Multiple Revenue Streams Challenge Finance Officers, Study Finds

Title: 2016 Nonprofit Finance Study

Organization: Abila

Summary: Nonprofits generate revenue from at least nine types of sources — and 31 percent of nonprofit finance professionals find managing those streams the biggest challenge they face on the job, according to a new survey by Abila, a company that provides financial software for nonprofits. Other top challenges include managing the budget (24 percent) and dealing with sudden job vacancies in the finance department (18 percent).

The study results were derived from an online survey of more than 400 nonprofit finance officials.

Among the findings:

• According to respondents’ responses about their organizations’ revenue streams, on average 26 percent of income comes from services, 21 percent from government grants, 12 percent from foundations, 12 percent from individual gifts, 7 percent from private donors, 7 percent from “other sources,” 5 percent from major events, 5 percent from companies, 3 percent from retail operations, and 2 percent from endowments.
• Only 34 percent of respondents said they fully understand the recent changes in accounting standard announced by the Financial Accounting Standards Board.
• 62 percent said the cost of compliance has increased over the past three years.
• 64 percent said their nonprofit has one annual audit; 36 percent have multiple audits a year.
• 46 percent said they would be unprepared if a key finance employee left the organization suddenly.
• 21 percent of respondents did not receive formal training in finance and accounting; 73 percent are not certified public accountants.
• 13 percent of respondents shifted into a finance job after initially being hired for a different position. Of those, 57 percent did not receive formal training in finance and accounting.