Six Challenges Nonprofit Executives Are Facing

By Steven N. Kutsuflakis, CPA

Nonprofits have made headlines concerning challenges brought on by new federal rules on overtime pay, deferred compensation and new accounting standards for charities. Keeping up compliance with the various finance-related rules and regulations that govern the sector proves to be a challenge for nonprofits. To better understand what is keeping nonprofit executives up at night, Abila – a leading software provider to nonprofit organizations – surveyed 414 finance professionals who recently worked for a nonprofit or association. Key findings from the study reveal the primary challenges nonprofit executives are facing.

1.Managing Revenue

Survey participants identified managing multiple sources of revenue as the biggest financial challenge they face as finance professionals. Each source of income has complex rules and restrictions to be taken into consideration.


Nonprofit finance professionals have identified compliance as a significant burden that has become costlier over time, especially within the past two to three years. The study found that one of every four finance professionals is spending over 120 hours per year on compliance. Half of those surveyed believe if their organization grows, compliance difficulty and costs also will grow.

3.New rules and regulations

Finance professionals often support the introduction of new rules and regulations; however, they still worry what the effect will be on their organization. New rules and regulations often mean increased costs for nonprofit organizations. According to the survey, only one in five believes regulations do more good than harm.

4.Staff Turnover

The unexpected departure of an employee can significantly disrupt day-to-day operations. Forty-six percent of survey participants responded that they are unprepared if a key finance professional were to leave suddenly. Only 12 percent are confident they could survive a sudden departure in the finance department.


Organizations recognize fraud as a threat and have put significant effort into fraud prevention. Despite implementing practices, such as separating duties, only 38 percent of survey participants feel that members of their management and board of directors are very educated on how to avoid fraud.


According to the survey, 36 percent of finance professionals claim they experience more than one audit per year. With the typical preparation time exceeding two weeks, audits can be problematic for organizations that lose a significant amount of time – time that could be better spent deterring fraud or preparing for staff turnover.

We recognize it can be difficult to keep up a progressive pace when the rules and regulations are constantly changing. The professionals in our office can help you with the challenges your organization faces. We are often called upon when an organization loses one of its financial professionals to assist while they fill the void. We can also help ease the complexity that keeps you up at night. The professionals in our office are keeping a close watch on issues that affect nonprofits and are available to speak with you should you have concerns. For more information, contact:

Stephen N. Kutsuflakis, CPA