In most industries, you work your way up through the ranks, learning from those who came before you. But in nonprofits, it doesn’t always work that way. A founder can often find themselves sitting in the Executive Director’s chair without any prior management experience, or even an idea of how the organization needs to run.
And that’s the experience that Miki Reynolds had when she took over the reins of her organization, Grid 10.
After a career in supporting roles, she suddenly found herself in charge of the show. And had to overcome battles with imposter syndrome, financial mindset, learning to ask for help, and more.
Her story covers many of the common struggles that Executive Directors face, and in this episode, she’ll walk you through how she overcame her biggest obstacles so you can learn from her experience.
Miki is the Executive Director and founding member of Grid110, an organization that provides entrepreneurs with access to community mentors and critical resources through no cost equity programs.
Join her for a wide-ranging conversation and practical approaches to problems you may be facing today.
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There are more than 1.54 million nonprofits globally. To ensure that a nonprofit runs efficiently, several people work behind the scenes to make things much easier, and one of those people is the operations manager.
The operations manager might be the secret weapon of the most successful nonprofits we know. By taking charge of getting things done, an operations manager helps executive directors focus their energy on the strategic big-picture that will move their mission forward.
If you’re looking to enter the world of nonprofit organizations with a background in operations management, you might be wondering how your skills can help you. Or, if you’re a nonprofit founder or an executive director, you might be wondering how an operations manager can help make your organization ruthlessly efficient and highly effective.
Read on now to find out what the job description of a nonprofit operations manager might look like.
What does an operations manager do?
A nonprofit operations manager, or director of operations for a nonprofit, is responsible for the day-to-day operations of the organization.
They oversee the administrative staff and make sure that the office runs smoothly. They also develop and implement operational procedures and systems and manage budgets and financial reports. In short, they ensure that the nonprofit runs like a well-oiled machine!
Now, if that sounds like they do a bit of everything, it’s because that’s true!
An operations manager, by definition, is a manager. They don’t necessarily need to be an expert at any one thing. Still, they need to be able to be proficient enough at many things to manage a highly productive team to get results for their organization.
Here’s how Krysta Grangeno described her day-to-day tasks in operations for a nonprofit organization:
Who reports to the operations manager? And who do they report to?
It depends on the organization, but generally, any department is responsible for the day-to-day operations of the entity. That may include
Finance Department
Fundraising Department
Program directors
Human Resources
Information Technology
And more!
You can see that, depending on the size and structure of your organization, the ops manager will have to oversee a large number of departments.
In turn, your operations manager will either report to the Director of Operations, the Chief Operating Officer (COO), or directly to the CEO or Executive Director. They may also have some direct interaction with the Board of Directors, although the board isn’t technically their supervisor.
What are the job responsibilities of a nonprofit operations manager?
As mentioned above, their primary role is to supervise and organize the efforts of the departments under their responsibility. Here’s a breakdown of what duties a nonprofit operations manager will be expected to handle:
Ensure the Office Runs Smoothly
The administrative staff is responsible for keeping the office organized and running smoothly on a day-to-day basis. The operations manager will make sure that they have everything they need to do their job effectively and that they are meeting all deadlines.
An operations manager must be exceptionally well organized, as they’ll be responsible for creating systems and processes that ensure every department is meeting its expectations. Often, they’ll also need to be aware of all legal or reporting requirements that the organization may have in executing their programs.
Implement Budgets and Oversee Financial Strategy
The operations manager will be responsible for spearheading the budgeting process for the organization and ensuring that the accounting department delivers timely and accurate financial statements for the board of directors or other stakeholders. You’ll also need to be intimately familiar with these statements as well and review them proactively to identify potential issues before they become problems.
As the operations manager, part of your role is to ensure that the financial department runs effectively. This includes ensuring that checks and balances are in place and that employees in the financial department are adequately trained to do their jobs.
The operations manager must also be acutely in-tune with the organization’s budget. Because their role is so wide-reaching, they need to be aware of how shortfalls in one area (like fundraising) may impact the ability to execute in others (like executing programs or meeting payroll).
That doesn’t mean that the operations manager needs to be an accountant. Generally, they’ll oversee the accounting team or work as a liaison with an outsourced accounting firm. But ultimately, they are responsible for ensuring that the accounting work is done correctly and on time.
Supervise Human Resources
Ideally, the operations manager’s role in human resources is limited to supervision, but that’s not always the case. In some smaller nonprofits, HR may get put completely onto the ops manager’s plate, but we’d recommend against it.
Human resources is a specialized field that requires experience and specific knowledge. You need to comply with employment law, collect the correct information, withhold taxes appropriately, and onboard and train new employees.
A knowledgeable HR professional should establish the policies and procedures for the human resources department, but many nonprofits can’t afford a full-time HR coordinator. That’s why many nonprofits choose to outsource their HR to external firms as well.
Even if you’re working with an external firm, the operations manager will probably need to be involved in many day-to-day items related to HR—like searching for employees to hire, interviewing, training, counseling, and terminating employees.
Manage Technology Integration
Technology is a massive part of the work that nonprofits do. Almost every person in your organization depends on technology. And the networks and systems that keep those people aligned take organization, security, and maintenance.
Depending on your mission, you may even be dealing with highly sensitive personal information that you have a legal responsibility to protect, even in digital form. As the operations manager, you’ve got to make sure the appropriate technology systems and controls are implemented throughout the business.
Not utilizing the proper systems could mean the loss of crucial data needed in the future. Or it could mean a crumbling IT infrastructure that can’t support the business model being implemented.
Nonprofits often don’t need, or can’t afford, an internal IT department. And relying on someone’s husband or nephew to fix problems isn’t an acceptable solution. Instead, many organizations outsource their IT department to a service provider. In this case, it’s the operations manager’s job to liaison with the IT provider to ensure the office gets the support it requires.
Ensure Compliance and Organization
Records need to be kept in order within any business. There are several reasons for this, but compliance is an important one for many nonprofits.
Your organization needs to comply with accounting regulations, legal restrictions, employment rules, and other industry-specific regulations. And the operations manager is ultimately responsible for ensuring that the company is prepared to prove its compliance when audited.
Not only does record organization help when something needs to be located, but it also speeds up business efficiency. Instead of wasting time hunting for something, it will be easy to access the record database. All you’ve got to do is type in some information and locate the data needed.
How to evaluate performance and further development
Whether you’re building the leadership team to include an operations roles, or you’re currently in an operational leadership role — it’s important to regularly evaluate performance as well as work on developing to further improve your work.
If you’re evaluating your ideal candidate, after they’ve been in the position for a certain period (a year, for example), it’s important to compare their achievements to the job description. For self-evaluations, read resources (like this one) to find usable knowledge to help improve your performance.
Key areas to concentrate your efforts include:
Purposeful communication: In operations, too much communication is nearly as problematic as not enough. What you say, how you say it, must be as useful as possible. That’s where developing purposeful communication tactics come in handy.
Organizational processes: As someone who ensures compliance and handles intricate areas of a nonprofit, the ability to develop processes takes precedence over nearly every other aspect of your role.
Continuing certifications: There are a number of nonprofit certificate programs available for leadership teams. Those instructing the programs often have robust experience in the sector. Taking these programs helps you find the additional knowledge to improve your performance.
A Note on Outsourcing Professional Services:
We’ve mentioned outsourcing a few times here, related explicitly to bookkeeping/accounting, human resources, and information technology. That’s because this is an emerging trend we see gaining steam in the industry.
Traditionally, many nonprofits had a scrappy, do-it-all mentality when it came to these areas. So, an operations manager or financial director frequently ended up having responsibility for everything— from making bank deposits and firing employees to troubleshooting network issues.
But this approach causes more problems than it solves. Having trained professionals handling complex tasks that are outside their area of expertise is hugely inefficient. And it’s just asking for mistakes.
Yet most organizations can’t afford a full-time accountant, HR coordinator, and IT professional. And that’s where the operations manager comes in.
When organizations outsource these 3 functions and have the operations manager work directly with each team, they can get the full professional support of each team without paying a full-time salary. Often, these teams are more talented and efficient than an internal team member would be.
We believe this is the operational business model of the future for successful mid-sized nonprofits in the $1M to $15M/year range. If you’d like to talk to us about outsourcing your bookkeeping and accounting to The Charity CFO, send us a message to set up a free consultation.
What Qualities Make a Good Operations Manager?
Let’s turn to Krysta again, to offer a first-hand perspective on what skills an operations manager needs:
What A Nonprofit Operations Manager Does: A Recap
A nonprofit operations manager has many responsibilities, but their primary role is to coordinate all the various departments to ensure that business runs smoothly.
The operations manager will oversee the finance department, human resources, information technology, programs, fundraising, and more. And they must grasp how each department impacts the other to ensure that the entire organization runs harmoniously.
By doing their job well and assuming responsibility, they free up each department to focus on what they do best, rather than overlapping tasks or getting tied up in work that’s unrelated to their department. They also help free up the directors to focus on strategy rather than the day-to-day minutiae of each department.
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If you know only one thing about 501(c)(3) nonprofit organizations, you probably know that they don’t pay federal taxes on their income.
But what if I told you that’s not always true?
It’s true that due to their uniquely valuable societal contributions, such as charitable actions or educational priorities, nonprofits receive tax exemption for income from activities substantially related to their primary purpose.
However, as detailed in Publication 598 of the Internal Revenue Service, income not directly related to their declared charitable purpose is subject to federal taxation. This is called the unrelated business income tax, or UBIT.
So how do you know if your nonprofit organization has taxable unrelated business income?
We’ll review the core principles of unrelated business income tax (UBIT) rules below, along with examples of income subject to taxation, to help you understand what it is and whether or not it applies to your organization.
What is Unrelated Business Income Tax (UBIT)?
Both federal tax exemption and the eligibility to receive tax-deductible contributions help your nonprofit achieve its charitable goals. But while these benefits have a positive impact on society, they can pose a temptation for some organizations looking to take financial advantage for personal gain.
As a result, Congress implemented the UBIT in 1950 to eliminate the unfair advantage tax exemption gave to nonprofits competing against for-profit entities in the same sector. The tax limits the advantage of nonprofits to their specified charitable purpose and prevents them from exploiting their benefits in the commercial sector.
For example, the UBIT prevents an entity such as a church from using its exempt status to open a store purely for profit with no charitable purpose. This is true even if the church uses those funds to fund programs in the community.
It is not, however, prohibited for your exempt organization to earn unrelated business income. If you receive gross income from an unrelated business reaching $1,000 or more, you simply need to complete and submit IRS Form 990-T and pay the required taxes.
If your organization expects it will need to pay $500 or more in tax for the year, then you must pay a quarterly estimated tax. The Form 990-W helps determine the required amount of estimated tax to pay.
Form 990-T and Form 990-W are in addition to your organization’s annual information return (Form 990, Form 990-EZ, or Form 990-PF).
IRS UBIT Requirements
UBIT rules apply to most organizations that gain tax exemption from section 501(a) of the Internal Revenue Code (IRC). The three main criteria for your tax-exempt entity’s activity to be considered an unrelated business are as follows:
Your activity is a trade or business that produces income via the selling of goods or services. Even if these activities occur under a greater umbrella of the organization’s tax-exempt purposes, they maintain their identity as unrelated trades or businesses as long as they generate gross incomes from distributing or producing goods or services.
The activity is regularly carried on, meaning that the organization pursues them with frequency and continuity, similarly to the manner in which non-exempt organizations pursue comparable commercial activities.
The activity is not substantially related to furthering the organization’s exempt, charitable purpose.
Special Cases & Exceptions
Most tax-exempt organizations must follow the UBIT requirements, including those in social welfare, advocacy, trade, veteran groups, labor organizations, and employee benefits.
However, some special cases fall under modifications, exclusions, or exceptions to unrelated business income, such as:
✔️ Volunteer labor
✔️ Convenience of members
✔️ Sale of donated merchandise or in-kind gifts
✔️ Corporations organized under Acts of Congress and are instrumentalities of the United States
✔️ Some charitable trusts not subject to private foundation taxes
✔️ Dividends
✔️ Interest
✔️ Certain investment income
✔️ Royalties
✔️ Certain rental income
✔️ Certain research activity income
✔️ Gains or losses from property disposition
✔️ Certain bingo games
It can get a bit complicated, but the Form 990-T Instructions give you more specifics on what constitutes an exception and what does not.
What Is Considered Excessive Unrelated Business Income?
Although nonprofits can earn profits from unrelated business activities, these profits can only make up a certain percentage of the nonprofit’s overall income.
This limit is not clearly defined, however. Instead, it is up to the IRS to determine if your percentage of total income coming from UBI is too high. In cases where the IRS is evaluating unrelated business income to determine adequacy, it considers various factors specific to the situation at hand.
Examples of Taxable and Non-Taxable Business Income
Example 1: Selling food and beverages
Related business income: If an organization sells food and beverages to its members, it would be considered part of the entity’s regular operations to further its purpose. The money earned goes towards paying back the expenses used to obtain the food for its members to work on their mission.
Unrelated business income: If the same organization sells food to non-members regularly to make additional profits without working towards its non-exempt purpose, then the income is unrelated and taxable.
Example 2: Charging for parking
Related business income: If an organization has a parking lot and it charges members to use during working hours, then this income is not taxable. The money earned goes toward paying the lot lease and provides a service to members who use their parked time for furthering the purpose of the organization.
Unrelated business income: However, if the entity decides to take advantage of its non-working hours by regularly opening the lot to non-members to turn a profit, then this income is subject to the UBIT. The money is no longer from and for members and is not necessary for furthering the organization’s purpose.
Example 3: Providing pay-for-entry entertainment
Related business income: Consider an organization such as a church that charges admission for a small fair or arcade in which themed games and activities educate the children of members on the church’s views and purpose. This activity specific to members and to the purpose of the church would not fall under UBIT rules.
Unrelated business income: If the same church ran a general arcade next door open to the public and with no educational aspect, then the resulting income would be subject to the UBIT.
Other forms of income which would be susceptible to the UBIT include proceeds from the liquidation of assets, the sale of resources found on the property of the exempt entity, income from paid advertising in the organization’s newsletter or publications, or the sale of unrelated merchandise to the public.
Each of these examples and those described above involve various factors that, if changed, could change the exempt status of the activity in question.
Not Sure If Your Nonprofit Income Is Taxable Or Not?
You should always consult your legal counsel or a qualified accounting professional before making decisions that could cost you a lot of money down the road.
But as a nonprofit, sometimes it’s not easy to find someone to answer your questions. We frequently hear stories of CPAs that don’t return their nonprofit clients’ phone calls or emails. Often, nonprofits get stuffed at the bottom of the pile.
If you’re tired of being the last priority of the financial professionals in your life, consider outsourcing your bookkeeping and accounting to The Charity CFO. We’ll modernize and optimize your accounting system to get you audit-ready financial reports every month.
And our team of former nonprofit CFOs and auditors are available to answer all your most challenging questions about tax liabilities, transparency, compliance, budgeting, and more.
Reach out to us today to see if outsourcing your bookkeeping and accounting can save you time, money, and stress.
In this episode, Tosha will walk you through the most common misconceptions about nonprofit audits to let you know exactly what you can expect (and NOT expect) from a nonprofit audit before you commit.
Audits scare the daylights out of nonprofit founders.
But at The Charity CFO, Tosha and her team need to prepare 50+ nonprofit partners for audits every year. Thankfully, they’ve got 5 former nonprofit auditors on staff, which means they know all there is to know about audits.
Listen to this episode to make sure you’re fully prepared for your audit!
Here’s a preview on YouTube:
To watch the full episode, click on the Spotify player above or search it wherever you get your podcasts.
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In this episode, Tosha will walk you through the most common misconceptions about nonprofit audits to let you know exactly what you can expect (and NOT expect) from a nonprofit audit before you commit.
Audits scare the daylights out of nonprofit founders.
But at The Charity CFO, Tosha and her team need to prepare 50+ nonprofit partners for audits every year. Thankfully, they’ve got 5 former nonprofit auditors on staff, which means they know all there is to know about audits.
Listen to this episode to make sure you’re fully prepared for your audit!
A lot of nonprofit leaders are asking us about how to prepare their organizations for the possibility of a recession.
So I decided to change up the format of my A Modern Nonprofit Podcast this week to talk directly to you about the steps you can take to prepare your organization for a potential recession:
First, you must understand if your organization bringing in more money than it is spending to see if your business is sustainable in the face of recession. If you’re currently spending more than you’re bringing in, you’ll slowly start whittling down your savings accounts. And then you’re living on borrowed credit through operating loans, lines of credit, credit cards, and things of that nature. If that is your case, I strongly encourage you to staff and figure out how you can flip things around to be consistently bringing in more than you spend over a long-term period, possible over the course of a year. Having a grasp on your cash flow is ALWAYS important, but even more so in the face of economic and fundraising uncertainty brought on by a global or national recession.
2. Keep Your Debt to a Minimum
This is another everyday principle that becomes doubly important when the state of the economy is uncertain. You don’t want to head into a recession with a business that’s overly reliant on debt. And it’s not just a matter of the health of your balance sheet, it’s about understanding, “What is this debt costing me?” As in, how much of your much-needed cash are you tying up in debt payments every month? Every quarter? Every year? Take a hard look at which debt you can pay off or restructure now to reduce your monthly payments. Ensure that you’ve got the cash to meet your obligations every month even if your cash inflows take a downturn due to macroeconomic factors beyond your control.
3. Increase Liquidity
Increasing liquidity means increasing your ability to tap into cash when you need it in the short term. In times of recession and uncertainty, it’s important that you have as much of your cash available as possible, as opposed to being tied up in long-term investments or blocked by donor restrictions. You should have at least 30 to 90 days of cash on hand, and don’t be afraid to lean toward the 90-day end of the spectrum if the recession intensifies or you experience a decrease in donations. If you don’t have 30 days of cash on hand, design a savings plan to get your cash balance to at least 30 days. And I’m not talking about 30 days on your very best day, right before that payroll…
You should have 30 days’ worth of cash on hand on your worst day after the last payroll hits and before your funding comes in.
4. Revisit Your Investment Strategy
I’m NOT an investment advisor, but anytime there is a change in the economic environment, you should check with your investment advisor to be sure your strategy is still appropriate. The risk of certain investments will intensify during a recession, so just be sure to make that phone call and get the professional advice you need.
5. Lock in Your Funding Early
When there is a recession on the doorstep, it makes sense to lock in your fundraising plan earlier rather than later. So start talking to your longstanding donors right away, let them know your plans, and make the ask now rather than at the end of the year. Many of them will be glad to give now and be thrilled that you’re making a proactive plan to weather the storm. If these folks are supporters of your work, they’ll be happy to do their part in ensuring your mission survives an economic downturn.
6. Create a Detailed Fundraising Plan
I can’t tell you how many times we’ve worked with nonprofits that say, “Well, we raised a quarter of a million dollars last year. So we’ll plan a 10% increase for this year and budget based on that.” But if you don’t have a plan for matching last year’s donations AND getting growth, then you don’t really have a plan. You have a dream. And recessions are dream killers. So I encourage you to start looking at who gave you money last year and where you think your money will come from this year. And then strategize how you are going to come up with those dollars. Set goals and track your progress month-by-month. That way, if you’re $10,000 behind on your annual fundraising goal in June, you’ll know. And you can identify why you’re behind. Is it because you missed out on a grant you got last year? A major donor missed a payment? Or a shift in your special event schedule? All of this boils down to knowing your numbers. Because no business–including nonprofit businesses– can operate successfully without knowing their numbers.
Is Your Nonprofit Recession-Ready?
By now, you should have a pretty good idea of whether you’re already prepared for a recession or if you’ve got work to do.
So now is the time to start making measured steps to ensure your nonprofit can continue to serve your community in the case that an economic recession does arrive in the near future.
At The Charity CFO, we provide CFO-level financial guidance for nonprofit organizations, in addition to done-for-you bookkeeping and accounting services. So If you’re not confident in your numbers, or need some help optimizing your bookkeeping and accounting, check out our website to learn more: www.thecharitycfo.com.
Watch or listen to this episode on A Modern Nonprofit Podcast:
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The finance committee plays a critical role in financial oversight, but it doesn’t stop there. Here are some tips to set your organization up for financial success.
Nonprofit finances don’t have to be scary. Jump start your financial education in just 5 minutes with this primer for nonprofit directors, board members and accountants.
During the “Great Recession,” nonprofits have lost their accountants and financial directors at record rates. And finding new, qualified help that they can afford is nearly impossible…
At the same time, hundreds of nonprofits are waking up to realize that the financial structure they’ve always relied on doesn’t work as well any more. And they’re tired of the hamster wheel of hiring, re-hiring, training, and re-training bookkeepers and accountants.
So why do accountants leave nonprofit organizations? And what can nonprofits do to create consistency and predictability in the financial side of their operations?
Triná Owens is a former nonprofit financial director who left her job to become an Accounting Manager at The Charity CFO. In this episode, she and Tosha tell you the top reasons that your accountants don’t stick around. And show you how modern nonprofits are rethinking the way they handle specialized skills like HR and Accounting.
In this episode, you’ll discover:
The top 3 reasons nonprofit accountants walk out the door
Why turnover in the financial department is SO damaging for nonprofits
The reason your finance director spends just 25% of their time on finances
Why HR compliance issues are a bigger risk than tax compliance for most organizations (and why you shouldn’t trust your accountant with HR)
Thanks for watching. Be sure to subscribe for new episodes every week!
👇 Or scroll below to read the full transcript of our conversation
A Modern Nonprofit Podcast Why Do Nonprofit Accountants Quit?
4/15/2022
Tosha Anderson:
Hey friends. Welcome back to another episode of a modern nonprofit podcast. I, I say this every single episode, but I’m super excited to talk about this. Um, Sharon, a little bit about my story, but I brought along a friend of mine and also a fellow colleague at The Charity CFO. It’s we are going to talk about why nonprofits are quitting, their accountants. Yes. This sounds weird. Stay with us and we’ll help you explain. And maybe we’ll talk about why the accountants are quitting the nonprofits too. I don’t know. But, um, let’s just go ahead and dive right into the conversation. So some of you all probably know, or maybe you don’t know that when I started career, I started working in public accounting. I used to audit nonprofit organizations. Um, I, all of you that deal with auditors that come in on an annual basis, that’s essentially what I did.
Tosha Anderson:
So, um, it was at that time that I realized how vulnerable nonprofits are when they don’t have good financial management. And I thought I am going to commit my career to fix the, this problem. So that’s when I took a position as a CFO of a nonprofit organization, did that for four years. My official title was actually director of business and finance, which if anybody’s listening, you know what that means? I did all of the things I did accounting. I did HR. I did it. I did risk management. I did, um, quality insurance. Um, also the program side, like just making sure that everything was billed correctly and dealing with all of these things and was such a huge job. Now, my view, I only had a background in accounting. I was not prepared or equipped or skilled in any of these other things. And I’m not the only one that finds themselves in that situation. In fact, I think, what do we have? Like five or six people that has a similar story we have and Triná, you are absolutely one of those too. Trina, tell us a little bit about your background because you and I share kind of a similar path in terms of our career and what ended up leading us here.
Triná Owens:
Absolutely. And thank you for having me Tasha. This is absolutely cool. Um, so my background again is accounting, uh, over 10 years of accounting experience, but my last position held was the director of finance and administration, which again, as you just explained is finance and other things, finance and everything that’s not program. And so, um, that was the last position that I’ve held, um, which included payroll, HR, maybe of course it liaison duties because it’s usually outsourced. Um, so kind of that everything else position. So, um, yeah, definitely the same experience there
Tosha Anderson:
And just to put it in perspective, uh, Triná and I both worked for social service agencies that I would say were less than $10 million. So, uh, in the grand scheme of things, I think that’s probably in the same ballpark as as many nonprofit organizations tend to be, um, certainly smaller and have these hybrid roles. So we’re gonna craft this conversation around that, but Triná I’m super excited. Um, Triná is actually an accounting manager for us and she now helps co lead this firm to help us work with many, many nonprofit organizations. So we have some interesting, um, perspectives because we used to work for nonprofits. Um, Triná’s actually worked for a couple nonprofits, uh, in the similar capacity that you just described, Triná. Uh, and now we work with many, many nonprofits, I think right now we work close to 150 nonprofits every single month.
Tosha Anderson:
So, um, we talk to a lot of an individuals we help problem solve. Um, and more importantly, we talk about that transition plan for a lot of nonprofits that are dealing with, uh, the loss of their accountants. So, um, is that not even more clear in the last two years, uh, the, the need for transition, the need for succession plan, I’ve been hearing the consultants and the funders succession plan succession plan all of the years that I’ve been in this space, but it’s really been true, I think in the last two years, Trinity, I’m sure you would agree with that.
Triná Owens:
Absolutely, absolutely. It’s um, definitely time to, that’s the thing about nonprofits that I I’ve learned either. They have people that are there forever or people that are in and out in and out. Yeah. And so succession planning is very important. Um,
Tosha Anderson:
Yeah, yeah, yeah, totally. And there’s this concept, uh, that I find fascinating and I follow for a lot of reasons, not just because I lead this organization, but this concept of the great resignation, uh, nonprofits are not immune to this. Right. I mean, we see our clients constantly struggling, um, to find clinicians, uh, you know, educators, administrators, all sorts of backgrounds. Um, and they came across this article and this is not gonna come just a rise to anybody listening, but it says a recent article suggests that nonprofit staff are quitting for a number of reasons, including there’s limited growth for opportunity. They’re underpaid. The department is underfunded, the workplace isn’t modern or flexible and, or the workplace is toxic. All of those triggered me, uh, yeah. Which one resonated the most with you and why?
Triná Owens:
Um, so the most, uh, would be growth opportunities. I’ve left at least two organizations because of I had, I, I couldn’t go up anymore. Again, going back to, um, nonprofits, they have people that are in and out rotating doors and then they have people that have been there forever. And, you know, they’ve been there 20 plus years. And so if you wanna move up again, I’ve been financed trying to move up than the accounting departments. There’s nowhere else for me to go. So that’s the one that, um, resonates the most. The second one of course is the underfunded. Yeah. Um, you know, accounting and finance are pretty important to me, but from a mission standpoint and a program standpoint, it may not be the most important department right. To the nonprofit. So, um, underfunding also, you know, kind of strikes a nerve for me. You know,
Tosha Anderson:
You said something, um, that I talk about a lot, there’s nowhere else to go really when you are in these chief roles. Um, and when I said earlier, nonprofits are quitting, their accountants, what I really mean is they’re quitting their chief financial role. Um, and here’s what I’ve learned that 80% of the accounting done within a year for a nonprofit organization is a transactional input output. Um, some bookkeeping, some pretty basic accounting. Right, right. So this is, you know, I don’t wanna say entry level, but in many ways kind of entry level entry to mid-level. And when you have the CFO role, that is an, a player that you bring in that really loves so much more than just doing the 80% of the work. That’s 80% of their work they’re doing is likely things that aren’t gonna feed their soul. So what I’ve learned today, and you can speak to this too.
Tosha Anderson:
There’s actually two, probably more, but two main types of accountants. There’s the input outputs, the detail orientated, get things done, very consistent, thrives, and routine. And, and, and that’s amazing because 80% of the work, yeah. Those people though are not like the other 20% of accountants, which is more like strategy, problem solving exactly. Coming up with new solutions. And when we talk with nonprofits, you know, it’s, you know, I either have the 80% covered, but my person is limited in their skillset for that 20%. Or I have that a 20% person that loves the problem solving, but they’re bored out of their minds…
Triná Owens:
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80% of the work. And then when they’re in a place like you were just describing with nowhere else to go, when you sit and you think, is this it for me, if I’m spending 80% of my days doing things that are feeding my soul and there’s nowhere else to go, that I can get more into that strategy level. And I think that that’s the challenge that nonprofits are facing because they need both of these skill sets, but the budget, um, or the size or whatever, do justify the need to have two different people. Right, right, right. Would you, would you say that was your case too? It certainly was mine.
Triná Owens:
Definitely. I think in one position, again, not trying to name any names, um, but in one position, um, I did find myself stuck doing that, uh, day to day, those day to day operations. When I knew that I prefer to do more analytical work. Um right. But there was no time for that because of course it still had to be done. Um, and so maybe they couldn’t afford another hum, another person in that position. So, um, you do tend to get stuck in certain areas. And so it makes it very difficult to, uh, to advance really, you know, and as a, as a, as a professional, it’s important that I grow. And so that kind of stunt your growth as well as a professional, you know, as a professional you’re thinking, okay, I gotta make sure I’m, I’m getting better. I gotta make sure I’m learning more and doing more. But, um, when you get in some of those positions that the opportunity is just not there. The time is not there to do everything that’s required.
Tosha Anderson:
Well, and if was listening to this, like, you know, or whoever’s listening to this, you know, is an, a player you’re an, a player you wanna grow, you wanna develop, you wanna do
Triná Owens:
Absolutely
Tosha Anderson:
Any organizations would be thrilled to have you on board. But the challenge to me also goes back to the underfunded part of things where, um, you’re put in a role. So not just underfunded, but you’re put in a role where 80% of the accounting you’re doing, doesn’t be your soul then. And, and that’s only like 25% of your job is all the accounting combined. The other 75% are all of these other duties. And when you have an, a player, a top performer, somebody excited and interested in accounting and moving the needle and making the accounting to finance better, but they don’t have the ability to function, to focus solely on just the accounting. What they find in this is what, uh, I would say underfunded with mine. Um, and what led me to leave the organization and leave nonprofit. And the way that I worked with them was that I also like UTURN a, I’m an, a player I’m a top performer. I want to be really good at what I do, what I found myself. I was mediocre and everything at best. Yep. And at the end of the day, when you day after day, year after year are, you are a high performer. You wanna grow, you wanna enhance your skills, you wanna be creative and analytical and solve these big problems and move the needle for this organization. And yet you feel like you’re just failing every day, not at failing, but failing to be great, failing to be great.
Triná Owens:
You’re, you’re just getting things done. You’re just getting things done. You’re just getting it done. You’re be, you’re producing, you know, you, um, but you wanna do something greater. Right. And you know, you have the potential to do something greater. Um, absolutely. So that’s the, yeah, that’s definitely the thing. That’s
Tosha Anderson:
To me, how, whatever we would wanna call that into, uh, or call, call the call. That specific thing. I think that that’s why at least the former finance directors like said we have five or six now on our team that left organizations for similar reasons. And those are usually a lot of the reasons. Um, and you know, that’s an unfortunate thing for the nonprofits, but I think, Hey, knowledge is power and we can at least learn from absolutely understand. Absolutely. So switching gears a little bit, there are gonna be people that are listening to this, like, wait a minute, I’m gonna counting for a nonprofit. I’m just trying to keep my head above water. Yeah. So switching gears a bit, we both mentioned, we came with an accounting background. We accepted jobs that were accounting and all other things administrative. So what was the hardest part of your multi hat job? And then looking back, what advice would you give to those that have had this position? So kind of speaking to those, you know, unicorns, the Swiss army knife, the, you know, how did you learn, what was the hardest part of your job? We’ll start with that.
Triná Owens:
Um, the hardest part and again, in multiple positions is being that other, uh, anything outside of accounting and finance I say was difficult. I’ve done some operations, I’ve looked, looked into, um, uh, having to hire someone to fix boilers, you know? Right. Um, it looked into, uh, it, uh, companies outsourcing it. I don’t know anything about it. You know, what makes a good outsourced company? I don’t know. Um, I, somehow I made it to HR and payroll. Um, again, people assume that’s finance and accounting. It is not, um, right,
Tosha Anderson:
Right.
Triná Owens:
First organization, the HR wasn’t so bad, but when I go to the next organization, they really need a HR manager. They really need a HR director and I’m, you know, part of that. So I’m that per so that’s a totally different ballgame. Um, so I would say, you know, all of those, but I guess HR would be the hardest one because I feel like that’s a really a specialized field just like accounting and finance. And yes, I understand it, but I’m not a HR. I wasn’t, I wouldn’t consider myself having a HR back ground. Um, it just kinda landed on me. And of course, like you say, how did I learn it, Mr. Google, Mr. Uh, A society of human resource management. I, you know, became a member on my own dime. Again, I wouldn’t dare, you know, ask my employer to do it, you know, on my own dime. I became a member of that and, you know, looked at their resources. So just a bunch of research on my own time, on my own dime to again, make sure that I am successful because again, I can’t fail who, you know, it doesn’t matter that I don’t know anything about HR. I have to my department and I have to run it well. And I did that. So that’s the hard part is, you know, picking up this extra, um, area and then, you know, having that ownership, I’m gonna have ownership of it and I’m, I’m gonna try my best to do my best with it. So, um, HR was definitely the hardest
Tosha Anderson:
Me too. Me too. Me too.
Triná Owens:
Hiring. Firing.
Tosha Anderson:
Yeah. And it, wasn’t just the understanding of, I, I think why accountants inherit, inherit the HR function. We have an ability to decipher details and like read super boring contracts, I guess. I don’t know, there’s this perception that we have a high attention to detail, which PS remember, everybody has said there’s 80% of accountants that are super detail focused. And there’s the other 20% of us that really like financial modeling and yeah. Geeking out on Excel spreadsheets. Uh, I’m definitely that one.
Triná Owens:
I love a spreadsheet.
Tosha Anderson:
I’d be bored in tears, dealing with enrollment forms all day long. I did a lot of that though. Um, but one of the things that I think was a biggest struggle for me, it’s not just the paper pushing that is associated with HR. What I found is I am a trained accountant and yet I am now an HR director, but I’m also working through and with programmatic team members to deal with program staff, cuz that’s most of employees, right. That aren’t even my direct reports, nobody in the organization has any understanding of the true, like, uh, appropriate process to handle performance appraisals. So performance improvement plans, you know, having those difficult conversations up to and including, uh, you know, termination and hiring. Yes. And so it was almost like, well, you’re in HR, so you have to have the difficult conversations with people or you have to fire the people and say, wait a minute, these are your staff and Triná now, you know, I mean, we run this business and we have many staff people, we, as the managers direct supervisors, we have those direct difficult conversations with our team members. Yes. So I would say it, wasn’t just getting up to speed with the, with the HR staff, but it was also working through the program team and getting everybody else’s understand, cause I’m not a train HR person either.
Triná Owens:
Exactly, exactly.
Tosha Anderson:
Getting them to understand what their role is when I really don’t know what I’m talking about either. So, um, but one thing I did learn, one thing I did learn and the advice that I would give to someone else in that position is you have to understand the really big, big red flags that can end the organization and really help water.
Triná Owens:
Yes,
Tosha Anderson:
Yes. Know what those compliance needs are. And Triná, we tell clients this all the time, everybody freaks out and thinks that they count team is what’s going to get them in big trouble. No, it’s the personnel issues. Um, whether it’s wrongful termination discrimination, failure to investigate back payroll tax issues, failure to file your, your returns
Triná Owens:
Document, document, document.
Tosha Anderson:
All of those things will be far more significant from a liability than, than what accounting could ever do. And so I tell people this all the time, don’t take the risk of combining your accounting and your HR functions. You’re two entirely, two different skill sets.
Triná Owens:
They are. They are.
Tosha Anderson:
Two different different bodies of regulatory information, two different sets of laws. Like it’s not even in the same space yet. So oftentimes it’s coupled. Um, Yeah. And that became, I would say I probably did 25% of my work in, or in accounting. Probably 50% of my work was HR.
Triná Owens:
Yep. Yep. Same. I was, I was 50, 50, well, not really 50 50, but yeah, a, a huge chunk, more HR than I was accounting at the time at, uh, when I left that position. Um, but you know, one thing, again, what I’m learning is, um, in every position I get added on a little bit, you know, you go in as one individual. Mm. And then by the time I leave, I’m three or four people and what I’m learning now, like it’s okay to say no, it’s okay to say, you know what? I can’t, I can’t do that. Or, um, not even because I can’t because I’ve succeeded. Right. I’ve figured it out. I’ve gotten it done. I’ve made sure employee files were in order. You know, I can, but I don’t feel comfortable taking on that additional responsibility. Maybe we need to figure out how to get someone and hired. Maybe we do need to outsource HR. Maybe we need, you need to outsource, you know, an additional accounting person. Right. Um, so yeah, I definitely I’m learning that. Like it, we, I have to say no, sometimes
Tosha Anderson:
Triná it’s funny. I think that the trauma that comes from this multi hat, um, I, I think speaks within our culture as a company, we are obsessive about streamlining and carving out very specific because I think we, so many of us were in roles where we had 10 different jobs and quite literal when I left my organization, um, there were at least two or three full-time hires that replace functions. So the HR, the, the actually accounting, we hired just a controller. That’s all she was doing, you know, was the accounting side. Um, but I think it’s so important and I’ve seen, and Trina you with me and seen how faster the, and, and further the business can move by streamlining these things. I, I know what many people probably thinking, oh, we use are for-profit that doesn’t make sense. And when you’re a startup business, whether you’re for-profit or non-profit, you have to be lean, you have to be resourceful.
Tosha Anderson:
I mean, the challenges are still very similar. Um, but this sooner that you pair those responsibilities down and to let people focus on the area they’re experienced in the area that feeds their soul and giving them the bandwidth and the capacity to not only do their day to day stuff, but Triná, like you were saying, like the opportunity to be creative and refine and improve what they’re already doing. I never had a moment to do that ever, uh, in you you’ve said the same thing. So yeah. So I’ve seen this trend, as I mentioned earlier of nonprofits that are quitting their accountant. So I talk with a lot of nonprofit organizations that are interested in working with us, or I’m asked to speak on different panels about, um, you know, accounting, financial management within nonprofits. So what I meant by, and I alluded to it a little bit earlier, they’re moving away from this full-time CFO role or the accountants that happens to do accounting and all other things.
Tosha Anderson:
You’re kind of moving away from that role and looking for a little bit more creative ways on, on, on handling the back office function right now. I think this is a couple different reasons. Number one, I saw a disproportionate shift in the amount of, um, uh, organizations that reached out to us that, Hey, I had a part-time CPA. This person’s no longer willing to do our work, cuz they have to scale back their work. Now the pandemic, certainly as we know, disproportionately affected women in the workforce and there were many of these women that did on nonprofit, accounting is a side gig that simply had to step away. So I saw several clients came to us for that reason. Um, then as we all know, there’s a huge talent shortage for any specialized skill accounting as no to that. So the cost of that talent has now gone up.
Tosha Anderson:
That’s now cost prohibitive to nonprofit organizations. Um, and then I think there’s also this area where people are realizing, Hey, there could be other ways we can do this to do this. Yes, yes. Trinity, what we’ve seen is a trend in organizations, instead of saying, we’re gonna hire an accountant and we’re gonna have the accountant do the accounting and all of the other things too, what we’ve seen is organizations looking for more of an operations role. So like a chief operating officer, an operations manager, um, someone that really, if you think of like, um, like a hub and spoke, like serves as the hub and then they deal with all of these spokes and get the spokes, the contract, what they need. So we’ve had clients that have now or outsourced their HR. They have now outsourced their accounting. Those really highly regulated, specialized technical skills they have contracted out. And then they have more of this operations person that’s serving as the liaison. And then they’re dealing with all the other issues that come up on site out related to facilities and those sort of things. So today, what are your thoughts on this initially? Um, I know we’ve had some clients that, that have gone this route and been successful,
Triná Owens:
Uh, abs- um, so, so far it’s been, it has been very different and I do enjoy it again, being on the other side, right. Because I’m, I’m on the other side now. And, and the path asked, I have had a negative experience with the outsource accounting and I was like, oh, you know, I don’t like it, but now that I’m on the other side so I can see, okay, how do I make this relationship successful? And so I do have a few clients that have that person that’s in the office, that operations person that’s doing the accounting and other things. And so, so one of the things that, uh, the charity CFO we pride ourselves in is becoming, is being this innovative assistant. You know what I mean? We come in with all these processes that make everything so much more efficient. Yeah. And when you talk to that person again, you’re liaison with the organization and say, you know what, we’re gonna come in here and we’re gonna help you with this.
Triná Owens:
And this is gonna make your job a million times easier, or we’re gonna handle take this off your plate. We’re gonna take this off your plate. And then you have time for that. You know, maybe you have time to do your fundraising. Maybe you have time to do more, uh, applying for more grants, you know? And so, so far I’ve seen it again, um, be very successful, very successful. And it’s, I think it’s the approach. It’s all about the approach and it’s all about again, um, letting them understand we’re there to help. We’re there to help where, you know, take those little things off their desk. And so far it’s been very, you know, um, the clients I’ve worked with have been very, very happy with this.
Tosha Anderson:
I think you bring up a good point. That reminds me of whenever I was, um, working for a nonprofit that time I ever even pondered the idea of changing something, for example, oh yeah. I wanna change payroll providers.
Tosha Anderson:
No way hard paths for me, because for me it was not just the time that I had to invest in changing the payroll provider and implementing the migrating and then yeah. And then it’s the, okay, we’re live. And then there’s gonna be the troubleshooting and the tweaking and fixing the stuff that will inevitably go wrong. Yeah. There was just no bandwidth to do that. And I think that some people think, oh, my gosh, outsourcing is creating so much work. Yeah. But where I think is outsourcing, um, which goes back to some of the things that we were talking about earlier, the very beginning of this conversation where nonprofits aren’t modern or flexible. Yes. What’s really interesting is we’ve seen organizations reach out to us, Hey, we need to be a paperless system. We wanna be a virtual team. We want something more modern. Our systems are old and outdated and, and antiquated.
Tosha Anderson:
So what contractors that we worked with, we use contractors internally ourselves too. Yes. That, and we have like a hub and spoke kind of model where we outsource different functions. And then we have people internally that deal with those contractors that you rely on the contractors to come in and say, we’ll do the updates for you. Yes. We will create the processes for you. We will even train your team members on exactly what they you need to do to get. So it removes that I don’t have time to do this implementation. I don’t have time to update things. I don’t, I don’t have the bandwidth to do that. You rely on these contractors to do that for you. And I think that that makes it a lot easier because I know that that’s one of the reasons why I just kept doing the same thing because I’ve always done it that way. I had no place to breathe when I was the CFO of a nonprofit that I wasn’t about to change anything. Cuz I can’t deal with anything breaking. No, you
Triná Owens:
Know? No. And especially once you get the people on board with a process, how hard it is to tell your organization, okay, we’re moving to this. I mean, that’s a part of it as well. And so again, we have to be very careful with how we come in in our delivery and you know, again, that’s why we’re, um, so big on assisting, like you said, we train, we will train if we need to, um, we will, you know, make this, we wanna make this process as easy as possible. And in the, in the end, I mean the organizations are usually more, a lot more efficient because we find out they’re doing things that they’ve just been doing for 20 years. Not necessarily because it’s the best way, but it’s just been done for 20 years. And so nobody thought to, um, improve it, the process at all.
Tosha Anderson:
Well, I’ll tell you, I don’t see this trend slowing down that nonprofits are quitting their accountants because of all the things that we talked about funding is always gonna be scarce and the talent is gonna continue to be expense of, um, we have an ongoing need to be modern and flexible. Yes. And technology is always changing. So, um, having a partner that you can work with, it constantly stays, uh, on the forefront of all of those emerging technologies and how things work and all those sorts of things. Um, and then just giving people space to grow and not have their departments underfunded because they’re trying to do too many things for too many people. I just don’t see this trend slowing down. No. Um, so it’s been, it’s been an interesting reflection when I saw this article and I knew you were the perfect person to talk to because I know we could share war stories back and forth.
Tosha Anderson:
Oh yes. All things were difficult for us. And I guess sadly kind of what led to us leaving, um, the industry in that way. But it’s been really cool to work with the organizations in a different way. And that’s where it’s um, I think both of us are relieved to say like, okay, we can, we can just do the accounting now. I think that’s what you said when you first came on board. You’re like, I’m just happy. I can just work on the accounting. Yes, yes. And not everything else. And so my hope is that this conversation just allows people to think about things a little bit differently and how can they be creative in solving their back office issues without facing so much of that burnout. So much of the underfunding, the so much of the we’re doing things, but I’m afraid. I don’t know what I don’t know.
Tosha Anderson:
And I’m gonna end up on the front page of the paper because I’m gonna do something wrong. That was a fear of mine. Um, yeah. Yeah. Then hire the people. There’s a lot of really great consultants out there. Not just certainly for accounting, but your HR, your it, and then consider what this hub and spoke model might look like for your organizations and how that might be helpful in succession planning and cross training. And we found it much easier to have those processes documenting and farming out these really key processes of the organization. Yes. So that when you do have turnover and you will, we all will that you’re not starting from scratch with all of these functions at
Triná Owens:
Every time. Yeah.
Tosha Anderson:
So important.
Triná Owens:
And I’ve seen that and you lose, you lose a lot when you do that. Um, that’s the other thing about having that person? That’s the Jack of all trades. Yeah. You don’t know what they did until it’s not done. And that is, you know, for a small nonprofit, a midsize nonprofit. Yeah. You know, that’s just, that’s, you know, the, I could be, have a very negative effect.
Tosha Anderson:
So Trina also part of her job, she takes on new clients and most of them are, um, transitioning away from full-time, uh, accounting hires. Um, and best scenario, we’re always transitioning from one firm to the next and that firm is still there and we can ping back and ask questions. But so often, you know, Triná, you’re dealing with situations where the finance director or whatever that role is or whatever that title is, has left. And I, I know that we go through our onboarding call and we start asking really detailed questions about four fundamental processes. Like how do we get paid from our funders? And it’s a little terrifying that they’re
Triná Owens:
They don’t know. They don’t know
Tosha Anderson:
We don’t know. Uh, we don’t know. And so diversifying those key processes, then I think the pandemic taught us that I don’t see that changing anywhere. And, and we practice what we’ve preach. We do the same thing here. I’m pretty much obsessed with it ever since I left, um, working for a nonprofit, uh, and it took a six month transition time, um, a couple hires wow. Months of training, uh, to make sure the organization can continue on without hiccups. So anyway, hopefully this was helpful for you all listening. Triná, thank you again. We’ll have you back. We’ll continue sharing some of our stories on if we know, if we knew then what we know now, how
Triná Owens:
Would we, that’s a good one. Yeah,
Tosha Anderson:
Yeah, yeah. Um, thank you again for joining me. And if you all are interested in hearing more about the work that we’re doing, go to thecharitycfo.com. We have a blog on there. We don’t just talk about accounting. In fact, I love talking about operations at the nonprofit in general. So we often have guests on there to speak about fundraising and grant writing and insurance and cyber security and all of the other areas, um, that you can possibly think of. So go check out our website until next time. Bye everybody.
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