As charity budgets come under increased scrutiny from donors, nonprofit charity organizations are increasingly hiring finance chiefs from the corporate world, according to The Wall Street Journal.
Although there are no industrywide figures on the number of corporate CFOs making the jump to the nonprofit sector, executive recruiters told WSJ that it is a shift more finance chiefs are making.
Odgers Berndtson and Egon Zehnder, two executive recruiters from Stanton Chase, Heidrick & Struggles International, attributed the shift to scrutiny from donors as more money flows into charities and other nonprofits. As a result, financial management skills are in high-demand for nonprofit charities, according to the report.
Although more CFOs are making the transition, the WSJ reported that going to work as a finance chief in the nonprofit sector presents a new set of challenges, including the need to learn new ways of defining success outside of the balance sheet.
For Paul Henrys this reality hit when he made the transition from CFO of for-profit U.S. Foods Holding to CFO of the second-largest charity in the U.S., Feeding America.
He told the WSJ that as CFO of U.S. Foods, he spent a large amount of time focused on earnings before interest, taxes, depreciation and amortization, the company's debt ratio and product cost inflation. Whereas now, his financial expertise is used to help Feeding America plan strategically for the long term and ensure the organization is working as efficiently as possible.
In addition, reliance on uneven donations and government assistance makes planning more difficult for CFOs of charity organizations, according to the report.
Read the full report here.
More articles on healthcare finance:
CommonSpirit delays Q4 financial filing
Steward Health Care reports $592M loss amid major 2-year expansion push
St. Luke's hires consulting firm to evaluate its finances