As a CFO, I believe that two of the biggest risks to non-profits in 2022 are the impacts on your business from pandemic-related government policies, and the challenge of attracting and retaining employees. To overcome these challenges, it’s key to understand how to maneuver your organization to take advantage of what’s happening in the marketplace, while still serving at your best. Watch today’s Monday Money Moments video for more (and skim the transcript below).
Dana Miller (00:00): Welcome to Monday Money Moments with myself, your host, Dana Miller from Executive Financial Insights.
(00:08): As a CFO, it is my job to keep you informed of the top risks I’ve come across for 2022. There’s really just a couple, but they’re a big deal. The first is impact on your business from pandemic related government policies. And as you know, those continue to change almost on a weekly basis. So it’s a little tough to address them all now to make them relevant for you. So I will pass on that at the moment.
(00:48): I will move on to the biggest challenge that most CFOs are facing in all organizations, both for profit and not for profit. And that’s the challenge of attracting and retaining employees. That’s even higher than internal control risks. Can you believe it? It’s even higher than internal risks to the organization.
(01:12): One thing that has come out of this pandemic is that there is a hybrid work model, and this hybrid work model is continuing, even though some pandemic restrictions are being lifted. Now with Omicron, they’re also being put back into place, right? So it’s again, fluid. But one thing we’re finding is that people do want to work in the office. They just want a little more flexibility with that. If your organization has the ability to maintain that flexibility long term, your organization will be better positioned to recruit new employees.
(01:55): Another thought or concern of CFOs right now is the high inflation that is happening. We are seeing the highest inflation that we’ve seen in decades. And for this year, for 2022, that’s driving a 3.9% wage increase. So if you haven’t already set your budget, or if you set your budget and you haven’t included a pretty healthy wage increase for your staff, you may want to rethink where you’re allocating your dollars. Again, to maintain competitiveness and to minimize and mitigate risk to the organization.
(02:41): We’ll say CFOs are becoming a little more bearish, meaning they’re pulling back a little bit, they’re tightening their outlook on forecasts for the foreseeable future because of inflation, the labor shortages, and the supply chain shortages, which are impacting all industries right now.
(03:05): Now note revenues (it’s really interesting at the same time as all this doom and gloom is happening), revenues are increasing and resources for those revenues are also increasing. So it’s a bit of a mixed bag. You want to look around and say, all right, if that’s happening, but not happening in my organization, where can we pivot? What can we do to help maneuver our organization to take advantage of what’s happening in the marketplace and still serve those that we serve best. Take a look at your donor cultivation. Where are they being utilized to the fullest?
(03:48): Think about the economy; what’s happening in the economy. Also note that changes in tax laws may be coming that may impact your organization. For example, even though the tax rules have changed, that deductions are generally no longer available for non-itemizers, Congress did put in a $600 deduction for those who do cash donations. So, you know, what other things do you see coming down the road?
(04:22): Definitely involve your board in what’s going on. Utilize their expertise. That’s why they’re here for you. They’re bringing the outside world into your organization. Use them to help you navigate and mitigate as much as you can, any threats or risks to your organization, and then utilize myself and all the resources and training that I may be able to offer for you from a financial perspective to help you stay nimble, productive, and effective. Thank you. And we’ll see you next week. Visit me at www.executivefinancialinsights.com. Thank you.
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