The Crucial Role of Change Management for CFOs: Driving Sustainable Success in Nonprofit Finance

Though many nonprofit professionals are familiar with the term “change management,” few understand everything it involves. Finance departments and CFOs often focus on project management—which is the technical side of change—making sure all the boxes are checked, and everyone moves along the Gantt chart in an orderly fashion.  

But change management must also include the people side of change. Good change management processes help employees embrace and champion these transitions and help facilitate higher adoption rates to improve long-term change efficiency.

When there is a transition in leadership or a switch to new fund accounting software, change can be slow and create anxiety among your team. With the right tools and approaches to change management, you can reduce the anxiety that can come with innovation and increase the success rate of your projects.   

Here are four ways leveraging change management strategies can help you build a sustainable transformation for your nonprofit finance team.

1. Creating a Strategic Vision  

A successful change management approach should start with developing a long-term strategic vision. This vision is especially essential for nonprofit organizations operating with limited resources. This vision serves as the linchpin, aligning the nonprofit’s mission with the day-to-day operations that sustain it. It’s a means to unify everyone around the nonprofit’s purpose and its plans for achieving its mission today, tomorrow, and in the years to come.   

Before jumping into any actual changes, you need to take the time to develop a desired future state of the organization. Your future state will explain the “why” behind all the changes going forward. If your team is aware of and aligned with the desired future state and strategic mission of the organization, it’s much easier for them to understand the necessary changes to achieve that desired future state.   

2. Adopting New Technologies  

You’ve likely heard the term “digital transformation” dozens of times, especially in the past few years. Organizations that were fully in person and relying on manual processes before the pandemic suddenly had to pivot into new systems, often in a matter of days or weeks, to accommodate remote work. These systems were often set up piecemeal, and many nonprofits just grabbed onto the first system they saw. Organizations simply didn’t have the time to perform due diligence for system selection.   

And now, four years later, those systems aren’t working anymore. In most cases, the current systems are inefficient or have caused employees to build out workarounds to fit their needs. In the worst cases, companies are hardly using the systems they’re paying for. This is a great time to employ change management strategies to envision a future system that is informed by staff and organizational needs, and then create a roadmap to get there.   

3. Improving the Employee Experience  

One of the most pressing concerns for nonprofits is avoiding burnout and attracting and retaining employees. This is a golden opportunity for nonprofits to develop long-term people strategies that meet the needs of a changing workforce.  

Nonprofits are rarely going to be able to provide compensation that matches their for-profit counterparts. But with a well-developed people strategy, nonprofits can provide flexible and remote work arrangements, strong benefit packages, and a sense of purpose that you can leverage to attract talented individuals. However, pivoting people strategies is an organization-wide lift that involves input from various stakeholder groups. It can be made significantly easier and more effective with the help of change management.   

4. Reducing Costs  

It’s not uncommon for nonprofits to implement organizational changes that promise to lower costs. Take a new fund accounting system, for example. It can promise all the automation and efficiencies under the sun, but if the staff aren’t willing to change, it’s likely your costs will stay the same, or even increase as you’re paying for a system that isn’t being used.   

Change management focuses on people, helping nonprofits streamline projects, reduce turnover, create an agile workforce, and approach change positively, all contributing to reduced costs within the organization. Nonprofits that build change management capacity or utilize change management services will get to their desired future state while reducing costs along the way.   

Setting the Foundation for Growth with Change Management

While change can be scary for nonprofits (and any organization for that matter) change management practices can help to align strategic objectives with internal transformations, increasing project success and adoption rates. Investing in and building change management capabilities within your organization can create a positive internal and external reputation for your nonprofit and position it to continue to fulfill its mission now and into the future.   

Looking to lead your finance team through a transition? Check out the webinar, How to Be a Nonprofit CFO Who Takes Your Org from Tech Laggards to Tech Leaders. It’s part of the Ultimate Nonprofit CFO Series: How-tos and Upskilling for the Modern Nonprofit CFO.  

This blog post was co-authored by Megan Bierwirth with Forvis Mazars.