10 Essential Questions to Ask a CFO or Financial Consultant Before Working Together

Hiring a CFO or a financial consultant is one of the most important decisions you’ll make for your nonprofit’s long term financial health.

Whether you need ongoing support or immediate strategic guidance, asking the right questions ensures you’re getting the expertise and leadership you need. 

Here are 10 essential questions to ask before partnering with a nonprofit financial expert. I hope these questions help you make an informed choice and secure the financial future of your nonprofit.

1. What Experience Do You Have Working with Nonprofits?

One of the first questions to ask is about their experience with nonprofit organizations. Nonprofits have unique financial needs, such as grant reporting, compliance, and restricted funds, so it’s important to have someone who understands these complexities.

2. How Do You Approach Financial Planning for Nonprofits?

Financial planning in a nonprofit setting is different from the for-profit world. Ask your potential partner how they handle budgeting, forecasting, and strategic financial planning for nonprofit organizations. A strong consultant should be able to help you plan for both short-term goals and long-term sustainability.

3. Can You Help with Fundraising and Cash Flow Management?

Nonprofits often rely on donations, grants, and other revenue streams that require careful tracking. Ask how they would assist in managing these funds, ensuring transparency, and maintaining healthy cash flow.

4. What Are Your Strategies for Financial Reporting and Transparency?

Transparency is key for nonprofits, especially when it comes to financial reporting. Questions to ask include their approach to creating clear, accurate financial statements that can be shared with stakeholders, donors, and board members.

5. Do You Have Experience with Grant Compliance and Reporting?

If your nonprofit receives grants, ensure your consultant understands the complexities of grant reporting and compliance. Ask them about their experience in tracking expenses and meeting the requirements of various funding sources.

6. What Is Your Approach to Risk Management?

A great strategic partner will help you identify financial risks and implement strategies to minimize them. Ask about their approach to risk management and how they would help your nonprofit navigate potential financial challenges.

7. How Do You Plan for Nonprofit Sustainability?

Ask how they would help ensure your nonprofit remains financially stable in the long term. This includes diversifying income streams, creating financial reserves, and planning for growth.

8. What Is Your Experience with Financial Software and Tools?

The right consultant should be comfortable with the financial tools your nonprofit uses or be able to recommend suitable options. Ask about their experience with nonprofit accounting software like QuickBooks for Nonprofits, Xero, or specialized tools for grant management.

9. How Do You Align Financial Strategies with Organizational Goals?

Every nonprofit has a mission, and your consultant should understand how to align financial decisions with those overarching goals. Questions to ask a CFO or a consultant should include how they plan to support your mission through sound financial strategies.

10. How Will You Communicate with the Board and Leadership Team?

Clear communication is essential for every partnership. Ask how if they will be providing regular updates, explaining financial concepts to non-financial team members, and offering strategic recommendations.

11. How Do You Incorporate Equity & Inclusion in Financial Strategy?

It’s essential to find a financial consultant who understands and aligns with your team’s impact-driven values.

Be sure to ask potential consultants:

• How have you worked with nonprofits prioritizing racial and economic equity?
  

• How do you ensure financial strategies support equitable funding and resource distribution?
  

• What’s your approach to ethical financial leadership in historically underserved communities?
  

A financial expert who truly aligns with your power building mission will actively consider diversity, inclusion, and financial accessibility when crafting financial strategies.

Conclusion:

Choosing the right consultant for your nonprofit is a critical step in securing your organization’s financial legacy. 

By asking these questions, you’ll be better prepared to find someone who not only understands nonprofit financial management but also shares your vision for growth and sustainability.

Need help defining your nonprofit’s financial leadership needs? Let’s chat! Book a free call to determine your next step.