oversight and ensure spending aligns with your organization’s mission and restrictions.
6. Maintain Detailed Financial Reporting
Your nonprofit’s accounting system should allow you to generate detailed reports on every dollar spent. If you don’t have real-time access to financial reports, it’s time to upgrade your processes or invest in better financial management technology.
The Power of Financial Transparency
Strong financial reporting isn’t just about compliance; it’s a strategic advantage. Nonprofits that prioritize financial transparency can:
- Build stronger trust with donors and grant providers
- Make informed, strategic decisions to drive impact
- Strengthen their fundraising efforts with credible financial data
At The Charity CFO, we specialize in helping nonprofits navigate audits, donor scrutiny, and financial management challenges. With 85% of our clients undergoing audits, we know how critical it is to have a robust accounting foundation in place.
Take Action Now
The financial pressure on nonprofits isn’t going away, but you can take steps today to protect your organization. By implementing these financial best practices, you can stay compliant, build trust, and ensure your nonprofit thrives despite increasing funding scrutiny.
Need help getting your nonprofit’s financials in order? Let’s talk. At The Charity CFO, we help nonprofits streamline accounting, meet compliance requirements, and focus on their mission.
Book a free consultation and we can see how we might be able to help!
Check these blogs out next:
Best Practices when Accounting for Grants
How to Create a Nonprofit Operating Budget
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Prioritizing Wellness and Community: My Strategy for Self-Care during the Busy Months
Like many leaders of business, I find myself having seasonal ebbs and flows with work demands. It’s no secret that accountants have a “busy season”. I get asked all the time – how do you survive the busy season of accounting? For accountants, it’s typically January through April. Not only is this a busy volume of work to get done – it’s a double whammy being in the Midwest with the dark and gloomy cold weather days.
So, the question is, how do I survive this season? How do I stay motivated? How do I keep my energy high? While it’s taken me many years, some coaching, and a lot of habit building to get there, I think I’ve landed on a routine that works. Let me share some of my favorite tips…
Integrating Wellness into Professional Life
Staying healthy – especially in a high demanding job – is an undertaking. Keeping my physical fitness and mental wellness in top shape is an entirely separate job. A job that I take very seriously. Here are the key components of my wellness strategy:
- Light Exposure: I start each day with natural or artificial light to help reset my internal clock and improve mood and focus. Most mornings, you’ll find me reading a book for 30 minutes in front of my artificial light.
- Physical Activity: Regular exercise, including weight training and daily walks, is non-negotiable. It keeps my energy levels high and my mind clear. When the weather doesn’t cooperate, you’ll notice me walking on my desk treadmill.
- Nutrition: I pay close attention to what I eat and drink, balancing caffeine and nutrients to fuel my long days without the crash. While the food is important, I argue that hydration is everything. If you are living on caffeine and skipping the water, you will hit a wall.
- Social Interactions: Maintaining social connections is crucial, especially during winter. Whether it’s attending events, connecting with friends, or meeting peers, staying social helps avoid the slump that can come with colder, darker days. Social interactions are often the first to go when our energy is low – however, it might be the exact thing you need.
- Streamline Easier Tasks: as an owner of a few businesses, I have leveraged technology to make sure the easy tasks stay easy. At The Charity CFO, the most significant tool to keep my/our work easier is Quickbooks Online. It streamlines our operations and client management so effectively that it frees up time—time I use to focus on growth and wellness. We use Quickbooks Online for everything financial at The Charity CFO – from bookkeeping tasks to running getting that final P&L over to our tax team each year and even processing 1099s each January. Keeping things streamlined makes my year-end close so much easier. This might come as a surprise to many, but yes, even during the busiest times of the year, I’m able to step away and invest in myself and my business. Which brings me to my next point…
- Step Away: Knowing that I hit a wall with the darker, colder days, I intentionally plan trips to warmer weather climates in the fall for the upcoming months. Getting these on my calendar ahead of time guarantees I actually make it there.
The Power of Community and Strategic Retreats
Prioritizing your wellbeing is a critical component but let’s shift gears to focusing on working “on the business” rather than “in the business”. I set annual and quarterly goals each year for The Charity CFO. We keep track of our progress as we move through the year. That said, it is important to take time away to reflect on those goals, identify the current and biggest issues in the business, and connect with others that are going through a similar journey.
This year, I took that time to connect with fellow accounting firm owners in sunny Fort Lauderdale. This wasn’t just a getaway; it was a strategic retreat, a deliberate step to build a supportive community and brainstorm innovative business strategies. We shared challenges, exchanged growth tactics, and discussed how to enhance our services—all while soaking up some much-needed vitamin D.
It’s imperative that not only should you carve out time to sit in the quiet and be strategic about the organization you lead – but to also connect with peers doing the same thing. The camaraderie and fellowship helps keep your sanity simply by knowing you aren’t alone. Added bonus? You can find ideas from others that might help you solve some of your own problems.
Looking Forward
As we continue through 2025, my commitment is to maintain this balanced approach, ensuring that wellness and community interaction are not sidelined but are integral parts of how we operate at The Charity CFO. This approach not only sustains our team but also drives our success, proving that you can indeed have it all—professional success, personal well-being, and active community involvement.
I encourage you to consider what kind of habits and tricks you can incorporate into your day-to-day life to make sure you take care of yourself – so that you can take care of your team.
This is a paid partnership with Intuit.
Nonprofit Budgeting 101
Nonprofit budgeting may be a source of dread for many, but there are ways to make the process (and outcome!) much better.
Forget about the numbers for a second. A well-crafted budget is a reflection of your mission and a roadmap to financial sustainability. It helps you communicate how you’re going to make the difference you want to see in the world. It can be a tool to galvanize your team, community, and supporters.
Keeping that in mind, let’s go over what we’ve learned at The Charity CFO While supporting hundreds of nonprofits with their budgets.
If you prefer to watch a video on this topic, check out this webinar on Youtube.
1. Start with Your Mission
Your nonprofit’s budget exists to advance your mission.
The decisions you make about revenue and expenses should always align with your organization’s goals and the impact you’re striving to achieve.
- Use your mission, vision, and values as the compass to guide financial priorities.
- Regularly evaluate whether your budget reflects your strategic goals and KPIs.
- Identify and address areas where budget priorities may drift from mission objectives.
- Incorporate feedback from stakeholders to ensure alignment between financial decisions and community impact.
2. Understand Core Budget Categories
Every nonprofit budget has a few building blocks. Most will include these areas:
- Revenue Streams:
- Diversify your income sources to reduce reliance on a single funder. Incorporate grants, donations, earned revenue from social enterprise activities, and more.
- Keep a clear distinction between restricted and unrestricted funds, ensuring you comply with donor intentions while maintaining operational flexibility.
- Program Expenses:
- These are the costs directly tied to delivering your mission. They often include program supplies, salaries for program staff, and other necessary expenses.
- Administrative Costs:
- Operational essentials such as technology, office supplies, and HR fall into this category. Though sometimes seen as “overhead,” these expenses are vital for keeping your nonprofit running smoothly.
- Fundraising Costs:
- Budget for donor engagement, events, campaigns, and marketing to sustain and grow your funding.
3. Prioritize Cash Flow Management
Even a great budget can fall short without strong cash flow management. Cash flow ensures your organization can meet its obligations month-to-month.
- Plan for Seasonal Fluctuations: Map out expected income and expenses by month to anticipate and prepare for lean periods.
- Build Reserves: Strive for at least 90 days of operating cash on hand to navigate unexpected challenges or delays in funding.
- Monitor Restricted Funds: Ensure compliance with donor restrictions to avoid operational bottlenecks and keep programs funded appropriately.
4. Collaborate Across Teams
Budgeting shouldn’t happen in isolation. Involving key stakeholders ensures transparency and accountability. Plus, collaboration fosters a culture of shared responsibility, ensuring everyone works toward the same goals.
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- Engage Department Heads: Involve program managers and department heads in the budgeting process to give them ownership over their areas’ financial planning. Encourage department heads to regularly review financial reports for greater accountability.
- Encourage Others to Contribute: While leadership teams may be the main point of contact, other employees and stakeholders should certainly contribute their ideas. Provide ways for them to share ideas and feedback in the event their ideas don’t align with the rest of their team. Diversity of opinions can strengthen your budget.
- Provide Financial Literacy Training: To department heads and anyone else in the organization interested in being part of the process and empowering better decision-making.
- Leverage Your Board: The reason your board exists is strategic oversight and supporting your team in these matters. Ensure board members with relevant expertise assist with budget ideas, reviews, and of course partnerships and fundraising.
5. Plan for Growth and Uncertainty
It’s no secret that nonprofits often operate in unpredictable environments, so your budget should be flexible enough to adapt to growth opportunities and unexpected shortages.
- Use Historical Data: Analyze past financial data to identify trends and anticipate future needs.
- Build Flexibility: When possible, leave room in your budget for unexpected opportunities or challenges. A contingency fund can help absorb surprises without derailing your mission.
- Regular Reviews: Regularly compare actual performance against the budget and make adjustments as needed to stay on track.
6. Leverage Technology
Modern technology can simplify budgeting and financial tracking for nonprofits. There’s no reason to do the grunt work when a computer program exists to do it in less time and with more accuracy!
- Use Nonprofit-Specific Tools: Platforms like QuickBooks for Nonprofits or Blackbaud to streamline financial management and reporting.
- Regular Reporting: Develop a system that regularly reports income, expense, and cash flow reports to get real-time insights into your financial health.
- Simplify Visuals: Clear, simple financial reports make it easier for stakeholders to understand and engage with your budget.
7. Communicate the Budget’s Impact
Your budget should be used as a communication tool for donors and stakeholders. Don’t keep it hidden in a folder on your computer, bringing it out only for emergencies or quarterly reports. Make it a regular tool that you refer to in your activities.
- Highlight Outcomes: Show how budget decisions directly drive mission outcomes.
- Use Clear Narratives: Combine visuals and storytelling to connect financial stewardship with the community impact your nonprofit creates.
- Build Donor Trust: Transparency about your budget fosters trust and strengthens donor relationships, encouraging long-term support.
The Charity CFO Can Help Make Budgeting a Breeze
A thoughtful budget is the foundation of your nonprofit’s financial health and mission success. By aligning your budget with your mission, prioritizing cash flow, and leveraging technology, you’ll build a strong, sustainable organization that’s ready to tackle challenges and seize opportunities.
At The Charity CFO, we’re here to help you master nonprofit budgeting. Whether you need help creating a budget, managing cash flow, or aligning your financial plans with your goals, our team is ready to support you.
Ready to take control of your nonprofit’s financial future? Schedule a free consultation with The Charity CFO today and let’s build a budget that empowers your mission.
Accounting as a Shared Responsibility? Why the Most Effective Nonprofits Share Financial Management Across Leadership Teams
Many nonprofit leaders think accounting belongs solely to their CFO or accountant. If you’re a particularly small organization, it may even be the CEO who wrangles an accounting spreadsheet every once in a while.
But what if the key to financial clarity and stability lies in sharing the load?
The truth is, many successful nonprofits empower leaders to manage their own department budgets.
Does this fill you with doubt and worry?
It can be hard to imagine this working in some settings, but it can be done with excellent results in many organizations!
In this article, we’ll explore why financial management is a shared responsibility and how nonprofits can use this strategy to drive their missions forward.
Why Shared Financial Responsibility Matters
A single CEO, CFO or accountant should not hold all financial knowledge. Teams need collective accountability to stay agile and informed. By decentralizing financial responsibility, nonprofits unlock powerful advantages including:
- Increased Transparency: Leaders who understand their budgets reduce the risk of financial mismanagement and foster trust within the organization.
- Improved Decision-Making: Department heads equipped with financial data can align spending with strategic goals, ensuring every dollar is used effectively to further the mission.
- Empowered Teams: When leaders own their budgets, they’re more engaged and motivated to achieve results, growing in confidence and making decisions grounded in financial insights.
- Improved Succession Planning: The world doesn’t collapse if a key team member needs to take a short or longer leave of absence.
- Enhanced Donor Trust: Transparency in this approach reassures donors and stakeholders that their contributions are being managed wisely, because each team has a strong understanding of their finances, strengthening relationships and encouraging continued support.
- Mission-Driven Focus: With financial clarity, leaders can focus their energy on creating an impact in their communities with less uncertainty or confusion.
Common Challenges & Solutions
Challenge #1: Fear of Overloading Leadership Teams
This may be one of the main reasons a nonprofit would be hesitant to increase shared responsibility for accounting at their organization.
Your team works so hard and already has so much on their plates.
The last thing we want to do is increase stress, burnout, or take away from core responsibilities.
Solutions:
- Explain the benefits to the individual and their department.
- Nonprofit leaders with hands-on financial literacy and experience are often sought after as leaders, consultants, and board members.
- Team leaders don’t need to feel like the finances are a mystical silo when they are playing a direct role in tracking and understanding what’s happening. This allows them to better plan, advocate, and support their team in real-time.
- Explain the benefits to the organization.
- Share our list above to help them understand the rationale behind accounting as a shared responsibility.
- Leaders can better understand what’s going on in other departments and perhaps come up with innovative strategies to better serve the whole team when they have more ownership of the accounting.
- Make it clean, simple, and easy. Provide clear, consistent financial reports and templates tailored to each department’s needs. Intuitive cloud-based software makes accessing and understanding these reports easier than ever.
Challenge #2: Knowledge Gaps in Financial Literacy
Some leaders may feel unprepared to take on financial responsibilities. Without proper training or support, it could indeed be a daunting and stressful task.
Solutions:
- Offer training focused on nonprofit-specific financial concepts like grant tracking, donor restrictions, and cash flow management.
- Create opportunities for ongoing mentorship and workshops to build confidence over time.
- Create clear lines of communication so they know who to reach out to for financial support – whether it’s the accountant, software provider, or another team lead.
Challenge #3: Resistance to Change
Leaders accustomed to traditional structures may hesitate to adopt a shared approach. Resistance to change is normal and to be expected in almost any situation. Approach team members feeling this way with empathy and kindness.
Solutions:
- Frame shared financial management as a way to advance the mission.
- Highlight how this approach aligns with organizational values and strengthens their impact.
- Ask for their ideas to make the transition smoother.
Steps to Implement Shared Financial Responsibility
- Start with Leadership Buy-In:
Communicate the benefits of a collaborative approach to financial management. Share success stories from other nonprofits that have adopted this strategy. - Standardize Financial Reports:
Develop easy-to-read templates for monthly department reports. Include actionable metrics like actuals versus budget, upcoming obligations, and cash flow trends. - Provide the Right Tools:
Equip your team with modern nonprofit accounting software. Automate repetitive tasks to save time and minimize errors. - Offer Training & Support:
Host onboarding sessions for new leaders and provide regular check-ins with CFOs or financial consultants to answer questions and address concerns. - Build a Feedback Loop:
Encourage department heads to share insights, challenges, and suggestions for improvement. Use their feedback to refine processes and ensure the system works for everyone.
Your Team Can Do This – An We Can Help
Accounting isn’t just the CFO’s job—it’s a team effort. By empowering your leadership team to share financial management responsibilities, you’ll build a stronger, more agile organization ready to tackle challenges and achieve your mission.
Take the first step toward shared financial responsibility by scheduling a consultation with The Charity CFO. Our team will help you modernize your systems, train your leaders, and guide your nonprofit toward a more sustainable future.
Ready to empower your leadership team with financial clarity? Book your free consultation today!
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The Difference Between Traditional Payroll and a PEO for Nonprofits
As a nonprofit leader, you’re constantly looking for ways to streamline operations and maximize resources. When it comes to managing your organization’s workforce, you have two primary options: traditional payroll services or a Professional Employer Organization (PEO).
No matter which direction you end up going, it’s crucial to understand the importance of payroll compliance. As a nonprofit organization, there are many pitfalls around payroll and you need to be aware of the rules.
To learn more about the do’s and don’ts around payroll, check out this resource.
Traditional Payroll Services: The Basics
Traditional payroll services focus primarily on processing your organization’s payroll. This includes calculating wages, withholding taxes, and ensuring timely payments to employees. Many nonprofits handle payroll in-house or outsource to a payroll provider. Here’s what you can expect from traditional payroll services:
- Payroll Processing: Calculation of wages, overtime, and deductions.
- Tax Withholding and Reporting: Managing federal, state, and local tax withholdings and filings.
- Direct Deposits or Check Printing: Ensuring employees receive their pay on time.
- Basic Reporting: Providing payroll reports for your accounting and record-keeping needs.
While traditional payroll services can be cost-effective for smaller nonprofits, they often lack the comprehensive HR support that growing organizations need.
Professional Employer Organizations (PEOs): A Comprehensive Approach
A PEO takes a more holistic approach to workforce management. By entering into a co-employment relationship with your nonprofit, a PEO becomes the employer of record for your staff. This arrangement allows the PEO to offer a wide range of services beyond basic payroll processing. Here’s what a PEO typically provides:
- Full-Service Payroll: All the features of traditional payroll services, plus more advanced reporting and analytics.
- Human Resources Management: Assistance with hiring, onboarding, performance management, and compliance.
- Benefits Administration: Access to better, more affordable benefits packages typically reserved for larger organizations.
- Risk Management and Compliance: Help with workers’ compensation, safety programs, and staying compliant with labor laws.
- Training and Development: Resources for employee training and professional development.
Key Differences for Nonprofits
When deciding between a traditional payroll and a PEO, nonprofits should consider several factors:
1. Cost Structure
- Traditional Payroll: Usually charges a per-employee or per-check fee, which can be more predictable for budgeting purposes.
- PEO: Often charges a percentage of total payroll, which can be more expensive but includes a broader range of services.
2. Employee Benefits
- Traditional Payroll: Your nonprofit is responsible for sourcing and managing benefits packages.
- PEO: Offers access to better benefits at potentially lower costs due to economies of scale.
3. Compliance and Risk Management
- Traditional Payroll: Provides basic tax compliance, but your organization remains responsible for most HR compliance issues.
- PEO: Takes on much of the compliance burden, helping to mitigate risks associated with employment laws and regulations. This includes things like registering in new states when you hire employees.
4. HR Support
- Traditional Payroll: Minimal to no HR support; your nonprofit needs to handle HR functions internally or hire separate consultants.
- PEO: Comprehensive HR support, including policy development, employee handbooks, and conflict resolution.
5. Scalability
- Traditional Payroll: Can work well for small to medium-sized nonprofits with stable workforce needs.
- PEO: Often better suited for growing nonprofits or those with complex HR needs and remote teams across the country with complex compliance.
Considerations for Nonprofit Organizations
When evaluating your options, consider these nonprofit-specific factors:
- Mission Focus: A PEO can free up more time for your team to focus on your nonprofit’s mission by handling HR and administrative tasks.
- Grant Compliance: Ensure that either option can provide the detailed reporting often required for grant compliance.
- Volunteer Management: While not typically part of payroll services, some PEOs offer solutions for managing volunteers alongside paid staff.
- Seasonal Fluctuations: If your nonprofit experiences seasonal changes in staffing, a PEO might offer more flexibility in scaling services up or down.
- Board Oversight: Consider how each option facilitates financial transparency and reporting to your board of directors.
Making the Right Choice for Your Nonprofit
Ultimately, the decision between traditional payroll and a PEO depends on your nonprofit’s unique needs, size, and growth trajectory. Here are some guidelines:
- Choose Traditional Payroll If:
- Your nonprofit is small with simple HR needs
- You have a stable, long-term workforce
- You prefer to keep HR functions in-house
- Cost is your primary concern
- Choose a PEO If:
- Your nonprofit is growing rapidly
- You want to offer better benefits to attract and retain talent
- You need comprehensive HR support and compliance assistance
- You’re looking to reduce administrative burden on your leadership team
- You are bogged down with the compliance of employees across multiple states
Remember, the goal is to find a solution that allows your nonprofit to operate efficiently while remaining compliant with all relevant laws and regulations. Whether you choose traditional payroll or a PEO, ensure that the provider understands the unique needs of nonprofit organizations.
At The Charity CFO, we understand the complexities of nonprofit finances and operations. While we specialize in nonprofit accounting and bookkeeping, we recognize the importance of efficient payroll and HR management in the overall financial health of your organization. If you’re struggling with payroll issues or considering a switch to a PEO, our team can help you analyze your options and make the best decision for your nonprofit’s future.
Don’t let payroll and HR challenges distract you from your mission. Focus on making a difference in your community, and let the experts handle the rest. Schedule a consultation with The Charity CFO today to discuss your nonprofit’s financial management needs and explore how we can support your organization’s growth and success.
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