November 21, 2017
 
CFOs Can Make Numbers Come Alive for Management, Staff

By Melinda Tuan

Melinda Tuan
One of the challenges facing nonprofit chief financial officers is to engage frontline staff and management in financial discussions, and help them embrace numbers as a critical step on the path to achieving the mission of the organization.

Based on a longer article, “How to Talk About Finances so Non-Financial Folks Will Listen,” available in the January issue of the Bridgestar newsletter, “Leadership Matters,” this article addresses the reasons it is difficult to get non-financial staff to pay attention to the numbers:
  • Individuals may be intimidated by financial data. According to Jeanne Bell, CEO of CompassPoint Nonprofit Services, “Finance, similar to technology, is an area where people may be afraid but also feel entitled to exempt themselves from being on the learning path about it.”

  • Some organizational cultures do not embrace financial information. Interest in financial information should come from the top, beginning with the executive director (ED) and senior management in order to get buy-in from the rest of the staff. As Lawson Shadburn, chief financial and administrative officer (CFAO) for Turnaround for Children, commented “It needs to be part of management’s vision about the kind of climate that they want to create; otherwise no one is going to look at the numbers.”

  • Staff may lack financial literacy. In many nonprofits, CFOs are the only staff members with any formal training in finance or accounting. Financial literacy among other management and staff members is often very low.

Best Practices

Following are best practice solutions from CFOs on how to encourage staff to understand and care about the bottom line.
  • Understand what motivates each staff member. CFOs need to be able to address why the numbers matter to each individual within their organizations. They need to understand what staff members are responsible for, what they care about and how knowing about finances will help them in their jobs. “It’s much more than presenting balance sheets or profit/loss statements,” said Jan Dahms, CFO of International Planned Parenthood of the Western Hemisphere. “Instead, it is trying to understand how each team measures success in terms of what outcomes they’re trying to achieve. If I know that abc or xyz is important to a certain team, I go to the drawing board and figure out how to best present data that they’re going to embrace.”

  • Offer financial workshops and other training programs. Many non-financial staff members do not have time to attend courses on finance. Some CFOs have created alternative and creative solutions. David Stolow, former CFO of several organizations, designed and offered a staff workshop called, “Finance for Poets,” which taught the topic using role-play and other lighthearted approaches. Martha Ferry, CFO for the Association of Junior Leagues International, said, “...all staff should know what certain numbers mean to their programs and to their organization.” Figuring out what those certain important numbers are for individuals within an organization is critical to success.

  • Incorporate user-friendly approaches. Use less jargon. Build trust by asking a lot of questions; be helpful and show that you have good advice to offer. Use images and words instead of numbers wherever possible. Harry Bonsu, CFAO of Safe Space, said, “When I gave [our team] words and put meaning to the numbers, then I had fewer questions.” Be careful to use consistent metrics so you don’t confuse the staff. Andy Kaplan, CFO for DonorsChoose.org, is developing metrics dashboards for staff that will appear when they start their computers. “There will be common measurements for everyone and specific measures for specific jobs, to help them do their jobs and get them excited about seeing the results of their efforts,” said Kaplan.

  • Engage staff in the budgeting process. Bell noted, “I think it’s 100-percent true—I don’t think it’s possible for a CFO to not engage others in the budgeting process and then expect them to meaningfully monitor it over time.” In addition to engaging staff in the budgeting process for their departments, several CFOs said that it is also important to provide information on the entire organization’s financial situation.
Getting staff members who are busy fulfilling other aspects of the mission to pay attention to financials is challenging. Even with all these great tips and suggestions, the truth is, as summarized by Caroline Horton, CFO of Aeon (formerly Central Housing Community Trust): “It’s going to be harder or easier depending on whether the people in the organization will listen to you, but it’s our job to give them a reason to listen to us by showing what the value is of the information. We need to keep promoting this from within, knowing it will add such tremendous value to our nonprofits. There’s so much opportunity, we need to keep at it.”

Melinda Tuan is a special advisor to Bridgestar, an initiative of the Bridgespan Group dedicated to attracting, connecting, and supporting leadership for the nonprofit sector.

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