Most nonprofits begin with a deep commitment to serving a mission—not a love of financial management. Yet as an organization grows, financial oversight becomes increasingly complex and critical. This often leads to an important question: Is it time to hire a chief financial officer (CFO)? The answer depends on your organization’s size, structure, and strategic direction.

What does a CFO do?

A CFO is a senior leader responsible for overseeing an organization’s accounting and financial operations. This individual works closely with the executive director, treasurer, and audit/finance committee while serving as a business partner to program heads. The CFO develops budgets, analyzes investments and capital structure, and helps craft long-term financial strategies. Typically, the CFO reports to the executive director and board of directors.

The scope of the role varies widely. In smaller nonprofits, CFOs often wear many hats, overseeing accounting as well as areas such as human resources, IT, facilities, administration, and even legal affairs. Midsize organizations may also expect a broad range of responsibilities, particularly if funding streams and programming are relatively straightforward.

In larger nonprofits (and midsize organizations with diverse revenue-generating programs or government funding), the CFO’s responsibilities are typically more focused. These CFOs concentrate primarily on accounting and finance functions, including risk management, investments, and financial reporting.

When size and complexity matter

For small nonprofits with simple operations, financial duties are often handled by the executive director or outsourced to external professionals. However, as an organization grows and its funding sources and compliance obligations become more complex, a dedicated CFO may become essential.

When evaluating whether to add a CFO, consider four key factors:

1. The size of your organization,
2. The complexity and types of revenue sources,
3. The number of programs requiring funding, and
4. Your strategic growth plans.

Organizations with stable, unchanging operations may have less need for a CFO. By contrast, nonprofits pursuing expansion, managing investments, financing major capital expenditures, or relying on diverse funding sources often benefit from experienced financial leadership.

How to find the right candidate

Hiring a CFO requires careful consideration. At a minimum, candidates should have extensive knowledge of nonprofit accounting and reporting rules. Professionals with only for-profit experience may struggle with nonprofit-specific requirements, such as grant management and single-audit compliance.

The ideal candidate should be a licensed certified public accountant (CPA) and have an MBA or equivalent experience. In addition, the position requires strong communication skills, strategic thinking, and the creativity to deal with resource restraints. Experience across multiple operational areas (such as HR and IT) is also valuable, helping the CFO recognize when outside expertise is needed.

Finally, your desired CFO should display a genuine passion for—and commitment to—your organization’s mission. This top-down dedication motivates employees at all levels and helps ensure that financial decisions align with organizational values.

If your nonprofit needs advanced financial oversight but lacks the size or complexity to justify a full-time CFO, outsourcing may be an effective alternative. Contracting with an accounting firm or specialized provider can deliver cost-efficient access to high-level guidance. This approach can be particularly beneficial when internal staff lack the depth of experience required for sophisticated financial planning and compliance.

Making the right financial leadership choice

It’s common for founders and executive directors to want to manage every part of their nonprofit organizations, including finance and accounting. However, as financial demands grow, bringing in a CFO—whether full-time or outsourced—can strengthen oversight, support strategic planning, and protect your mission for the long term.

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