To better understand what is keeping nonprofit executives up at night, Abila – a leading software provider to nonprofit organizations – surveyed 414 finance professionals who currently work for a nonprofit or association between June and July 2016.
Nonprofits have made headlines recently while dealing with headaches brought on by new federal rules on overtime pay, deferred compensation and new accounting standards for charities. Keeping up compliance with the various finance-related rules and regulations that govern the sector proves to be a challenge for nonprofits.
Key findings from the 2016 Nonprofit Finance study reveal what challenges nonprofit executive are currently facing.
- Managing Revenue – Survey participants identified managing multiple sources of revenue as the biggest financial challenge they face as finance professionals. Each source of income has complex rules and restrictions to be taken into consideration.
- Compliance – Nonprofit finance professionals have identified compliance as a significant burden that gets costlier over time, especially within the past 2-3 years. The study found that one-in-four finance professionals are spending over 120 hours per year on compliance. Half of those surveyed believe if their organization grows compliance difficulty will also grow.
- New rules and regulations – Finance professionals often support the introduction of new rules and regulations; however, they still worry what effect they will have on their organization. New rules and regulations often mean increased costs for nonprofit organizations. According to the survey, only one-in-five believe regulations do more good than harm.
- Staff Turnover – The unexpected departure of an employee can significantly disrupt day-to-day operations. 46 percent of survey participants responded they are unprepared if a key finance position left suddenly. Only 12 percent are confident they could survive a sudden departure in the finance department.
- Fraud – Organizations recognize fraud as a threat and have put significant effort into fraud prevention. Despite implementing practices, such as separating duties, only 38 percent of survey participants feel that members of their management and board of directors are very educated on how to avoid fraud.
- Audits – According to the survey, 36 percent of finance professionals claim they experience more than one audit per year. The number of audits can be problematic for organizations because of the lost time preparing for audits. When the preparation time for an audit can exceed two weeks, there is a serious amount of time lost for finance professionals. Time that could be better spent deterring fraud or preparing for staff turnover.
We recognize it can be difficult to keep up a progressive pace when the rules and regulations are constantly changing. The professionals in our office can help you with the challenges your organization faces. We can help ease the complexity that keeps you up at night, call us today.