2025 Nonprofit Leaders Report
Growth Challenges Are 6× More Likely Without a Finance & Accounting Partner
A survey of 100 nonprofit leaders — CEOs, COOs, Executive Directors, and Founders at organizations from $3M to $200M in revenue — on their top financial challenges, talent struggles, and the strategic advantages of outsourcing finance.
Executive Summary
BTQ Financial (a division of Consero Global) surveyed 100 nonprofit leaders — including CEOs, COOs, Executive Directors, and Founders — about the financial challenges and opportunities shaping their organizations in 2025.
All respondents represent nonprofits operating in large U.S. metro areas, with annual revenues from $3 million to $200 million. Sectors include human and health services, animal welfare, and charitable and social-service organizations.
With nearly one-third of respondents already working with a third-party finance and accounting partner, this report quantifies how those partnerships change the picture — particularly for assessing financial sustainability, producing accurate and timely reporting, and meeting audit and regulatory deadlines. Partnered nonprofits report more accurate budgets and forecasts and greater success meeting regulatory deadlines.
Key Findings
Six numbers that define how nonprofit leaders are navigating 2025.
More Than a Hiring Problem
Staffing gaps in the finance function are creating operational risk across the nonprofit sector.
Staffing challenges in finance ripple directly into operational inefficiency. Nonprofit leaders report it takes an average of 19 days to close the books — delaying critical decisions. About 50% of respondents have 3–5 open positions on their finance teams, and filling them takes roughly five months on average. High turnover compounds the problem: 38% of leaders describe turnover as frequent or very frequent, making it difficult to maintain continuity and expertise.
| Time range | Respondents |
|---|---|
| Less than 10 days | 9% |
| 11–20 days | 55% |
| 21–30 days | 27% |
| Over 30 days | 9% |
| Frequency | Respondents |
|---|---|
| Rarely | 28% |
| Occasionally | 34% |
| Frequently | 25% |
| Very frequently | 13% |
Accounts receivable
For 93% of respondents, at least a quarter of funding comes from government sources like contracts and grants. Among those, 90% face AR challenges — delayed or rejected invoices, compliance snags — and 31% encounter them frequently or very frequently.
Cash-flow management
Nearly three quarters (74%) of leaders deal with cash-flow problems at least occasionally, and 54% reforecast quarterly or more often. Frequent adjustments constrain long-term planning and financial stability.
Fund reclassification
Over 36% reclassify funds at least quarterly, some monthly. Only 7% reclassify just once a year — a signal that allocation processes still need work at most organizations.
Timely, accurate reporting
Accurate, timely financial reporting and scaling finance to support growth rank among the top five challenges overall — but are materially less severe at organizations already partnered with a finance and accounting provider.
Top Financial Hurdles
Assessing sustainability and risk tops the list — but the gap between partnered and non-partnered nonprofits is striking.
| Challenge | Respondents |
|---|---|
| Assessing financial sustainability and risk | 34% |
| Ensuring accurate and timely financial reporting | 31% |
| Audit preparation and compliance with regulations | 29% |
| Scaling finance functions to support growth | 28% |
| Establishing well-defined, consistent financial processes | 25% |
| Low or insufficient operating reserves | 25% |
| Staffing and skills gaps in the finance department | 20% |
| Maintaining consistent cash flow | 20% |
| Managing mergers or combinations | 20% |
| Revenue recognition and reconciliation for donations and grants | 20% |
| Adapting to internal changes (restructuring, new leadership) | 17% |
| Managing restricted and unrestricted funds | 16% |
| Efficiently handling accounts receivable and payable | 16% |
| Grant, contract, and government receivables management | 14% |
Partnered vs. non-partnered: the difference is measurable
| Challenge | Partnered | Not partnered |
|---|---|---|
| Ensuring accurate and timely financial reporting | 23% | 35% |
| Scaling finance functions to support growth | 6% | 38% |
Nonprofits working with a finance and accounting partner are 6× less likely to struggle with scaling finance to support growth (6% vs. 38%). A similar gap shows up in reporting accuracy: 23% of partnered nonprofits cite it as a challenge, compared to 35% of those without a partner.
Voices from nonprofit leaders
“Conduct regular internal audits or engage external auditors to review financial reports to ensure compliance and transparency of financial data.”
Executive Director, Charitable or Social Services Organization
“We have third-party financial partners which can help us solve these challenges.”
COO, Credit Union or Cooperative
“Addressing skills gaps by hiring specialist financial talent and funding training for current employees.”
CEO, Health and Medical Organization
“Effective management of donor relationships, including tracking donations and issuing receipts.”
CEO, Animal Welfare Organization
Transforming Operations Through Outsourcing
Nonprofits already outsource. Finance and accounting is the remaining opportunity.
Every leader we surveyed (100%) already outsources at least one internal function — IT, data, payroll, legal, marketing, or web. But only 30% outsource finance and accounting, leaving the majority without access to the efficiency gains, expertise, and scalable capacity that a finance partner can provide.
| Function | Respondents |
|---|---|
| IT support and data management | 53% |
| Legal and compliance services | 45% |
| Marketing, communications, and fundraising | 41% |
| Web and digital services (development) | 41% |
| Program evaluation and reporting | 31% |
| Accounting and financial management | 30% |
| Payroll and benefits administration | 30% |
| Human resources and recruitment | 29% |
| Event planning and management | 26% |
Most-used outsourced financial services
| Service | Respondents |
|---|---|
| Strategic financial planning & analysis | 68% |
| Grant management and reporting | 65% |
| Staff augmentation and fractional CFO | 55% |
| Budgeting and forecasting for programs and operations | 42% |
| Audit preparation and support | 42% |
| Revenue recognition and reconciliation | 42% |
| Cash management and cash flow | 35% |
| Conversion from cash to accrual accounting | 35% |
| Fund accounting and allocation of restricted funds | 35% |
| General ledger cleanup and maintenance | 32% |
| Compliance assistance for nonprofits | 26% |
| Financial due diligence for partnerships or mergers | 23% |
Finance as a Service (FaaS) for nonprofits
For organizations looking beyond point services, Finance as a Service combines skilled finance professionals, proven systems and technologies, and disciplined processes into a single operating model. BTQ’s FaaS delivery for nonprofits spans three categories:
Finance & accounting
Accounting, planning & budget development, reporting and analysis, accounts payable, accounts receivable, cash management, and audit preparation.
Revenue cycle management
Medical billing self-service portal, guidance on third-party billings, HIPAA-compliant weekly claim submissions, fast remittance posting, claim-resolution support, collection and denial reporting, dedicated client manager, and comprehensive AR reporting.
Grants & contract management
Expense management and allocation, funder submission and processing, compliance and reporting, audit trails, and financial analysis and planning.
Why Nonprofits Partner with Finance & Accounting Providers
Leaders cite time back for mission work as the #1 benefit — followed closely by efficiency, reporting quality, and specialized expertise.
- 45% More time for leadership to focus on mission-driven activities
- 42% Time savings from streamlined financial and accounting processes
- 42% More timely and accurate financial reporting
- 39% Access to specialized nonprofit financial expertise
- 35% Cost savings from staff and financial systems
| Benefit | Respondents |
|---|---|
| More time for leadership to focus on mission-driven activities | 45% |
| Time savings from streamlined financial and accounting processes | 42% |
| More timely and accurate financial reporting | 42% |
| Access to specialized nonprofit financial expertise | 39% |
| Cost savings from staff and financial systems | 35% |
| Ability to make a better case for more funding | 35% |
| Enhanced ability to manage and report on restricted and unrestricted funds | 35% |
| Improved ability to meet financial regulatory reporting deadlines | 32% |
| Support with regulatory compliance and reporting | 29% |
| Preparation and support for audits | 29% |
| Greater continuity with less finance and accounting turnover | 29% |
| Assistance with funder reporting and grant management | 23% |
Empowering Nonprofits to Make an Impact
Today’s financial challenges demand more than resilience — they demand strategic solutions. By streamlining financial processes, improving compliance, and unlocking specialized expertise, a finance and accounting partner frees nonprofit leaders to focus on their mission-driven work. For the 70% of nonprofits not yet leveraging these opportunities, now is the time.
About BTQ Financial
BTQ Financial, a division of Consero Global, has been partnering with nonprofit organizations for over 20 years, revolutionizing financial management across the sector. Through a cloud-based platform, BTQ delivers the financial clarity and efficiency needed to move missions forward.
Strategic nonprofit leaders adopt BTQ’s cost-effective Finance as a Service (FaaS) model to free up time and focus on the mission at hand. We provide the financial expertise, technology stack, and industry knowledge nonprofits need to achieve superior business management — across outsourced finance and accounting, revenue cycle management, and grant and contract management services.