People

The Cure for Burnout: Go Nonprofit

CFOs who have transitioned from companies to not-for-profit organizations love their work, even if the switch wasn't necessarily easy.
Sarah JohnsonApril 17, 2008

Three years ago, Usha Chaudhary was deep in the doldrums. After 20 years at the same company, she was working about 80 hours a week, and she needed a change.

In less than month of job searching, she received an offer from the United Way of America to become the nonprofit’s CFO. Soon, her finance career took a dramatic shift. Shedding the familiarity of her job at Freddie Mac as a vice president for the mortgage lender’s investments and capital markets division, she became the overseer of a significantly smaller budget and staff — and an entirely different business model.

She now works about 60 hours a week on average, sometimes on the weekends, and has constant contact with the office. But at this job, working hard isn’t a drag. “Maybe it’s psychological, but I don’t mind it as much,” Chaudhary told CFO.com. “Even though the challenges and stresses are there, because of the type of work I do or the environment I’m dealing with, it doesn’t seem as stressful as it did at Freddie Mac.”

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Finance executives who have made the switch from the confines of the corporate world to the unknown of a nonprofit organization say they find their current jobs more rewarding. Still, they acknowledge that nonprofit newbies have to make both professional and personal adjustments. “It’s a completely different mind-set,” Chaudhary says.

That can mean checking your ego at the door. Former corporate CFOs used to their own administrative assistants will often find themselves working on the front lines of a nonprofit, whether that means making their own photocopies or working alongside volunteers to further their organizations’ cause. “You have to be the type of person who will roll their sleeves up and not only help within the financial and accounting department but also be willing to help deliver the services that the nonprofit is delivering,” says David Seabrook, CFO of College Summit, which helps low-income high school students get a higher education.

UshaChaudhary“We can’t always say that if you invest X dollars in this infrastructure, you’ll see this level of improvement in this community,” says Usha Chaudhary, CFO, United Way of America, on the challenge of working for a nonprofit.

There’s no question a personal adjustment is required, say the CFOs who helm the finances at nonprofits. How can it not, when you move from an environment where bottom-line results reign, shareholders’ needs come first, and regulatory compliance is a major priority, to an outfit where those concerns are secondary or nonexistent?

To be sure, nonprofit finance executives consider internal controls important, but achieving their organization’s mission — often involving the greater good — comes before all else for their employers. Forget the earnings-per-share targets, the quarterly pressure to meet financial goals, and think more along the lines of expanding affordable housing or raising millions of dollars in donations to help a community devastated by a major storm.

At Freddie Mac, Chaudhary was used to resources being thrown her way when a controls or compliance issue arose. But at United Way, which had a weaker financial infrastructure, those needs can get pushed aside when dollars for improving a community or helping the homeless have to be raised. “What suffers as a result is some of the investment you need to make for running the business,” she says.

For nonprofit CFOs, the challenge of balancing their department’s needs and those of the organization of a whole is part of what keeps them motivated. Donna Weston can attest to that as an 18-year CFO of the Scripps Research Institute. “The science we do is the most important thing, and everything that those of us who support the scientists do has to be directly related to moving the work forward,” she says.

Could You Handle the Transition?
Of course, not all CFO jobs are created equal. An executive overseeing the finances of a large corporation may have a harder time transitioning to a nonprofit than a CFO helming a startup, according to Kathleen Yazbak, managing director of national relationships for executive search firm Bridgestar, which specializes in nonprofits. Someone who has worked across departments and in a consensus-oriented atmosphere may also be better suited for nonprofit life.

To find out if a CFO could handle the culture shock of switching to a nonprofit, the interview process is crucial. Yazbak suggests drilling future employers on their vision, strategy, and resources, and ask: What issues should I be concentrating on during my first 30 to 90 days? “You’re always going to be overwhelmed at a new job, there’s always too much to learn and too much to do, so it helps to prioritize how you will spend your time,” she says.

Another way to see if nonprofits would make a good career choice is by volunteering to serve on a nonprofit’s board, Yazbak recommends.

One issue metrics-loving CFOs need to think about is how they’ll be able to measure their organization’s worth. Admittedly “bottom-line oriented,” Chaudhary had to adjust from the tangible goals of earnings and market share to long-term goals that are much harder to gauge on a quarterly basis. Decreasing the level of a community’s homeless population can only happen over time. “It’s a challenge. We have to find other ways to demonstrate our value-add,” she says. “We can’t always say that if you invest X dollars in this infrastructure, you’ll see this level of improvement in this community.”

Within her department, though, Chaudhary is able to measure her and her team’s performance by comparing the budget to spending levels, as well as their compliance with laws and regulations.

CFOs should also look at their own personalities to see if they could handle the change. If they consider themselves a self-starter, a driver of strategy, a change agent, and an educator, they may be on the right track. The majority of nonprofits are too small to even afford a CFO, and those new to ramping up their finance function are run by people who are not familiar with financial reporting and budgeting. In that case, the CFO will spend his or her time sharing their knowledge with colleagues and may have to create a financial infrastructure from scratch.

It also helps to be humble. “If they need a lot of pomp circumstance around their role, they’re probably in the wrong place,” Yazbak says.

For nonprofit CFOs who are happy in their current jobs, they’re doing fine without the prestige of a fancy office and a fistful of stock options. “I’m not with an organization that sells widgets to consumers who basically could do without that particular widget,” says Seabrook, who has also worked at nonprofit Community Preservation and Development Corp. after jobs at Amtrak, Ernst & Young, and a biotechnology firm. “We are making a difference in the lives of people. That’s why working at a nonprofit is where my heart is right now.”