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Turning a Vacancy in Financial Leadership into an Opportunity for Change: The Interim CFO and the Transitional CFO.

For nonprofits, an unexpected vacancy at CFO can be a crisis. Whether temporary or of indeterminate length, the absence of a steady hand on the financial wheel induces panic for many leaders and their boards. But a savvy organization will seize this moment as an opportunity for reflection and strategic refinement. Suppressing the instinct to rush out and hire a new CFO immediately provides space to review infrastructure and practices, consider staffing arrangements, and make software upgrades.

Take a Breath

Instead of directing energy exclusively at covering the transition, some organizations make the strategic choice to engage a temporary CFO. These short-term leaders typically have deep experience that spans many different organizations and are skilled at effecting rapid change. For short-term gaps with a returning incumbent, an interim CFO can keep the trains running and tackle discrete projects. For departures and separations, while a search gets underway, the transitional CFO can take the opportunity to assess, enhance, and transform an organization's fiscal management practices, setting the stage for a successful handoff to the new financial leader.

The Interim CFO

In the case of a planned leave of absence of the chief financial officer the work of an interim CFO will focus on continuity and maintenance. Even so, a light touch assessment from a new set of eyes may support enhancement of the organization's financial practices. It is a delicate balance stepping into the shoes of an absent CFO, so establishing the role and purview of the interim at the outset is essential.

The Transitional CFO

CFO transitions can be leveraged as part of broader organizational transformation such as a restructuring or rightsizing. As nonprofits grow and change, the requirements for fiscal infrastructure and systems also need to grow and change.

The departure of a CFO often prompts some soul-searching: Why the turnover in this position? A transitional CFO can help answer that question for organizations that exhibit several key traits:

* Openness to new Ideas at the leadership levels: board, executive, management team and staff

* Clarity regarding what the change may be and the processes for getting there with clear check points and benchmarks

* Commitment to an investment of time and money in making the change they seek in their financial infrastructure

* Willingness to implement technology for greater efficiencies.

Some organizations undergoing growth or right-sizing may not need to hire a full-time CFO at all. For these organizations, a Transitional CFO can work part-time to provide expert support in reviewing and assessing financial infrastructure, making recommendations, and facilitating the implementation of new structures and systems. This can be a sound investment in the future of the organization.

For growing organizations, a Transitional CFO can provide financial strategy, helping the executive and finance committees of the board ensure that financial infrastructure grows in parallel to growth in programs by identifying what systems to develop and when. The Transitional CFO might identify ways to optimize workflow and relationships within the department and across the organization. Or, he or she might support internal staff with budget templates, review of process and technology, multi-year forecasting and tactical issues like benefits analysis.

Vacancy as Opportunity

Vacancy can be scary, but there are experts available who focus specifically on meeting the immediate needs and capitalizing on the strategic opportunity. Whether an organization needs change or continuity, a commitment to fiscal leadership at the right time amounts to a long-term investment in an organization's long-term resilience.

Nonprofit organizations depend on FMA to offer advisory services and practical tools to address challenges and opportunities as well as navigate significant decisions. Funders routinely call on FMA to strengthen grantee operations and fiscal management, improve their own grant-making or investment capacity, and increase the financial knowledge of their staff.

Henry Lopez is Director of Financial Management Services at FMA. hlopez@fmaonline.net

Cate McAleavey is Lead Consultant for Transitional Services at FMA. cmcaleavey@fmaonline.net
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Title Annotation:Sponsored Content from Fiscal Management Associates
Author:Lopez, Henry; McAleavey, Cate
Publication:The CPA Journal
Date:Apr 1, 2019
Words:644
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