This summer, we surveyed more than 400 nonprofit finance and accounting professionals to ask them about the challenges they’re experiencing and the trends they’re seeing with compliance, process, and personnel. We recently released the results in our 2016 Nonprofit Finance Study, which has generated a lot of buzz in the short time since its launch.
This was my first visit to Maine, and everything I’d heard about its welcoming hospitality and beautiful scenery was spot-on. The conference was held just down the road from L.L. Bean’s flagship store, which I discovered is open 24/7/365!
I mention this, because at times it feels like nonprofit finance professionals worry 24/7/365 about the financial health and operations of their entire organization. And, while it was refreshing to hear Soft Trac Conference attendees are actually sleeping soundly at night, most echoed the concerns we heard from survey respondents. In particular, there were two survey topics that resonated most with this group: compliance challenges and personnel issues.
Compliance is a huge and growing concern for nonprofit finance professionals – many of whom are spending more than 10 hours a month focused on it. Not a single respondent told us they feel their time or the cost of compliance to their organization has decreased over the last three years! This is being driven by sweeping changes like the Fair Labor Standards Act (FLSA) new overtime rule impacting salaried employees, and the recently announced changes to Financial Accounting Standards Board (FASB) rules on financial reports for nonprofits.
New overtime rules, specifically, are creating a lot of uncertainty as nonprofits are budgeting for 2017. Several audience members at the Soft Trac conference said it could have a significant impact on their programs or services staff, while others admitted to still looking into their situation. Fortunately, in our study we heard that more than 40 percent of finance professionals turn to auditors or partners like SoftTrac to help them understand these big regulatory or compliance challenges.
People and training are other areas of concern. Our group gathered in Maine was very seasoned, with most having 10+ years of experience in nonprofit finance and accounting. So, it was interesting to the group that 13 percent of our study respondents were not hired originally for their finance roles, but instead were shifted to those roles at some point in the nonprofit career. More concerning, 57 percent of those who shifted roles were never given formal finance training. Clearly, there are opportunities to improve access and depth of training for new and even existing team members, year round.
Find out more about the challenges and trends facing nonprofit finance professionals by downloading our study.