Not-for-profit chief financial officers (CFOs) fill many roles, and may be involved in decisions ranging from accounting to real estate and administration. The smaller the organization, the more likely it is that your CFO covers a wide range of responsibilities. He or she could be providing oversight over finance teams while also creating a high level strategy for financial and investment decisions.
Finding the right CFO is one challenge, and much has been said about the potential advantages and disadvantages not-for-profit organizations may face in attracting the talent they need. It’s another challenge to retain a talented finance executive. The following may help your organization keep the talent it has secured.
1. Pay a Competitive Salary
Compensation is one of the top reasons that employees will look for a new job. A lower-than-market salary may lead your CFO to believe that your organization is taking him or her for granted, and that may make the CFO more open to opportunities elsewhere. A noncompetitive salary may even overcome other advantages of working for your organization, such as a good environment and belief in the not-for-profit’s mission.
An outside executive compensation consultant can help identify a competitive salary for an organization of your size and type. Conducting the outside research may also help your not-for-profit’s board understand why a salary adjustment would be needed.
2. Provide for the Short-Term and the Long-Term
Many organizations offer short-term performance bonuses as well as long-term incentive plans for their CFOs. Bonus plans can help supplement a base salary, which may sweeten the pot for your CFO if you are unable to pay a competitive wage for the position. Not-for-profit organizations must be extremely careful when it comes to bonus pay, however, to ensure incentives do not drift into the private benefit realm. For example, a not-for-profit cannot give bonuses based on the revenue that it generates in a given year. Instead, organizations may want to consider other types of bonuses, such as club membership fees or car allowances.
Another strategy to help with retention is to focus on the long-term benefits for executives. Section 457 deferred compensation plans can help top employees defer compensation until a later date, which may have tax benefits if at a later date the employee’s tax rate is lower.
3. Expand the Job
Not-for-profit CFOs may have to wear many different hats, and that could be one of the reasons that your finance executive chose to work for your organization. Make sure that your CFO is included in important decisions when it comes to core areas of your operations, including human resources, IT, risk management and other facilities. Including your CFO in conversations can help ensure that he or she is able to perform all aspects of the job and has a voice in the decision-making that could affect your bottom line.
4. Include the CFO in the Strategy
Your CFO should be part of the higher-level strategy as well. The objectives the management team sets will have financial implications, and your finance executive may be able to provide some insight into how the budget will affect the strategies being considered. When CFOs have a seat at the decision-making table, they are also more likely to be invested in your not-for-profit’s future, which can help with retention.
5. Bring in Back-Up
With so many responsibilities, a not-for-profit CFO can easily get overwhelmed. Keep a dialogue going with your CFO about tasks and deadlines to make sure management understands if additional staffing resources are needed. There may be times of the year when a not-for-profit organization needs interim support to meet filing deadlines or other financial reporting obligations. Changes in programs or new initiatives may also require additional resources. The executive team and the CFO may need to sit down and evaluate whether full-time support is needed or whether certain functions, such as bookkeeping and payroll, need to be outsourced entirely.
Adequately supporting your CFO can help prevent burnout and other on-the-job frustrations.
6. Offer Development Opportunities
Career growth is another major reason why an employee would leave. Not-for-profit organizations should ensure their CFO has access to personal and professional development opportunities, including continuing education. If your CFO is early in his or her career, you may also want to consider what mentorship opportunities may be available. Associations are a good resource to tap into, and you may want to encourage CFOs to find one that suits their interest and goals.
The executive team should periodically have a conversation about how else the organization can support the CFO with his or her career.
Make Retention a Priority
A few steps can go a long way in helping your CFO feel part of the team and the overall strategy. For more information about how to recruit and retain a CFO for your not-for-profit organization, please contact us.
Jay Meschke is the president of EFL Associates and CBIZ Talent and Compensation solutions. He can be reached at firstname.lastname@example.org.
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