Five Considerations in Hiring an Accountant for a Nonprofit Organization

Hiring an accountant for your nonprofit organization is different from hiring one for a traditional, for-profit business. Nonprofit accounting has many nuances, and you will need someone who understands the mission-driven challenges surrounding donors, resources and sustainability. Look for the following five considerations in hiring an accountant for a nonprofit organization.

1. Passionate

Everyone on your team should be passionate about the organization’s cause and mission. When people are inspired by the work they are doing, they are more likely to work harder for you. No matter their role, everyone’s goal should align with that of the organization. All organization decisions must be viewed through the lens of accomplishing the organization’s mission.

2. Understands Fund Accounting

It is important for your candidates to understand fund accounting, which is different from traditional accounting. With a focus on accountability rather than profitability, a nonprofit accountant needs to be aware that the organization’s stakeholders are concerned with proper utilization and allocation of funds rather than a bottom line.

3. Understands Nonprofit Reporting and Compliance

Nonprofit organizations are exempt from federal income taxes, which means that they face more scrutiny and reporting requirements than for-profit organizations do. Your accountant will need to be familiar with the various reporting and compliance requirements, such as Form 990, Michigan License to Solicit, payroll taxes, sales tax, audits, etc. Also, many nonprofit organizations are grant recipients and must report to grantors. Your candidates should have a base knowledge of those reporting and compliance areas that affect the organization. When you interview candidates, be sure to ask technical questions that will show the depth of their understanding and experience.

4. Resourceful

For many nonprofit organizations, funds can be tight. Look for a candidate who is resourceful and excels at solving problems. These types of candidates typically enjoy a challenge and will look for new ways to resolve issues and overcome barriers the organization may be facing. Sustainability and cash flow are of utmost importance for most nonprofits in their drive to accomplish their mission, and your accountant should share in the quest for efficiency, quality, and continuous improvement.

5. Strong Communication Skills

Your candidates should be strong communicators.  When it comes time to relay accounting information, they will need to be able to discuss the financial information and reporting with people who may not understand nonprofit accounting. Having strong communication skills will help the candidates do this efficiently and effectively.

It may take extra time to recruit strong candidates. Look for someone who has these strengths along with other experiences and skills to help support your organization’s goals. Hiring the right person can help your organization’s ability to grow and thrive for years to come.

Learn more about the services Yeo & Yeo provides for nonprofits.