When Renee Skolaski joined MercyFirst as President and CEO five years ago, she inherited a finance department that was siloed, overly dependent on a single CFO, and running much of its reporting offline in Excel. 

With a longtime CFO departing, Skolaski faced a pivotal decision: hire a traditional replacement or rethink the model entirely. After discovering BTQ Financial at a board meeting for the Council on Family and Childcare Agencies (COFCCA), she chose the latter — engaging BTQ’s Finance as a Service (FaaS) solution to overhaul MercyFirst’s entire financial operation. 

Eighteen months later, the results speak for themselves: on-time year-end closes, clean audits, stronger cash flow, and real dollars flowing back into programs that serve New York’s most vulnerable children and families.

“We were operating a finance department that was really siloed. A lot was offline in Excel. Scary stuff for an agency our size.” — Renee Skolaski, President & CEO, MercyFirst

MercyFirst Profile

• Industry: Human and Social Services (Child Welfare, Foster Care)
• BTQ Solution: Finance as a Service / outsourced CFO and finance operations support
• Company Size: Approximately 500 employees
• Annual Revenue: Approximately $60 million
• Footprint: About 14 locations across Brooklyn, Queens, Nassau, and Suffolk Count

Partnership Highlights

• Achieved the organization’s first-ever on-time year-end close
• Reduced in-house finance staff from 14 to 2, supplemented by a dedicated BTQ team
• Delivered a 3% cost-of-living adjustment across all programs — a first in years
• Reinstated a 4% non-match 403(b) contribution for all staff, which hadn’t occurred in over six years
• Strengthened balance sheet and increased unrestricted net assets
• Accelerated billing cycles and improved cash flow positioning
• Improved relationships with city, state, and federal funders through timely reporting and full contract utilization
• Increased financial literacy and budget ownership across program leadership

What BTQ Delivered

BTQ’s engagement with MercyFirst began with understanding the organization’s mission and the complexity of its funding — a mix of city, state, and federal contracts, per diem rates, Medicaid billing, and private grants. 

From there, BTQ deployed a dedicated team led by Practice Manager Eduard Bulku, bringing specialized expertise in audits, contract management, cash flow, and budgeting.

Establishing a reporting cadence. 

BTQ immediately implemented a structured rhythm of meetings, documentation, and reporting milestones. Monthly soft closes replaced a pattern of late year-end closings and repeated audit extensions. This cadence ensured that no critical information lived with a single person and that nothing fell through the cracks.

Granular contract-level coding. 

One of the most impactful changes was instituting real-time, granular expense coding at the contract level. Previously, insufficient coding meant the organization couldn’t close months on time, which cascaded into delayed audits, slower cash flow, and poor visibility into program-level spending. With proper coding in place, MercyFirst began maximizing every dollar of restricted revenue across categories.

Budget ownership for program leaders. 

BTQ introduced monthly in-person budget-versus-variance meetings with program directors, shifting financial accountability from a top-down “mother, may I” model to one where program leaders understand and own their budgets. This built fiscal literacy across the organization and empowered teams to make informed spending decisions in real time.

Strategic partnership with funders and the board. 

BTQ accompanied MercyFirst leadership to meetings with government funding sources, introduced new processes, and helped negotiate more favorable terms. Eduard and his team also present directly to MercyFirst’s board of directors, fielding questions with a depth of knowledge that earned the trust of initially skeptical board members.

Scenario planning and proposal support. 

As the funding landscape shifted — particularly around federal programs like the Office of Refugee Resettlement — BTQ built multiple budget scenarios for board review and partnered closely on competitive grant proposals, helping MercyFirst position itself strategically for continued funding.

Renee described one of the earliest and most important wins this way: “The first change that happened for us was the clear regular reporting.” She also noted that BTQ “immediately put us on schedule of timely reporting, timely filing reports.”

How the Partnership Changed the Organization

What made the engagement especially effective was that BTQ did not operate like a distant vendor. Instead, the team became embedded in MercyFirst’s day-to-day financial management and planning. 

That shift helped the organization move from a top-down finance model to one where program leaders had more ownership of their budgets and better insight into how spending decisions affected performance.

That cultural change mattered just as much as the technical improvements. With stronger reporting in place, MercyFirst could make faster decisions, communicate more clearly with its board, and approach donors and funders with greater confidence. 

The organization also gained a better understanding of where private funding could fill gaps in government support, making fundraising strategy more targeted and effective.

Perhaps most importantly, the partnership turned finance into a tool for growth rather than a source of uncertainty. What had once been a cautious, fragmented function became a stronger platform for stability, planning, and investment in staff and programs.

Building Financial Strength with BTQ

If your organization is dealing with delayed reporting, limited visibility, cash flow pressure, audit challenges, or a finance function that can’t keep pace with growth, BTQ can help. MercyFirst’s experience shows what’s possible when the right financial partner brings structure, expertise, and strategic support to the table.

Request a consultation with BTQ to explore how a tailored finance solution can help your organization improve reporting, strengthen cash flow, increase confidence with boards and funders, and create a stronger foundation for long-term growth.

For nonprofit leaders, financial management is rarely what drew them to the work. Yet it’s often what determines whether an organization whether an organization can grow, attract new funding, and ultimately serve more people. The tension between mission-driven leadership and sound fiscal operations is one that countless organizations face—especially those in the $2–$5 million range trying to scale.

In a recent webinar hosted by BTQ Financial, Ivy Gamble Cobb, CEO and co-founder of The Family Center—a 32-year-old New York City nonprofit serving vulnerable families—sat down with Naima Chisolm, BTQ’s Director of Business Development, to share how outsourcing their finance department transformed the trajectory of the organization.

What began as a $3 million operation running on Excel spreadsheets is now a $6.5 million organization with two licensed mental health clinics and a diversified funding portfolio.

The Breaking Point: When Internal Finance Couldn’t Keep Up

When Ivy took over as Executive Director of The Family Center in 2006, the fiscal department consisted of one and a half people. The organization managed a complex web of federal, state, and city contracts—none of which aligned with their fiscal year—each carrying different reporting requirements.

Finding a single person who could handle both big-picture strategy and day-to-day tasks like voucher processing proved nearly impossible. Even investing in financial management software wasn’t the answer without the right people to run it. Ivy quickly realized the existing model had critical vulnerabilities:

• Everything depended on one person—a single point of failure
• The executive director’s time was consumed by financial oversight instead of fundraising
• The organization couldn’t pass what Ivy calls the “hit by a bus theory”—if that one person left, operations would collapse
• Financial data lived in spreadsheets with no centralized management system

The decision to outsource was one of the first Ivy made in her new role—and one she says she would never reverse.

At $3 million, how much money are you going to be able to really devote to the financial management side? Most of the dollars that we got were for program services.” — Ivy Gamble Cobb, CEO, The Family Center

Using Financial Data to Diversify Funding Sources

The Family Center was originally founded to serve families impacted by HIV and AIDS. But Ivy and her team recognized early on that their model could apply to families dealing with substance use, domestic violence, and other destabilizing factors. The challenge was proving it to new funders.

Having reliable, well-organized financial data made all the difference. By pairing program outcomes with fiscal reporting, The Family Center could walk into meetings with private foundations and present a clear, data-backed case:

• What government contracts were covering—and where the funding gaps existed
• The cost-benefit analysis of their service model
• How private support would complement (not replace) government funding
• Measurable outcomes tied to real dollar amounts

This ability to quantify impact and funding needs helped The Family Center expand beyond HIV services and attract a diversified base of public and private funders.

“Through being able to show our program data along with our financial data, we could show the cost benefit of this model that we had developed.” — Ivy Gamble Cobb

Turning Audit Season from “Hell” into a Seamless Process

Before outsourcing, audit preparation was one of the most painful periods of the year. With financial data scattered across Excel files and limited internal staff, pulling together the required documentation was an enormous burden.

Since partnering with an outsourced finance team, The Family Center has experienced consistently clean audits, timely 990 filings, and a process that no longer disrupts operations. The board receives audit documents promptly and can meet with both the auditor and the financial team to get questions answered—all without scrambling.

For funders who rarely visit organizations on-site, timely and accurate financial reporting is often the primary lens through which they evaluate an organization’s credibility.

“Since our partnership with BTQ, our audit process has been seamless. It’s been timely. We’ve not had any major findings, major deficiencies, none of that.” — Ivy Gamble Cobb

Creating a Financial Narrative That Builds Donor Confidence

Ivy emphasized that donors and funders want more than a receipt. They want to understand how their dollars are being used and that those dollars are making a measurable impact. Financial storytelling—connecting program outcomes with fiscal transparency—is essential to building and maintaining funder relationships.

With dashboards and regular financial reporting in place, The Family Center can respond to funder inquiries quickly and confidently. Whether a foundation wants to see the financials for a specific program or the board needs a cash flow update between meetings, the data is always accessible and up to date.

This level of transparency has shifted the dynamic from reactive reporting to proactive partnership—exactly what funders are looking for.

“At the end of the day, no one wants to be giving into a black hole where there’s no level of confidence that my donation is actually really making a difference.” — Ivy Gamble Cobb

Bridging the Gap Between Mission Leaders and Finance-Focused Boards

Many nonprofit boards are composed of professionals from the finance world—bankers, accountants, CFOs—who speak a very different language than social service providers. For an executive director trained as a social worker, this can create an uncomfortable gap.

Working closely with an outsourced financial partner taught Ivy the language of balance sheets, profit and loss statements, and cash flow analysis. By walking through financial documents before each board meeting, she developed the confidence to engage with board members on their terms. The result:

• Board meetings became more efficient, with less time spent questioning the integrity of the financials
• The board developed trust in the financial management process
• The executive director could present a unified front—mission rationale alongside financial projections—when proposing new initiatives

“They didn’t teach me any of that in social work school. But BTQ taught me that. And so when I sit in the room with my board members and 40% of them are definitely from the finance arena, now we’re able to have a conversation.” — Ivy Gamble Cobb

Making Bold Moves: Real Estate Decisions and Licensed Clinics

Two of the most significant growth milestones for The Family Center—relocating the organization and launching two licensed mental health clinics—were made possible by having strong financial infrastructure in place.

When it came time to move in 2007, the outsourced finance team analyzed every contract and budget to determine exactly how much the organization could afford in rent. A separate space analysis determined how much square footage was needed. Armed with both numbers, Ivy identified their new space in just two weeks—no wasted time on properties that were too small or too expensive.

Launching the licensed clinics was an even bigger strategic bet. Ivy was transparent with the board from the start: the clinics would be a loss leader for three to four years. But with consistent financial reporting at every board meeting, the board stayed the course. The clinics eventually became self-sustaining and opened doors to federal contracts that wouldn’t have been available otherwise.

“When we decided to take on the licensed clinics, I had an opportunity because BTQ was already working with organizations in that space to sit down with other leaders of nonprofits and say, ‘Give me all the pitfalls.’” — Ivy Gamble Cobb

The ROI of Outsourcing: Peace of Mind and Capacity to Lead

When asked whether outsourcing was worth the investment, Ivy was unequivocal. While the upfront cost can appear daunting, she noted that building an equivalent team internally would have been significantly more expensive. More importantly, the return goes far beyond dollars:

• A full team handling accounts receivable, accounts payable, billing, and voucher processing
• Weekly meetings with a dedicated financial partner
• Strategic guidance for budgeting, contingency planning, and new lines of business
• Confidence in the accuracy and integrity of all financial reporting
• Freedom for the executive director to focus on fundraising, partnerships, and mission delivery

Ivy also highlighted the importance of communication. Her team knows exactly who to contact at the outsourced firm for every area—whether it’s accounts payable, client management, or strategic planning. The model doesn’t create distance; it creates structure.

“There are things that keep me up at night. Knowing whether there is integrity in terms of our finances is not it.” — Ivy Gamble Cobb

Navigating Uncertainty: Contingency Budgeting in a Volatile Funding Environment

With the current funding landscape shifting rapidly, The Family Center is already preparing for multiple scenarios as they head into their next fiscal year. Working with their financial partner, they’re developing:

• A baseline budget assuming full funding
• A contingency budget modeling potential cuts
• Staffing impact analyses tied to different funding scenarios

This kind of forward-looking planning is a necessity. And it’s only possible when an organization has the financial infrastructure and partner support to model scenarios quickly and accurately.

“We’re living in a very volatile funding situation where things are changing minute by minute. So we’re already having conversations around contingency budgeting.” — Ivy Gamble Cobb

Full Outsourcing vs. Hybrid: What Works Best?

A common question from nonprofit leaders considering outsourcing is whether to replace their entire finance department or maintain a hybrid model. In practice, most organizations that fully outsource still retain a liaison—someone on-site who manages the day-to-day communication with the finance partner.

At The Family Center, this liaison handles tasks like:

• Routing invoices from vendors to the outsourced team
• Communicating funder-specific nuances (formatting preferences, reporting quirks)
• Escalating issues when government contracts aren’t vouchered on time

The key takeaway: outsourcing doesn’t mean losing control. It means gaining a team while keeping a hands-on connection to the work.

“We always have someone internally who is the primary conduit with BTQ just because sometimes with the funders there are nuances that we may know that we need to share.” — Ivy Gamble Cobb

Ready to Build Your Nonprofit’s Financial Future?

The Family Center’s 20-year journey is proof that the right financial partnership can be transformational—not just for an organization’s books, but for its ability to grow, serve more people, and lead with confidence.

If your nonprofit is struggling with the burden of in-house financial management, facing an increasingly complex funding landscape, or simply looking for the peace of mind that comes with expert oversight, it may be time to explore what outsourced financial management can do for you.

BTQ offers comprehensive outsourced finance and accounting solutions designed specifically for mission-driven organizations.

Whether you need a fractional CFO, full back-office support, or a strategic partner to help navigate your next phase of growth, get in touch with us for the expertise, infrastructure, and hands-on support to help you get there.

The financial landscape for nonprofits is undergoing massive change, facing challenges from evolving federal grant funding to the pressure of inflation and staffing shortages. 

According to BTQ research, with 72% of nonprofits struggling with staff turnover and 36% experiencing cash flow issues, mission-driven organizations are discovering that traditional approaches to finance and accounting no longer suffice.

The combination of cloud-based accounting software and Finance as a Service (FaaS) offers a powerful solution, addressing immediate operational challenges and positioning nonprofits for sustainable growth and greater mission impact.

The Case for Modernization in Nonprofit Finance

Nonprofits face mounting financial and operational challenges — from staffing shortages to changing grant structures and inflation-driven cost increases.

Michael Blanton of Sage emphasized that the pace of change in nonprofit finance is unprecedented, noting how modern finance teams are being forced to adapt quickly to evolving funding environments and technologies.

“We’ve moved from asking, ‘Can we afford technology?’ to ‘How can we survive without it?’” — Michael Blanton, Sage Intacct

According to Sage research, the core internal challenges plaguing nonprofit finance teams have remained consistent:

• Limited process automation and outdated systems
  
• Inefficient, manual reporting
  
• Difficulty recruiting and retaining qualified finance staff
  
• Lack of real-time visibility into key metrics

By modernizing their systems, nonprofits can shift from reactive financial management to a proactive, strategic role that supports their mission.

The Power of Cloud Accounting for Nonprofits

Cloud-based accounting software — like Sage Intacct, BTQ Financial’s core general ledger platform — delivers automation, scalability, and transparency that traditional systems can’t match.

Joyce Denison of BTQ Financial explained that Sage Intacct is purpose-built for nonprofit accounting, offering essential features such as:

• Automated and customizable financial reporting
  
• Built-in grant management and fund tracking
  
• Multi-entity consolidation and real-time dashboards
  
• AI-driven automation to improve efficiency and accuracy

“At BTQ, we selected Sage Intacct because it’s designed specifically for nonprofits and empowers our clients with real-time, actionable insights.” 

Cloud accounting allows teams to stay current with evolving technologies, enhance security, and integrate seamlessly with donor management systems — all while reducing overhead and IT dependency.

The Strategic Advantage of Finance as a Service (FaaS)

While cloud technology provides the platform, Finance as a Service (FaaS), as delivered by an expert like BTQ Financial, provides the complete solution—technology, people, and processes. FaaS eliminates the immense burden of managing a complex, internal finance function.

“Having a finance partner that can grow with you is critical as you get additional funding. Having a partner that knows what’s next and what’s required can really take your organization to the next level,” said Denison.

FaaS solves the main obstacles of moving to the cloud:

• Eliminates Long Implementation: BTQ provides a ready-to-go environment, getting clients up and running in 60 to 90 days.
• Fixed, Transparent Costs: Removing the high, variable cost and team-time drain of custom-building an ERP.
• Expert Talent: Providing full Finance & Accounting (FNA) function, including VP/CFO-level financial leadership.

This comprehensive partnership extends benefits beyond the back office. BTQ’s finance solutions empower every level of an organization:

• Program Managers gain accountability and insight into their specific budgets with transparent dashboards.
• Executive Leaders make more confident, data-driven decisions.
• Boards and Stakeholders have increased confidence and trust in the financials.

This partnership-based approach ensures nonprofits focus on their mission—not their month-end close.

Case Study: How The Door Transformed Its Financial Operations

When The Door, a New York City–based youth services nonprofit, became independent from its parent organization, it needed to rebuild its entire financial infrastructure.

Partnering with BTQ Financial, the organization:

• Modernized its tech stack using Sage Intacct
  
• Improved financial visibility and audit readiness
  
• Enhanced reporting and leadership decision-making
  
• Achieved over $1 million in savings within 2.5 years

“With those foundations in place, The Door was able to make faster, data-driven decisions and strengthen its financial health.”

This case highlights how modern financial solutions not only streamline operations but also deliver measurable cost and impact benefits.

Partner with BTQ Financial to Elevate Your Mission

Nonprofit finance is about enabling mission success. With BTQ, your organization gains a trusted partner to deliver efficiency, visibility, and strategic insight.

Ready to elevate your organization’s financial operations?

BTQ Financial helps you transform financial management into a growth catalyst for your mission.

Request a consultation today and discover what mission-driven finance can look like for your organization.

Nonprofit leaders reliant on government grants face both shrinking dollars and sharper questions about how every dime is spent.

With over two decades of nonprofit financial management expertise, BTQ Financial has helped over 70 nonprofits successfully manage over $1 billion in operating budgets through dynamic conditions.

We explore the reasons behind this shift in scrutiny and share key questions for organizations to ensure their finance functions are prepared, proactive, and transparent.

The Shifting Landscape of Financial Oversight

While we’re not seeing a full wave of oversight changes just yet, there are clear signs that expectations around accountability are tightening, especially for those organizations receiving government funding.

• Funding Uncertainty: Many nonprofits have experienced, or anticipate, reductions in government funding, leading to uncertainty in planning and staffing.
• Increased Scrutiny: There are early signs of increased attention on how funds are being utilized by nonprofits, with a shift towards greater scrutiny from funders.
• Federal Signals: Recent executive orders indicate a renewed federal focus on preventing fraud, waste, and abuse in public spending.
• Pass-Through Entity Requirements: Pass-through entities are increasingly demanding more documentation, active monitoring, and higher expectations from their subrecipients.
• Emphasis on Internal Controls: Funders are pushing for stronger internal controls and real-time compliance, not just during audits but throughout the year.

This new environment has created a lot of uncertainty about how to plan, how to staff, and how to respond when the funding picture shifts.

1. Do We Have Instant Financial Clarity?

Funder emails rarely wait for month-end. Data quality and system integration should enable you to tell your financial story in hours, not weeks.

“This isn’t just about access to reports, it’s about the quality of your data, how your systems talk to each other, and whether your team can tell the story behind the numbers.” 

• Funder Question Simulation: Regularly simulate funder questions, particularly concerning spend-down variances and restricted fund usage, to assess response capabilities.
• Understanding Regulations: within government contracts.
• Spend-Down Plans: to ensure effective and funder-approved utilization of funds throughout the year.
• Effective Financial Reporting Tools: Investing in and regularly reviewing accounting and grant management software for accurate and efficient reporting.
• Staff Understanding of Reports: All relevant staff should understand financial reports and be able to explain them to funders.
• Ongoing Budget-to-Actual Monitoring: Monthly or at least quarterly budget-to-actual monitoring, involving both finance and program personnel to identify and address changes quickly.
• Program Staff Involvement in Budgeting: Engaging program staff early in the budget process fosters greater accountability for spending and leads to a stronger, more realistic budget.

Anyone in contact with funders should understand how funds are being spent, even if that means doing a budget modification.

2. Are Our Internal Controls Real, or Just on Paper?

Beyond having policies and procedures documented, nonprofits need to verify their internal controls are working in practice, not just existing on paper, to prevent mistakes and ensure accountability.

Most organizations have policies and procedures written down somewhere, but the real question is: “Are those documents accurate and are staff following them?”

• Comprehensive Documentation: Documented policies and procedures manuals that are readily accessible and understood by all staff.
• Regular Updates: To policies and procedures manuals to comply with new general accounting principles and changes in uniform guidance.
• Spot Checks/Mini Audits: Conducting regular, informal spot checks or mini audits of financial transactions helps identify and address issues before a formal audit.
• Reviewing Past Mistakes: Analyzing previous audit reports or funder findings, as well as insights from mini audits, helps identify root causes of errors (e.g., staff training, software issues) and prevent recurrence.

“Spot checks are an opportunity, not a failure. It’s a chance for us to find out if there’s something that we missed, if a process is not being followed, someone’s not trained and it can be a really useful tool.”

3. How Quickly Can We Produce Documentation Requests?

Funder fire-drills are becoming the norm. Nonprofits need systematic organization and regular retrieval system testing to quickly locate and provide documentation upon request.

• Centralized Documentation: Establishing a centralized, easily accessible system for electronic documentation, including clear filing and naming conventions..
• “Funder Ready” Folder: Containing approved budgets, signed contracts, audited financials, and registration/renewal documents.
• Testing Response Time (Fire Drills): Simulate a funder request and give the team a limited timeframe (e.g., 24 hours) to gather and respond to the mock request. Debrief afterwards to identify obstacles and areas for improvement.
• Real-Time Updates: Calendar regular times to refresh and update materials (e.g., liability insurance certificates, board lists) to avoid sending outdated information.
• Nine-Month Audit Review Process: To proactively assess readiness for the annual audit cycle and create a culture of continuous preparedness.

“Have SOPs, even around how to store things electronically. At BTQ we have a very clear way of how we’re filing things and naming conventions, so if a new staff member comes on they’re easily able to find something.”

4. Are We Ready for Informal or Discretionary Oversight?

A single unexpected email can make or break trust. How quickly and clearly you respond can either build confidence or raise concerns.

Beyond formal audits, organizations should prepare for unexpected requests, informal inquiries, and discretionary oversight that may come without advance notice.

• Strong Funder Relationships: Building close, consistent relationships with funders, including program officers and higher-level agency contacts, helps foster trust and anticipate upcoming needs.
• Networking with Other Nonprofits: That share the same funders can provide valuable insights, advice, and contact information.
• Leveraging Technology and Automation: To significantly reduce the time required to generate reports and respond to ad hoc requests, building funder confidence and freeing up staff for program activities.

“Building close consistent relationships, strong relationships with funders is very key. Sometimes that’s difficult… but when you can find that one person…having a good contact at a funder’s office is so helpful.”

Staying Current: Resources and Best Practices

The BTQ team shares tips and tools to keep up with regulatory changes and shifting federal priorities.

Technology

• Grant-tracking and accounting systems that mesh (ledger ↔ grant)
• Automation for GL detail exports and payroll allocations

Regulatory Intelligence

• Grants.gov email alerts for Uniform Guidance updates
• National Council of Nonprofits policy bulletins
• Ask each funder about their own list-serves or portals

Best Practices

• Directly contact funders to understand their communication preferences
• Utilize resources like the National Council of Nonprofits
• Stay updated on uniform guidance requirements
• Monitor federal websites and regulatory updates
• Establish regular check-ins with program officers

Preparation Beats Perfection

Greater scrutiny is coming, but nonprofits that tighten data quality, field-test controls, centralize documents, and cultivate funder relationships can answer tough questions with clarity and confidence.

“Being ready isn’t about catching mistakes. It’s about building structure so your mission keeps moving when oversight ramps up.”

BTQ Financial has spent over two decades refining the very practices nonprofits need to withstand rigorous oversight.

Here’s what partnering with BTQ delivers:

1. A 200-person bench of specialists: Directors, controllers, grant-optimization experts, and CFO-level strategists who act as an extension of your team.
2. Compliance and reporting: Generate detailed financial and compliance reports, maintain audit trails, and ensure adherence to regulations and donor requirements.
3. Financial analysis and planning: Monitor budgets, forecast future expenses, and conduct variance analysis to stay on top of your financial health.
4. Funder submission and processing: Automated approval workflows and integration with your financial systems.
5. Expense management and allocation: Track and allocate expenses to specific grants and contracts with precision, ensuring funds are used according to donor requirements.

Schedule an assessment with BTQ today to start building a resilient and transparent finance function.

Nonprofit organizations are facing a rapidly evolving environment where funding uncertainties, increased service demands, and staffing challenges intersect. 

In light of these trends, BTQ Financial surveyed over 100 nonprofit leaders on the top finance challenges they face, and the strategies that can help address them.

BTQ’s Andrew S. Perumal, Partner and Director of Client Operations, and Sisil John, Senior VP of Finance, sat down to discuss the survey’s findings and highlight how BTQ is working with nonprofits to address and reduce those challenges.

Survey Scope

Nonprofit leaders including CEOs, executive directors, founders, and COOs contributed their insights on critical financial challenges. Annual budgets represented in the survey ranged from $3 million to $200 million.

The survey captured feedback from a diverse range of nonprofits, from small community-based organizations to large national providers.

Despite organizational differences, leaders reported a common set of financial management issues.

The Nonprofit Landscape

Today’s nonprofits navigate a “perfect storm” of rising service demands, funding complexities, and political uncertainties. 

For many, maintaining financial health is a balancing act of mission delivery and risk management.

Key Statistics

• Essential Services: 83% of Americans consider nonprofit services—such as social services, education, and housing—to be essential.
  
• Financial Risk: Between 60%–80% of nonprofits could face serious financial danger if federal grants are disrupted.
  
• Policy & Funding Concerns: 70% of nonprofit leaders worry that the current political climate will negatively affect their organizations.

It’s clear these programs aren’t just “nice-to-have”,  they serve an essential role in their communities. However, the hard truth is that a majority of nonprofits could find themselves at serious financial risk.

Major Financial Management Challenges

Six critical themes emerged from the survey regarding the top financial management hurdles:

1. Financial Sustainability & Risk Management: Leaders need better tools and bandwidth to proactively plan.
   
2. Accurate & Timely Financial Reporting: Multiple funding sources and reporting requirements cause complexity.
   
3. Audit Readiness & Regulatory Compliance: Ongoing prep is needed year-round, not just during audit season.
   
4. Scaling Finance as Organizations Grow: Systems and processes often fail to keep up with rapid changes.
   
5. Consistent Financial Processes: High staff turnover or remote setups can lead to inconsistent record-keeping.
   
6. Low Operating Reserves: Many nonprofits run with limited or nonexistent reserves, leaving no margin for error.

“Many leaders are actively trying to assess their financial sustainability and manage risk, but often without the tools or bandwidth to do it in a proactive way,” observed Perumal.

Hiring and Turnover in Finance

High turnover in finance roles disrupts operations, causing knowledge loss and delays. According to the survey, only 28% of respondents reported that turnover in the finance function was “rare,” whereas the majority deal with frequent or occasional staffing gaps.

Key Takeaways

• Frequent Turnover: 72% of organizations noted occasional, frequent, or very frequent staff turnover in finance roles.
  
• Continuity Gaps: Finance staff turnover can lead to inconsistent reporting processes and institutional knowledge loss.
  
• Leadership Strain: Executive directors and CEOs often step in to fill finance roles during vacancies, detracting from strategic tasks.
  
• Compliance Risks: Delays in audit preparation and compliance efforts become more likely when teams are short-staffed.

Systemic Issues in Nonprofit Finance

While turnover is a major concern, the survey data reveals deeper underlying challenges, ranging from lengthy monthly closes to frequent budget reforecasts, that suggest process or infrastructure gaps.

“It’s not just a hiring challenge… these challenges reflect something more foundational—nonprofits need more scalable, strategic finance operations.”

Key Findings

1. Longer Month-End Closings: An average of 19 days to close the books, with some organizations taking 30+ days.
   
2. Frequent Cash Flow Problems: 74% of leaders experience cash flow issues, underscoring the need for stronger financial planning.
   
3. Budget Reforecasts: Over half of organizations reforecast frequently, highlighting the difficulty in maintaining stable financial projections.

“An average of 19 days to close the books isn’t just a staffing lag—it’s a sign that processes and systems may not be fully optimized or resilient.”

Outsourcing Finance: A Growing Solution

Although 100% of surveyed nonprofits outsource at least one function (e.g., IT, legal), only 30% currently outsource finance – despite the many benefits a specialized finance partner can provide.

Outsourced Finance Benefits

• Strategic Expertise: Access to professionals skilled in FP&A, grants management, and compliance.
  
• Reduced Burden on Leadership: Leaders can refocus on mission-driven activities.
  
• Systems Optimization: Finance partners often streamline or provide their own financial tools and technologies.
  
• Scalability: Partners can help organizations effectively manage growth or navigate sudden funding cuts.

“Working with a strategic finance partner, if it’s done right, delivers the structure, visibility, and capacity nonprofits need… without burning out their teams.”

Top Reasons Nonprofits Use Finance Partners

Among the organizations currently working with a third-party finance partner, the survey responses highlighted the most common motivations:

1. Leadership Focus: More time for executives to handle mission-driven work.
   
2. Streamlined Processes: Partners help establish consistent, effective accounting workflows.
   
3. Timely & Accurate Reporting: Critical for compliance, audit prep, and strategic decision-making.
   
4. Specialized Expertise: Access to experts in grants, audits, revenue recognition, and more.
   
5. Cost Savings: Outsourcing can reduce overall finance function expenses (including systems and staffing).

“One of the biggest reasons is more time for leadership to focus on mission-driven activities… It’s really not just about the numbers.”

BTQ’s Finance as a Service (FaaS) Model

BTQ specializes in providing comprehensive Finance as a Service (FaaS) tailored for nonprofits. 

The comprehensive approach extends beyond typical accounting support, providing strategic insights and continuous operational improvement.

Their support spans from day-to-day transactions and reporting to strategic analysis, grants management, and even medical billing.

• Customizable Support Models: Full-service finance or stand-alone options
  
• Core Service Areas: Day-to-day accounting and transaction support, strategic CFO-level guidance, grants and contracts management, and medical billing (revenue cycle management).
  
• Long-Term Partnerships: 86% of BTQ clients have been with the firm for 5 years or more.
  
• Proactive Finance: Emphasizes forward-looking strategy and risk mitigation.
  
• Scalable Solutions: Clients range from $1 million to $200 million in annual budgets.

As Perumal says, “BTQ’s motto is: it’s your mission to create a better world, and ours is to help.”

Key Takeaways for Nonprofit Leaders

Nonprofits must address systemic challenges, both operational and staffing-related, to remain resilient. 

Reflecting on the broader themes, these core insights capture the essence of the challenges and opportunities identified:

1. More Than a Hiring Issue: Financial struggles often point to deeper process and infrastructure gaps that require a strategic solution.
   
2. Partnerships Provide Stability: A trusted finance partner can bring stability, expertise, and structure, freeing leadership to focus on mission.
   
3. Readiness for Growth or Change: Building scalable processes ensures nonprofits are prepared for funding fluctuations and expansion.
   
4. Added Value of Specialized Teams: Fractional CFOs and dedicated finance experts can bolster compliance, audits, and strategic planning.
   
5. Underused Outsourcing: Despite outsourcing in IT or legal, many nonprofits still overlook finance outsourcing—even though it can significantly boost organizational capacity.

“Now more than ever, nonprofits really need a strong financial and accounting partner in their corner… people that understand the landscape and can help build flexibility and planning.”

When Should You Consider Bringing in a Finance Partner?

For nonprofits unsure about outsourcing and the ideal timing for bringing in a finance partner, many of BTQ’s clients “come to us at a critical inflection point—when they experience issues with cash flow, internal crises, or leadership changes.”

If your organization struggles with timely closes, ever-changing compliance rules, or staff turnover, consider exploring a finance partnership with BTQ. 

We have tailored and scalable solutions to help strengthen operational efficiency and mitigate risk, so you can focus on what truly matters: advancing the mission and serving your communities.