Nonprofit Finance Isn’t as Simple as You Think, with Stephen Newland

TRANSCRIPT

Wassia Kamon: Welcome back to the Diary of the CFO podcast, the space where you always find real world insight to become a better leader and be better at life. I'm your host, Wasiya Kamon, and today I'm so delighted to have with me, Steven Newland, over the past 15 years. Stephen has worked in finance roles in a variety of organizations, including nonprofits, startups, early stage companies, and Fortune 500.

Most recently, he has ventured out on his own to create MoneyPath, a fractional CFO company focused on helping nonprofits and social entrepreneurs. He believes in making finance simple and actionable so these organizations can use the financial insight to drive their mission forward. What an amazing mission.

Thank you so much for being on the show, Steven.

Stephen Newland: Thank you so much. I'm excited to be here. I have followed you for a while and I'm just excited to talk today.

Wassia Kamon: Awesome. So before we dive in, will you please share about your career journey? What has been some inspected, maybe twist and turn and how you now be owner and founder of MoneyPath?

Stephen Newland: Yeah, I'll try to do it quick, relatively quick. I'll kind of incorporate some twists and turns one. I came out of school, I went to school in Cincinnati and I got an internship with Delta Airlines in Atlanta at the time and got a job there at a school. And I could not wait to get to a big city, like a bigger city.

And like I did that and I came out in finance, corporate finance there. And I said, all right, I'm going to climb the ladder. Like that was my career goal. I'm going to climb the ladder. I'm going to go up the corporate ring and that's what I'm going to do. And I did that for a few years. And I quickly realized like, maybe that sounded better in my head.

Then reality along that time, I had been paying off all my student loans and so I paid off about 000 and over four years that like lit a passion in me of I want to help other people, you know, I have these skills and finance and budgeting and like understanding numbers and doing, you know, doing analysis.

Like I want to use that and help people. I want to, I want to help people do what I just did. Four years in was my first career twist and turn. I stepped away from what I thought was a pretty good career trajectory at Delta. I'd gotten two or three promotions over that four year span. And I went and worked at a large church here in Atlanta and ran their financial education program.

So I did that for about six years.

Wassia Kamon: Wow. You know, it's my church, North Pointe Church.

Stephen Newland: Oh, I don't think I knew that. No way. Yeah. So I, I worked at the Buckhead campus and then I, and then I also worked at the North Pointe campus too. I did not know that. That's awesome. So I did that. Yeah. I did that for six years and that was really, really loved that experience.

But there was also something there, which is leading to the next Swiss intern. I really miss that business. I miss the business world. There was just something in me. I'm like, man, I just miss that. A business strategy that I just missed it. And so I went and helped a startup raise a million dollars that was focused on helping people pay off debt and save money.

So it was kind of like a cool combination of helping people in that aspect. And then also the business world. Did that worked at a couple of startups for a couple of years and then eventually worked at a fractional CFO firm that was helping startups. And then about about a year ago, I just had this gnawing thing that it wasn't businesses that I, that I really wanted to help.

It was growing organizations that were out there doing some kind of mission in the world, helping people in some way. And so that's where I said, let me go do this. Let me build a business focused on helping nonprofits and. Social entrepreneurs who are building organizations that are just driving some sort of mission forward.

Wassia Kamon: That's awesome. Now that you make the switch, and I want us to dive a little deeper here on your transition from for profit to nonprofit, because I made that transition about two years ago and there were things that I thought would be easier that were like, Hmm. And so I want to know like, what, what, what took you by surprise in that transition?

What were some of the things? I think the

Stephen Newland: first thing is just interacting with the people. And I guess this could be different at varying organizations, but in the nonprofits I've worked with, this has been pretty true is people are, they tend to be a little bit more like, Hey, let's just catch up. There's a little bit of a slower pace, not necessarily in a bad way.

But it's, you don't have that corporate pressure of we gotta hit, we gotta go, we gotta hit this thing, we gotta hit this deadline, we got a board or, uh, the stock market or whatever to worry about. Like that doesn't exist. And so there's more of a focus on people and helping. And so that tends to be a little bit of a slower approach with, with people.

And so that was hard for me. I was very much like a go, go, go, like, let's get it done. That was one.

Wassia Kamon: For me, another one was the compliance and regulations, the restricted and restricting revenues, conditional and conditional. How did you deal with this part? Cause I don't tell you that you come in, you're like, Oh, everybody's mission driven, their passion, like you said, things may take some time, but you're working with people that are so passionate about what they do, but then when you're on the finance and accounting side, you have to deal with the other stuff.

Stephen Newland: 100%. And there's also in the nonprofit world, I'm speaking mainly in Georgia. You have to get a financial review at 500, 000 in revenue. You have to do an audit at a million dollars in revenue. A startup can go a long time without having to worry about any of that stuff. Until an investor says, Hey, I need you to do this, but that might not be until five or 10 million of revenue.

And so you've got more money to play with there. So to your point, you just kind of, I just kind of had to learn on the go. Okay. There's all these different things about, yeah, like you said, restricted, not unrestricted funds and like making sure those stay very separate and you've got good systems in place for that.

I just kind of flew the plane as it was in the sky and just learned it on the go, just like any other.

Wassia Kamon: Yeah. That's impressive because to me the learning curve was quite steep, even though I was a CPA. So thinking about you coming from FP& A standpoint, what really helped you make that transition? Because it's not just a different business model.

You're dealing with different type of accounting and you have to predict and you have to forecast. And what does it mean in terms of FP& A making that switch from for profit to non profits?

Stephen Newland: You know, I try to incorporate a lot of the same principles that I learned. I have found that in the nonprofit world, there tends to be not as much of a focus on cashflow forecasting for whatever reason.

It tends to be just kind of living from one fundraising cycle to the next. And like, Hey, we've got this next big event. Like I've tried to really incorporate some of those best practices from the business world and FPNA and say, Hey, the best businesses out there, the best organizations, they're looking six.

Nine, 12 months into the future and they understand that if I go hire this person now, what is that going to do to my cash in 12 months? And so I've tried to incorporate a lot of those principles into the work I do. I actually did an interviews with, I think it was 10 nonprofit leaders around Atlanta, all about a million dollars in hire and the organizations.

And I believe it was two or three had mentioned they have some type of a forecast in place. And that blew me away, it completely blew me away that few organizations had a process in place.

Wassia Kamon: Yes, and I'm not too surprised though, because when you think about like ERP system, accounting system, there's not a lot I should say that are geared toward, not for profit.

It's manufacturing SaaS at best, but then I feel like we are kind of underserved when it comes to software and things like that. So how have you in your role helped guide the clients you've been working with?

Stephen Newland: It's a great question. I think it's getting better, but I agree. It is definitely under underserved.

I think A good example, like QuickBooks, they've got like a little bit of a separate version for nonprofit, but there's still some aspects of it that just completely don't work for nonprofit. And so what we've had to do is you just have to take it and, you know, if you have to do another step in Excel, sometimes that's just what we have to do.

So there are like more manual steps involved, but that's the only way there's, yeah, we've just had to find, you know, more manual workarounds, but,

Wassia Kamon: but you're doing it, you're doing it.

Stephen Newland: That's exactly right. I will say there's a lot of really good CRMs in the nonprofit space, but I think there's definitely work to catch up on the accounting side.

It's actually why I started, part of why I started my business is I had kind of seen some of the messaging that, um, some fractional CFO firms had towards nonprofits. And it was generally like, Here's who we serve. We serve startups and small businesses. And Oh, by the way, we can also help nonprofits too.

It was kind of just a, yeah, we can help you too. And I thought, man, they deserve better that these are great organizations doing amazing work. Like they deserve someone who is understands their organizations and can put this expertise to work in their organizations.

Wassia Kamon: That's amazing. Yes. I feel that we are underserved and I also feel like we don't always have the right talent.

It's hard to attract people. Like I have positions open that I want to feel, but then I speak with other CFO that I, yeah, we need help too. How do you see that change or what do you think we can do as an industry to attract more people in terms of finance and accounting?

Stephen Newland: Yeah, it's a great question. I think there's two things that have come to mind.

I think what's interesting about, I'm kind of on the tail end or the high, like the high end of the millennials. It seems like some of the Gen Z and even younger millennials, they are starting to take a broader look at work as a whole and say, and say, does this align with what I want to do? Does this align with my values, my beliefs, my versus just, you know, how much money can I make?

I think that's very interesting. I think over time now the money's got to be there or else people will, you know, the economics have to work out at the end of the day. But I think that is interesting. I think that may start to creep a few more people who are willing to say, you know what, I'm willing to take a little bit less money and I'm willing to go work at an organization that kind of more aligns with what I, you know, what I want to do in this world.

There's also been a very interesting movement. There's a documentary that just came out. I think it's called Uncharitable. Don't quote me on that. I think it's called uncharitable. Basically, he's saying, hey, as nonprofits, what can we do to start to bubble up the fact that nonprofit staff are typically underpaid versus market?

And one of the things that, you know, we've seen that has worked well is just. donors. Hey, I need to pay my staff better because I need to keep them. They're leaving or they're getting burned out. And if they do that, we can't sustain our mission. And if you truly, truly as a donor believe in this mission and we can pay our staff 10 or 20 percent more to get them aligned with market, we're going to keep them around and we're going to have a fantastic mission for the ongoing future.

And so I think maybe nonprofits have just been nervous to communicate that directly to donors. But Hey, if they're truly bought in, they should be fine with that.

Wassia Kamon: Very true. And so I like what you said about what things align with my vision, my passion and, and the work that I do. So at ACE, for example, access to capital for entrepreneurs, we help underserved.

Communities, entrepreneurs. So those that may not necessarily get a loan to a Wells Fargo or a Bank of America, the big ones, because maybe it's the first time they're the first in the family, we can step in and help them with their business. So I was curious on, on your end, why don't you showcase or broadcast some of the great nonprofits that you've come into contact with some of your clients or some people that.

You came into contact as you were growing your practice.

Stephen Newland: Yeah, you mean just give them a shout out? Yes, please. So a couple that I'll, I'll talk about. One doesn't exist anymore. And I was part of it. I was actually part of kind of shutting it down, but it did really, really good work. So I want to call it out.

It's, uh, it's called Fallen Sparrow and we help support children's homes in Cambodia. Cambodia has got a really deep history of kids not being able to be supported by families. And so that was some really impactful work. Another one is Buckhead Christian Ministry. I was on their board and was their treasurer for a number of years, for about a year as their treasurer.

They helped step in when someone's getting evicted or someone's just like, Hey, I lost my job and I don't have clothes to go interview for a new job or. I don't have a dress for the, for the prom. They step in and fill the gaps for a lot of people. They do incredible work all around Georgia. The one I really love working with now is Atlanta Angels.

They are focused on supporting the foster care community around Atlanta. They step in and help families that have foster children and, and also have a mentoring program for youth in foster care.

Wassia Kamon: I love hearing it because it's amazing because when you think about it, the government is not going to do it for you.

Like some of these niche needs that are happening or a big apple, for example, you know, but they can donate, people can also help in the mission, which is so transformative for me, at least as an individual being in finance and accounting and knowing that I'm working for. Mission driven organization. I also volunteer with Hope.

I think I told you about them. And we help low income single parents complete an education degree so they can go from working or needing food stamp to owning a home because now they're a nurse. They graduated. So it's amazing. It's impactful, but it doesn't mean that the accounting and the finance of it is easy.

Stephen Newland: I often say it's harder. I think it's harder than profit, like for profit companies. It's just more complicated. I mean, if you think like some, a lot of for profit companies, not all of them are using the classes, like for example, in QuickBooks. And for a nonprofit, you have to track not only your department spending, but you have to look at how is that being allocated across your administrative functions, your fundraising functions, and how much is going to services.

It's just another wrinkle into the,

Wassia Kamon: I agree. I do think it's more difficult. Cause I remember when I started at Lyft in the not for profit space, I heard about, you know, we have this audits. If you get money from the federal government, you have to do a single audit. And I was joking at, it reminds me of Beyonce, all the single audits, all the single audits.

Like you have to get a CIFA. I was like, CIFA, what is that? All these different terms that I wasn't ready. I wasn't ready.

Stephen Newland: Yeah. Yeah, exactly. I know a lot of startups that don't have anywhere near the financial controls in place because they don't have to have an audit so early. And especially even like a government audit, if you're taking, you know, government grants, like.

Wassia Kamon: Yes. It's a government grant. That's what gets you all the time. So what would you say is if you could rewind the clock and what would you tell your past self to be better prepared for what you're doing now?

Stephen Newland: So I was really obsessed with the technical skills early on in my career. You know, how do I do this Excel thing?

And I think that was good, but I think what I really wish I would have paid more attention to was, you know, after that fancy, pretty looking analysis that I was really proud of. And after I sent that off, I just kind of, okay, onto the next thing. I really wish I would have paid more attention to how my leaders took that information, processed it and use it to make decisions because.

I know now that's basically what, you know, as you get into any financial leadership role, that's your, that's what you do. I mean, you, how do I take this data or this piece of information and how do I use it to make better decisions for the organization? So I really wish I would have started paying attention to that more as I think I would have honed some of those skills a little bit faster.

Wassia Kamon: Can you give us more specific examples? So obviously it sounds like storytelling, like you, you took the financials. Storytelling will be one of them. What other ones would you specifically identify to you could have worked with sooner than later?

Stephen Newland: I was thinking about when I was at Delta. As an intern, I worked in the cargo, on the cargo team.

And so I would put these analysis together and it would say, you know, Hey, our volume for this product was lower. Here's some things we can do with pricing. Here's maybe a problem. Should we increase our price? Should we decrease our price? I just put together the analysis and said, Hey, our volume is lower for this product.

And these markets, and I just sent it off to my, to the leaders. I never followed up with them and said, well, Hey, what decision? So you took that information, but like, how did you process that? Like, did you, did you compare that analysis? Did you take that quantitative analysis and did you pair it up with maybe this other piece of information that you got from this other report or this conversation you have with this leader, or did you make this decision just off this data?

Like, that's one example of like, I wish I would have understood their decision making process.

Wassia Kamon: Yes, because that's really what leadership is making decisions. It's really all leaders. So you're in meetings all day and really what people expect from you is decide how would you go here versus there. And that's when you have to be strategic.

You have to be able to lead people to do certain things, even when you don't have the title necessarily. So it is a lot of things. And I've noticed too in my career that I was too on. Technical, technical, technical for me was having letters behind my name. So now I have more letters behind my name than in my name itself.

But again, I still felt somehow stuck in my career. And that's why I love your content on LinkedIn. When you talk about all these other things. That I'm not just like you said, Excel, not just, Oh, I send this deck and it's cute. I know how to do PowerPoint. And so what do you think we need to do more of to raise that awareness in the next generation of leaders?

Stephen Newland: I think just being open and honest about like these conversations. And then, like you said, even on LinkedIn. So one thing I, if I look back on what I wish I would have done differently is not underestimating the power of my network early in my career. I could have easily like going back to that, that example of the analysis, I could have easily sat down with a boss, my boss at the time, or, or even a senior leader and said, Hey, can I just buy you a cup of coffee?

I just want to understand how you think about finance and how you think about decision making or how you think. Most good leaders out there would give you 15 minutes. No problem. There's something in you and you have experience. Everyone has this innate desire to want to pass something along behind you.

And so don't be afraid to ask if they say no. Okay. They say, no, they're going to respect you for asking them. To me, there's no downside. I don't see downside. And so be willing to just DM somebody. If you're like, they're too big of an account on LinkedIn, DM them. Just ask them. Don't be afraid to just ask.

Wassia Kamon: That's

Stephen Newland: mine.

Wassia Kamon: Oh, that's so good. It sounds very simple, but I think we self somehow limit ourselves. Right. So there's also the thing, the skills that you have outside. So the skills people can see good communication, Excel, but I feel like there's also internal things like self limiting beliefs or imposter syndrome.

Can you share a little bit more about, you probably went through this, you starting your own practice, you doing all these transitions, how are you navigating those types of things?

Stephen Newland: I would say I still have most probably daily there's imposter syndrome that keeps saying like, do I have what it takes? Can I really do this?

What if I don't have the right? What if I don't have all the answers for every financial question that they come up with? And it's just, I think I've just over time realized you're not going to have all the answers. And I don't think anybody at any stage of their career has all the answers. Even if people say they do, I promise.

I don't think anybody has all the answers. But for me, what I have learned in this area is. You don't need all the answers, but what you do need is I have this person I can reach out to if I need help on something, or if I need a little bit more clarity on, I'm not a tax expert by any means. If I got a tax question, it would be like, I could do some research on it and could understand it to some degree, but I also have someone that I can call and be like, Hey, I need help.

I, this is out of my element. That's really helped me to, to just to your point that. Self limiting belief of, I don't have all the answers prevented me from taking risks and starting something like this sooner. I just said, well, let me just surround myself with people who can help if I need it. And there you go.

Wassia Kamon: That's awesome. But then you think about networking, networking feels awkward. Okay. Let's be, let's be honest. It feels awkward, even on LinkedIn for me to send a connection request. I'm like shaking. Okay. I'm like, okay, I have, I have a whole Google docs of. Little blurbs that I can say in my connection requests.

And when I don't know what to say, I just hit connect and hope for the best. And I'm an extrovert. What are some tips you may have in terms of networking? Because again, you mentioned it a couple of times already. Networking, surrounding yourself with the right people, being able to ask those questions, ask leaders or big accounts on LinkedIn.

What are some tips you can share to ease it? I don't say it's going to be easy, but at least to get you somewhere.

Stephen Newland: It's a good question. I mean, I always just start with who are those people in my, in my circle that I, who are maybe a step ahead that I trust and that I know I can, they're not going to be bothered if I just ask them a question.

And so I would start with them and be like, Hey, do you have anybody that would be awesome to connect me with? And. Maybe take a step back. If I'm the person reaching out to connect. What is my intent to connect? What is that thing I want? What do I want to learn or what do I want to understand in connecting with somebody?

If you go to someone you trust who has maybe a step ahead of you and you say, Hey, I want to learn about how to make better decisions in finance. That person is going to be like, Oh yeah, no problem. Here's one person or here's two people. I'd love to connect you in, in that connection to that person.

They're going to say, Hey, they would love to talk about, they know you're an expert in this area. They would love to understand how you make decisions. To me, that makes it more natural. I think that's more of a natural way to do it.

Wassia Kamon: Yes, getting the introduction, yeah, being introduced rather than going cold turkey.

Stephen Newland: I would say another way is just even before you reach out, just follow for a while and just comment on posts and just understand what they talk about and what they're interested in. And then when you reach out, you can say, Hey, I noticed you talk about forecasting a lot. I'd really love to learn more. I know you're an expert in that field.

Could you help me? That also I think makes it a little, a little more natural.

Wassia Kamon: Oh, yeah. Oh, yeah. But then what about when you are in person events? Because I'm an extrovert. I know a lot of other people in finance accounting are introverts. So going to events or meetups could be a little awkward. Do you have any tips or anything to share there?

Stephen Newland: I do. And I just reached over to my, my bookshelf is right next to me and I grabbed, I don't know if this is going to show up backwards on camera or not, but this book is like how to win friends and influence people by Dale Carnegie. This book completely changed how I approach networking events. One of the things he talks about in there was people love to talk about themselves and not being the person in the conversation where you're thinking about how am I going to respond, but like listening to what is the other person saying and just be, just ask questions when you get the urge to talk about yourself, just ask another question about them and just the continuing to do that and that I think will make conversation a little bit more natural and it can be awkward.

Networking events are awkward for everybody. I'll admit it. I don't, I'm more of an extrovert and I, I still, I'm like walking into a room. I'm like, I don't really want to go in here, but I have like maybe two or three go to questions that I know are going to help me open up the conversation to then like dive a little deeper.

So I try to start with those.

Wassia Kamon: What are those questions?

Stephen Newland: Yeah. I mean, the first one, so I, I forget where I heard this. They just said, you know, why, why did you get into your current field? Is it something you're passionate about? Is it, was it a connection? And that can open up a ton of different, a ton of different things on the career side.

On the personal side, I always love to, to ask like, Oh, are you from Atlanta? Where are you from? Cause Atlanta naturally, a lot of people are from everywhere. So it's an easy, that's an easy one. And then, you know, Hey, how'd you hear about the event today? Yeah. Okay. So you kind of have three different things.

You have the first one is a career thing. It's how did you get into your current field? The second one is kind of a personal thing. Like, Oh, you know, I went to college at here. I went to, you know, now I'm in Atlanta. The third one is more of a, I'm looking for a mutual connection. So the third one is how did you hear about the event?

Oh, I know, uh, you know, so and so. Oh, I do too. That's interesting. And so you kind of have three different buckets of connection points. Yeah.

Wassia Kamon: Wow. I love your strategy. I'm definitely stealing that.

Stephen Newland: I appreciate it. I appreciate it. And if those don't work, just say, you know, how about this weather? This weather's good.

That's my like last, I'm like, when I'm really awkward, I go to, I start talking about the weather.

Wassia Kamon: Atlanta weather. We're both in Atlanta. So we know how during this week alone, we went from summer, winter, fall, winter. And now yesterday I went out in a onesie outside. Yes. I wore my onesie. My daughter wants a onesie and I'm like, yeah, I'm in a onesie at this age, but it felt good.

Stephen Newland: Hey, it was cold yesterday. I'm not gonna lie. It was way too cold for November.

Wassia Kamon: Yes. Yes. All right. So I have one last question for you, which is if you had to pass along one piece of wisdom to the next generation of finance leaders, what would it be?

Stephen Newland: I made this mistake way longer in my career than I wish I would have, but it is learn to make complicated things simple.

So if you're doing this big analysis. Put a summary page and boil it down to how can this leader understand this in 30 seconds to a minute, the high points, how can they understand this very quickly that will go so far in your career.

Wassia Kamon: Wow, that is so good though. Oh, 100, 500 percent agree because now I appreciate people as a CFO.

I appreciate people who do that for me.

Stephen Newland: Yes. 100%.

Wassia Kamon: And yes, I will promote somebody doing, because you only have so much time. Yeah. There's so many things going on and you also dealing with people who are not from a finance and accounting background. So what you just said of making something complex, simple is.

Totally an underrated skill. Thank you so much for sharing that.

Stephen Newland: Absolutely. I wish I would have heard this 10 years ago.

Wassia Kamon: Same here. Same here. Well, thank you so much, Stephen, for being on the show. You shared so many great resources. I will ping you again for the name of the book and any other books you may have for us.

Thank you so much. I

Stephen Newland: appreciate you having me on today.

Wassia Kamon: And that's it for today's episode of the diary of the CFO. Thank you so much for tuning in. Thank you, Steven, for sharing such great insight with us today. If you would like me to cover any other topic in the future, don't forget to email me at ask at the diary of the CFO.

com. If you're interested in working with Steven and own a not for profit, want to start a not for profit, definitely network with him and visit his website at money. Path FBA. com. Again, his website is moneypathfba. com. Thank you so much. And see you soon.