As controller and corporate compliance officer at the Akron, Ohio-based nonprofit Weaver Industries, Carla McDonald’s responsibilities include: all things financial (accounting, accounts receivable and payable, financial statement preparation, and financial presentations to the board of directors); overseeing a team of two (soon to be three) people; and maintaining regulatory compliance requirements for the organization.
But that’s not all.
“I have to wear many different hats to keep the organization fiscally responsible and within compliance,” she said. “My job varies day to day, from managing cash flow to setting up new technology for our direct care staff out in the field to have what they need to do their job daily. We don’t have the resources to add full-time positions for every need, so many aspects of my job extend beyond finance and into IT, payroll, operations, insurance, and development.”
During conversations I recently had with several nonprofit controllers about what they do, how they got there, and why they do it, I heard similar stories as McDonald’s. Especially at smaller nonprofits, controllers often are asked to do many things that fall outside of their job description.
“Controllers at nonprofits are asked to add their expertise to various situations,” said Shannon Emley, CPA, controller at Second Harvest Food Bank of Middle Tennessee. “So, someone considering such a position should be willing to take on a wide variety of tasks and shouldn’t count on a specific set of repetitive duties.”
But spending time working outside of the traditional accounting role isn’t a bad thing, said Denise Garcia, controller at the Houston Parks Board.
“Be prepared to roll up your sleeves and expand your experience in ways you may not have considered, and view these times as opportunities for personal and career growth,” she said.
Flex your accounting muscle
First, controllers must put on their accountant’s hat, as nonprofits need professionals who understand all aspects of nonprofit accounting, financial reporting, taxes, and compliance.
“Many of the qualities expected of a public or private company controller—oversight of the general ledger, knowledge of GAAP, strong accounting and communication skills, and experience managing A/R and A/P—will be applicable to the nonprofit controller, too,” Emley said. “Staying updated on principles pertaining to these areas is important.”
And while there are some significant differences, nonprofit accounting rules under GAAP aren’t too dissimilar than for-profit accounting rules, he said.
“Much of the work at the controller level is spent on team management and making sure your processes are up-to-date and efficient. The differences [in accounting] can be learned,” Emley added.
Garcia said a clean audit is of the utmost importance to nonprofits because audited financial statements are distributed to funders and other stakeholders who help sustain a nonprofit and its mission.
“Grants and contributions are almost always contingent on a clean audit, and internal controls are key to this outcome,” she added.
And because stakeholders and other members of the management team might not be familiar with financial terms, controllers should learn how to talk about GAAP and financial statements in clear, understandable language, said Ashley Bassim, controller at the Denver Museum of Nature & Science.
“You don’t want your message to be lost or, even worse, intimidating,” she said.
If the decision-maker hat fits, wear it
Another hat nonprofit controllers often must wear is that of the decision-maker.
“I think all nonprofit organizations need controllers who want to be a key member of the decision-making team,” Bassim said. “Especially in a small-to-midsize nonprofit, if you’re content spitting out the same financial reports month after month that just tell the history of the numbers without affecting real-time change, you’re not adding enough value. Controllers have a big-picture perspective—we see everything—that a lot of other managers just don’t get.”
She added that aspiring accounting and finance professionals might not consider controller roles at nonprofits because they don’t realize how entrepreneurial the industry really is.
“It’s a very exciting time in the industry, and there’s a lot of opportunity for accountants to become key players in the leadership of these organizations,” Bassim said.
Nonprofit organizations are also looking for controllers who are willing to be team players and work with every other department in the organization.
“This means communicating and working with people in very different fields who won’t consider the bottom line as one of their top priorities,” Emley said.
Carolann Parker, CPA, financial controller at The Morton Arboretum in Lisle, Ill., recommends reaching out to other departments “to see if there are any financial deliverables that can be improved upon and develop a plan to address needs.”
Emley has found it important to pitch in or help another manager on a project that doesn’t fall under his purview.
“This builds knowledge and lets your team members know you’re willing to take on more responsibility,” he said. “This may seem obvious to some people, but I don’t think this sense is innate to everyone. Use it as an advantage.”
Do you have the chops to be a nonprofit controller?
“Anyone who has an interest in managing a team devoted to the accurate reporting of finances and is willing to look at the accounting from a different perspective to incorporate the unique nonprofit accounting rules would have the potential for a nonprofit controller,” Parker said.
Here’s some other advice from the nonprofit controllers I spoke to for those considering a move to that role:
1. Believe in the nonprofit’s mission and objectives. Look for an organization with a mission and vision that inspires you, said Raquel Cosio, CPA, controller at the Chicago Zoological Society.
“Working for a nonprofit organization is more than the accounting work we perform. It’s knowing that we’re contributing to something bigger,” she said.
If you’re unclear of the nonprofit’s mission, take time to research the work it does, and consider volunteering there, Emley added.
“Once you’re in the position, continue to take opportunities to step outside of your required duties and experience the hands-on work that directly fulfills the mission,” he said. “Not every day at a nonprofit is perfect, but even on a tough day, you know what you’re doing is helping make a difference in the world.”
If you invest your time and energy into what the nonprofit does, the benefits far extend beyond salary and title, McDonald said.
“That being said, working for a nonprofit will probably take a larger emotional toll on you than you’d expect,” she added. “Practice self-care, take PTO, avoid burnout, and realize that you can’t change the world all at once.”
2. Consider the entire package, not just salary. Speaking of salary, most of the controllers I spoke to said the No. 1 reason why accounting and finance professionals might not pursue the controllership at a nonprofit is because the job pays less than at a public or private company.
According to Payscale.com, an accounting director at a nonprofit organization earns an average salary of $77,909 per year, whereas the salary for a corporate controller averages around $93,000 annually.
“As a CPA, you possess a set of unique skills and qualifications that organizations are willing to pay a market rate for. You won’t be rolling in dough, but you also won’t be working public accounting hours,” said Bridget Meacham Kowalski, CPA, CFE, controller at the Pittsburgh Symphony Orchestra.
If compensation is a sticking point, make sure to always evaluate the total package, said Brian Neville, CPA, controller, director of accounting at Seattle-based PATH.
“Nonprofits have no equity or ‘profit share,’ but larger organizations often make up for this with additional retirement funding versus what’s common in the private sector,” he said. “If you’re willing to take a ‘discount’ for your services because you love a nonprofit’s mission, it’s prudent to quantify that discount in your own mind. Many I know are willing to work for perhaps 10% less than what they could earn if they looked to maximize their compensation relative to their skills. Too steep of a discount can result in a premature departure, and good nonprofits will pay for appropriate and commensurate value.”
Paul Harrison, CPA, controller at the Dallas Arboretum and Botanical Garden, said you shouldn’t pass up a controller opportunity at a nonprofit just because you wanted to buy a Ferrari instead of a Toyota.
“Live within your means,” he said. “Working at a nonprofit that provides a wonderful service to the community has so many tangible rewards that you don’t want to have to give that up just to earn more money.”
3. Match your experience with the job. Make sure the responsibilities required for the controller position are a good fit with the experience you have and that the work is challenging to keep you interested in the long term, Garcia said.
“For example, working for a museum might require accounting for earned revenue, such as gift shop retail and event revenue, and inventory of collections, as well as accounting for contributed revenue, fixed assets, and capital expenditures,” she said. “Working for a foundation might require strong investment experience and grant management.”
4. Before accepting the job, research your boss. Neville said it’s important to know a little about the person who you’ll be working for before you take the job.
“Having a strong boss is as important at a nonprofit as it is at any other type of organization,” he said. “You may love the mission, but working for the wrong person can undo all the good in being excited about the nonprofit you work for.”
5. Look beyond the 990. As any CPA with nonprofit experience will tell you, IRS Form 990, Return of Organization Exempt From Income Tax, isn’t exactly a clear representation of the financial health of a nonprofit organization, Kowalski said.
“Ask to see internal operating statements, ask questions about accumulated operating deficits, understand the debt structure, and understand the cash needs and uses,” she recommended. “Ask about funding sources—endowment, government, donors, and service fees—and whether other tax filings are required.”
6. Get to know the board of directors. “I have the opportunity to work with some incredibly brilliant business executives from all different industries,” Kowalski said. “They provide guidance, feedback, and support. I would’ve never met most of these individuals through networking alone.”
7. Be ready to learn the ins and outs of operations. Absorb everything operations-related, even if you can’t see early on how it fits into your job scope, Bassim said.
“Sooner or later, everything ends up in the world of finance,” she added. “The more clearly you can see the organization from a bird’s-eye view, the easier you can see solutions that other positions within the organization don’t have insight to. Make that your strength.”
Also, be patient. The nonprofit might not have the latest software and technology available, but make sure it’s using the resources that have been provided, McDonald added.
“Don’t be afraid to challenge the status quo and propose new ideas for technology, resources, and processes,” she said.