I’m sure you’ve heard about the “Great Resignation” that’s been taking place over the last year or so. Not surprisingly, this above-average employee turnover impacted nearly every industry, but it has hit nonprofits and financial professionals particularly hard.
However, nonprofit accountant turnover is not a new problem in the sector. It’s an ongoing issue that’s merely exacerbated by the Great Resignation. Unfortunately, the issue seems to be getting worse rather than better, and it’s one of the biggest problems that many of our nonprofit clients face today.
In this article, we’ll talk about “accountants” because the financial roles in nonprofit organizations are notoriously vague. But we’re actually talking about high-level accountants, directors of finance, CFOs, and a variety of financial leadership roles in the nonprofit world.
Why Do Nonprofit Accountants Quit?
It’s hard to identify just one factor causing the high turnover rate of nonprofit accountants, treasurers, and chief financial officers. However, in a recent podcast with us, Trina Owens talked about the reasons that so many nonprofit accountants quit their jobs, such as:
- Limited growth opportunities
- Low salaries
- Underfunded financial departments
- Inflexible or antiquated accounting systems
- Toxic or unhealthy work environments
Of these issues, the issue of underfunded departments is probably the one that accounts for the most turnover. And it’s often the driving factor behind the other factors, like low salaries and unhealthy work environments.
To cut corners, nonprofits often force nonprofit accountants to handle various responsibilities, including HR, payroll, and bookkeeping. Some CFOs and nonprofit treasurers even find themselves in charge of handling administrative tasks and operational issues, which really shouldn’t be in their area of responsibility.
In underfunded organizations, it’s not unusual to task your nonprofit treasurer or CFO with everything that falls outside of fundraising or programs. When this happens, your accountant gets spread too thin, frustrated that they’re not able to do anything well, and overwhelmed and unfulfilled in their role.
Overworked, Unchallenged, and Burned Out
The best accountants, treasurers, and CFOs want to be in a role where they are growing, succeeding, and doing work they enjoy. But nonprofit budget constraints often force organizations to task the CFO with handling multiple roles, including specialized skills beyond their training.
For example, in many organizations, a financial director or CFO is forced to take on Human Resources, which creates some unique challenges.
First, it’s not their area of expertise or what they do best. So your critical financial professional must put in a lot of work to learn the job and spend much of their time on projects they don’t enjoy. Beyond that, it can expose the organization to legal problems and lawsuits, as HR is a specialized field with unique requirements and demands.
When you give your financial professional too many responsibilities, they spend most of their time working long hours on projects that don’t maximize their skillset. It’s not what you paid them for. Eventually, they get burned out, frustrated with their lack of development, and they quit.
The Unseen Cost of Nonprofit Accountant Turnover
To make things worse, if that person was handling all the bookkeeping, accounting, tax filings, payroll, and HR, they throw your entire operation into disarray when they leave.
To make things worse, hiring a new financial director is a time-consuming task. It’s hard to find good people with nonprofit experience, and the price is often higher than nonprofits can pay.
So you end up hiring someone who is underqualified or doesn’t have nonprofit experience. The new hire struggles to decipher the old accountant’s systems, and you overload them with responsibilities. Within a few years, you’re accepting their resignation and hunting for a reliable financial professional once again.
This endless carousel of recruiting, hiring, training, and then recruiting again drains resources from your organization. That’s why many nonprofits have started seeking alternative solutions to tackle their accounting needs.
Fixing the “Do-It-All Nonprofit CFO” Model
You can see that the Do-It-All CFO model is clearly broken and a core factor in the crisis of nonprofit accountant turnover. The challenge, of course, becomes how your nonprofit can allocate all of the work that previously was handled by a CFO, director of finance, or senior accountant.
There are three primary ways that you can do this:
- Create multiple roles. This would mean, for example, having an accountant, a bookkeeper, and an HR professional. This lets each employee focus on what they do best. However, due to limited budgets, these often are part-time roles and can be challenging to fill. And without a true CFO, your organization may lack the high-level financial expertise you need.
- Hire support teams for your CFO. Another solution is adding more accounting and bookkeeping support to help your CFO with less advanced tasks. This can help ensure your CFO can focus on the most important things and isn’t overwhelmed by too many basic duties and responsibilities, but it gets expensive quickly.
- Outsource to a qualified financial partner. When you outsource bookkeeping and accounting to a professional nonprofit accounting team, you ensure your finance needs are met by a dedicated service team of highly skilled accountants, bookkeepers, and nonprofit financial experts. And you pay a fixed monthly fee that fits within your budget.
Want to eliminate accountant turnover once and for all?
According to a report by the Society for Human Resource Management (SHRM), it costs an average of $4,129 and takes 42 days to fill an open position. Plus, turnover in your financial department can result in frustrated vendors, blown budgets, lost grant funding, and even worse.
So you can’t afford to get caught on the accountant hiring carousel.
At the Charity CFO, we understand your need for an effective and sustainable solution that you can count on. That’s why we’ve assembled the industry’s best team of nonprofit financial professionals to help nonprofits just like yours.
Our team will help you update outdated accounting systems, optimize your processes, and get the timely financial statements and tax filing you require. Because our team works only with nonprofit clients, we understand the challenges you face every day. And we know the intricacies of nonprofit accounting—things like accounting for in-kind gifts, fund accounting, and donor-restricted assets—better than anyone.
Our unique outsourced model gives you both a dedicated service team and access to CFO-level guidance when you need it. It’s a modern and flexible accounting solution that ensures you’ll never have to deal with the nightmare of accountant turnover again.
After years of dealing with accountants quitting, today’s modern nonprofits have started to quit their accountants. When they do, we’re there as a qualified financial partner to fill that gap. Contact us today to learn more or to start working with our team.