As executives with oversight of a nonprofit's finances, nonprofit chief financial officers, or CFOs, receive increased attention in today's heightened scrutiny of how organizations handle money, particularly money intended for the common good. Although all CFOs have responsibility for a nonprofit's accounting and finances -- ensuring procedures adhere to legal and ethical standards, CFO roles vary among organizations depending on factors such as the nonprofit's size and budget.
Nonprofit CFO salaries also vary greatly based on the nonprofit's location and size of its budget. In her column on nonprofit salary at the CNNMoney website, Anne Fisher notes that, according to the 2011-2012 National Nonprofit Wage & Benefits Report, from Opportunity Knocks, in cities such where the cost of living is high and nonprofits must offer top dollar to attract the best employees, the average nonprofit CFO annual salary is $113,546. However, CFOs working in large nonprofits with $10 million or more in annual revenues in those same cities might receive approximately $236,000 annually.
At the lower end of the pay scale, in smaller cities, like Indianapolis, Indiana, or Albuquerque, New Mexico, a CFO at a nonprofit with $1 million in annual revenues averages $68,000 annually. Many nonprofits with annual budgets of less than $1.5 million can't afford or don’t require a CFO to handle their finances, according to Bridgestar.
By Organization Type
In 2007, nationwide, in religious organizations with annual revenues between $500,000 and $1 million, the top finance staffer -- though not necessarily holding the title of CFO -- earned an average annual salary of $46,867, according to the 2009 GuideStar Compensation Report.
The report also found that in organizations with annual revenues between $1 million and $5 million, the top financial staffer in education-related nonprofits made an average of $74,852 annually; in human-services nonprofits, the position paid $88,909.
In organizations with annual revenues of more than $5 million, top financial staffers at education-related nonprofits earned an average of $139,535 annually; those in general health and rehabilitative nonprofits, $203,947; and those and in human services nonprofits, $102,493.
In 2006, the median salary of chief financial officers at charitable family and independent foundations was $143,934, according to the Council on Foundations.
Although salaries for nonprofit executives are increasing to attract top talent to the nonprofit sector, in her CNNMoney column, Anne Fisher points out that there is a limit to how much a nonprofit can offer. As tax-exempt organizations, a nonprofit can be fined or even lose its tax-exempt status if the Internal Revenue Service finds that it has excessively compensated its executives. The nonprofit's board members, who determine executive pay, can also be liable for penalties.
People interested in becoming a nonprofit CFO should have a degree in accounting or an MBA, and they also can be a certified public accountant. According to Bridgestar, other characteristics of an ideal nonprofit CFO include being knowledgeable, detailed and precise; having the ability to educate the organization's top leader and program staff about its finances, keeping the leader engaged and staff accountable; having passion for the nonprofit's mission; having the ability to work across the nonprofit's departments and people; and having an understanding of nonprofits, budget models and contracts.