The most basic job description of a CFO is to manage an organization’s finances. But the simplicity of this description belies the complexity of the role, especially when it comes to understanding day-to-day responsibilities or big-picture goals at a charitable foundation.
As a CFO at a foundation you oversee any combination of financial subcategories including accounting, budgeting, tax and audit, investment, grants management, information technology, and facilities. The depth of involvement within each category may vary and change over time. At some foundations, the CFO may spearhead policy changes to distribute funds faster to nonprofits, while at another, there may be a greater focus on improving efficiency and budgeting within various departments.
Whatever your specific duties, the question remains: How can I become an even more effective financial leader at my foundation?
Reading about best practices is good, but understanding how to implement them in concrete ways is better. Here are five tactics that you can focus on to drive your foundation toward a healthy, impactful financial strategy:
Understanding how technology affects real-life processes is key. The best CFOs get out of their offices and see what their data looks like in action as it happens. This helps them see what’s working and what isn’t, and it helps them connect the dots between data, processes, the staff experience, and the experiences of the people the foundation serves.
When choosing the right technology for your foundation, work backward from the mission, and look for tech that will help you get there. Examine your current technology, and make sure you fully understand what you own already, why it was implemented, and where its holes are.
When you decide to make a change, get key people on board first to help win over the rest of the organization. Get buy-in from other executives — especially the IT team. Plan out the metrics you will track to make sure the new tech makes the improvements you’re hoping for. This can include measuring collaboration, satisfaction, awareness of data, or how fast grants are reviewed.
Be sure to explore your options for grants management software. Overseeing the grants management process is a key part of being CFO at a foundation, and this type of software is excellent for tracking specifics such as payment processes. For example, payment schedules can be automatically set to a number of options, and many of these systems integrate with other accounting software such as NetSuite and Intacct.
When a financial leader understands operations in each function of the organization, he is better able to determine the best strategy for that specific foundation. Once again, it is important to move beyond spreadsheets and make sure you understand each department and each department understands what drives performance. You should be particularly familiar with the grants team, as this team follows and tracks grants as they are paid out.
What sets great CFOs apart is their ability to listen to problems and use their knowledge to provide insights and solutions without disrupting the organization. Gaining an extensive level of awareness requires being a leader who leads by example, embraces opportunities for mentorship, and inspires finance organization across many different departments by helping others connect potentially boring tasks like budgeting to greater reach on the ground.
The nature of the position means that CFOs are often the ones saying “no” — they simply know the foundation’s budget best and what areas take priority for spending. Still, the best finance leaders are able to cut costs in an approach that’s disciplined yet not discouraging.
A great way to do this is to ask good questions when people request financial resources. Have them explain the risks involved in what they’re asking for and what is essential to the success of their endeavor. If your answer is still “no” at the end of the conversation, they will better understand why. And if your answer is “yes,” they will walk away with a clearer picture of what they are taking on. This leaves plenty of space for innovation rather than stifling the desire for creative solutions and projects.
In a 2015 survey by KPMG, 97 percent of the global CEOs surveyed said attracting and retaining finance talent is critical, but only 33 percent were satisfied with their CFO in this area.3 Generally speaking, the amount of time you devote to coaching, on-the-job training, and assignment rotations should be significant.
When your role as CFO requires taking on more responsibilities, the people immediately under you will also be affected by the load. They need to be talented, knowledgeable people you can trust to do the job right. It’s up to you to build that team and raise them up to the highest level they are capable of achieving. People want to work for someone who, when they meet for one-on-ones or performance reviews, makes them feel less like they got sent to the principal’s office and more like they’re checking in with their baseball coach who has been helping them perfect their swing.
Big data can be overwhelming, but it provides critical information in real time. If you can simplify and interpret the data, you can gain insights that will drive strategy in the most effective direction.
Start by simply embracing the potential that hides in data. If you can unlock the information, analytics can deliver keys for learning and growth. When the CFO approaches data with this attitude, it inspires others to do so as well — even those who are not formally trained in analyzing data. When more people are excited about data and able to utilize it, there are more opportunities for group learning.
A data-first culture is born out of a common understanding that data and proper data assessment can unlock vast potential for the organization. When you achieve this culture, everyone knows that his or her voice is both knowledgeable and valued.
In many ways, the role of CFO looks different at every foundation, just as foundations look different from one another and from for-profit businesses. But there are many best practices that apply across the board and many more that apply to a large percentage of settings. Consider these guidelines through the lens of your foundation and use your financial expertise to inspire change and increase the reach of your mission.
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