Practically all nonprofit organizations will be familiar with the challenge of recruiting qualified professionals to important leadership roles. It’s almost always the case that skilled employees stand to attract far higher salaries working for a for-profit company, leaving nonprofits reliant on the emotional draw of their organization’s charitable work to attract mission-driven leaders.
Attracting proven financial leaders, including Chief Financial Officers and Controllers, is even more challenging. The accounting profession is currently experiencing a painful shortage of qualified talent. In the past two years, over 300,000 accountants and auditors have left the profession. Each year, fewer college graduates enter the accounting profession. That means accounting talent is more in demand than ever, and as a direct consequence, more expensive than at any time in the past.
Needless to say, this leaves arts and culture organizations in a tough position. When important financial leaders depart, nonprofits must have a concrete plan in place to fill the void and minimize the operational disruption their organization will face.
In this overview, we explore the key elements of that plan, from defining roles and responsibilities for important positions to sharing the most effective channels for nonprofits to source new talent.
There comes a time when every employee will leave your nonprofit. Whether it’s through retirement or a move to another organization, every employee will move on one day. Proactively preparing for these transitions is a vital step for all organizations – whether they’re for-profit or not-for-profit.
Effective preparation not only allows your organization to recruit a replacement more efficiently, but it also ensures that your finance team can continue to operate effectively in the period between the former employee leaving and their replacement joining the team. There are several elements to this preparation, including:
By building this knowledge, organizations can build clarity about the expectations they have for their financial leaders. This not only makes for smoother day-to-day operations but can be crucial when it comes to assessing the suitability of candidates.
When a talented professional leaves, it’s not always possible to replace them seamlessly. As discussed earlier, many arts and culture organizations face significant challenges in recruiting proven financial leaders, and it could well take weeks or months to find the right person.
During that time, your finance department has to continue running. In this period, working with temporary staffing solutions can provide an invaluable bridge that ensures finance functions continue to function as board members focus on hiring new leadership.
It’s important for nonprofits to determine the level of expertise they require from these solutions. Some organizations may just need someone capable of handling routine monthly bookkeeping tasks; while others might need more advanced support preparing board presentations or analyzing financial statements like a Director of Finance or CFO.
By providing financial guidance, strategy, and support, an outsourced CFO can help smaller nonprofits make informed decisions regarding their finances. With years of experience and a thorough understanding of financial management and accounting principles, an outsourced CFO can help nonprofits create budgets and forecasts, manage cash flow and investments, and improve their overall financial performance without the larger cash outlay of hiring a full time controller or CFO.
Identifying and onboarding the right temporary staffing solution brings about its own challenges. Teaching temporary staff how your organization operates can be tricky. It’s often helpful to provide concrete examples and documents that outline the exact workflows and procedures your organization follows. Seeking guidance from a partner that understands your business, such as your accounting firm, can streamline this process.
Identifying the perfect match for a vacant leadership position requires nonprofits to cast as wide a net as possible during their search. Consider leaders from both the nonprofit sector and the for-profit sector. While many elements of nonprofit accounting are markedly different from for-profit accounting, many talented professionals have the appetite and curiosity to learn new processes.
Nonprofit organizations shouldn’t be afraid to think outside of the box. These days, many professionals are recruited through digital channels such as LinkedIn. Embracing these new channels, currently untapped by many nonprofit organizations, enables leaders to target potential candidates who fit their exact profile.
Networking also plays an important role. At Smith + Howard, we work with a wide variety of nonprofit organizations in the arts and cultural space. Our team are active members in the nonprofit community and can facilitate introductions between organizations and talented professionals open to new opportunities.
The departure of a key employee is always a challenge, but with the right approach, it doesn’t have to be an insurmountable one. By proactively preparing for the transition period when an employee leaves, arts and culture organizations can put themselves in a strong position to continue operating at a high level while recruiting talented new leaders.
At Smith + Howard, we’re happy to assist clients when they find themselves working to replace key personnel. We’re active members of the arts and culture community and have a well-developed network of proven nonprofit finance professionals. Many of our practitioners sit on the nonprofit boards and bring firsthand experience navigating these issues.
In addition to this, Smith + Howard’s advisory practice provides a range of outsourced accounting solutions from fractional CFO services to managing payroll. Our professionals retain connections with outsourced staffing agencies that specialize in supporting nonprofit organizations and are happy to refer clients to appropriate solutions.
To learn more about how Smith + Howard can support your arts and culture nonprofit, contact an advisor now.
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