Nonprofit and for-profit organizations have more in common operationally than many realize. Both require strong financial management, effective budgeting, cash flow monitoring and strategic planning. They face similar challenges around staffing, technology, compliance and operational efficiency. What distinguishes nonprofits is their opportunity to develop dynamic financial strategies that embrace flexibility and adaptability.

Nonprofits operate in an environment rich with diverse revenue streams — such as grants, donations and philanthropic partnerships — each bringing its own rhythm and potential. While fixed expenses like rent and payroll remain constant, this creates an exciting opportunity for strategic financial planning.

As an experienced financial leader, a Fractional CFO can transform this dynamic landscape into a competitive advantage, building reserves, diversifying funding sources and creating sustainable systems that strengthen your organization’s ability to fulfill its mission with confidence.  

The Nonprofit Finance Fund’s 2025 State of the Nonprofit Sector Survey reveals some of the scenarios a Fractional CFO can help leaders like you manage to make the most of every opportunity. 

1) Facing macro-economic pressures

According to the NFF report, 85% of nonprofit leaders anticipated an increase in demand for their services in FY 2025, and more than half (54%) said they didn’t think their organization would be able to keep up. 

The leaders reported operational risks like delays in funding (38%), managing expenses with high inflation (75%), and raising enough funds to cover their full costs (81%). 

Takeaway: If your nonprofit is dealing with issues like these, you’re clearly not alone. Operational efficiency is key to managing them, and keeping administrative costs low will ensure more of your funds are going toward your organization’s mission.

A Fractional CFO knows how to streamline your financial (and operational) processes to make things easier for your team and direct more resources to your efforts. They can also bridge the communication gap between your finance team, who might be feeling overwhelmed with data and requests, and your leadership, who might feel like they don’t have the best information to make important mission-focused decisions.

2) Achieving long-term sustainability

More than half the survey’s participants (52%) had less than three months of cash on hand to support their day-to-day operations. Just 20% had six months of cash, which is typically a signal of financial health. On a positive note, 66% said they had reserve funds set aside for emergencies or new opportunities. 

It’s vital to understand your organization’s short- and long-term financial health, including cash, operating metrics, and needs for staff and technology. Without a firm grasp on those elements, you run the risk of not raising enough funds (especially unrestricted funds) to cover your operating costs. You should know and understand:

• Whether you’re operating at a surplus or deficit (and whether you will be in the future)
• How many months of cash on hand you have (and will have)
• How to interpret your forecast and your budget (which aren’t the same) 
• If your staffing model is set up to run your organization as efficiently as possible.

Takeaway: To keep serving the community your nonprofit supports, you have to understand the numbers behind the numbers that drive your organization. A Fractional CFO helps you understand total operating costs and can provide forecasts to enable both short- and long-term planning. With that information in hand, you’ll be better positioned to continue advancing your organization’s mission for years to come.

A Fractional CFO also helps you maximize the value of your reserve funds through cash flow forecasting and modeling various scenarios where you might need or want to use them — taking many of the “What if?” worries off your plate.

3) Becoming more efficient

More nonprofits in the NFF survey are operating at a deficit than ever before (36% in 2024 vs. 15% in 2021). That’s less money to fund your mission, pay your team and expand your services. The first step in joining the 45% of respondents operating at a surplus is to find efficiencies wherever you can. 

Takeaway: A Fractional CFO, who has experience across a range of organizations, knows where to look for efficiency both financially and operationally. 

When it comes to working capital, a Fractional CFO will know where to put your funds to maximize their value. Ideally, they’ll be earning interest daily. They can also guide you through reorganizing complex financial structures (often built over years and backed by “it’s the way we’ve always done it” thinking) to make daily, monthly, quarterly and annual financial work easier. 

Operationally, nonprofits are often drowning in paper and manual processes that slow down work, frustrate your clientele and vendors, and cause burnout among your staff. A Fractional CFOs helps your nonprofit make fixes like:

• Moving away from paper invoices and checks to speed up payments and free up time for more mission-focused work.
• Identifying the right technologies to implement to streamline clunky processes that harm your progress.
• Streamlining and standardizing KPIs to deliver concise, strategic financial reports and plans to leadership, rather than overwhelming them with excessive detail.

A Fractional CFO brings the financial leadership nonprofits need to succeed

Nonprofits have opportunities to excel on many different fronts, and with the right guidance from an experienced Fractional CFO, you can approach them with more confidence. Through more efficient processes, stronger cash flow management, and sound financial strategy from your Fractional CFO, you can focus on your organization’s mission and put your financial worries to rest.

Is your Kansas City nonprofit looking for financial leadership? Contact Kerry George at kerry@crowncfo.com to bring a trusted, expert Fractional CFO to your organization.