Executives with many talents
CFOs bring business savvy to the operation of nonprofits
Editor’s note: Virginia Business annually recognizes financial leaders in large and small nonprofits as well as small and large private companies and publicly traded corporations. This year’s Virginia CFO Awards were presented at The Jefferson Hotel in Richmond on June 20. (Profiles of the five winners can be found on Pages 79-87.)
Shrewd, strategic, innovative — but also good with numbers and multitasking.
Labeling them “number crunchers” doesn’t do justice to modern chief financial officers who often are called upon to help define the culture of an organization or juggle a variety of business models and improvise when the outcomes aren’t what they expected.
And, no longer do you find talented CFOs solely in C-suites.
Interviews with Virginia CFO Award nominees reveal that nonprofit organizations are dipping into the same talent pool as large private companies and publicly traded corporations.
Sometimes an experienced CFO can make all the difference.
Case in point: Larry Paxton, CFO of the Charlottesville-based Jefferson Area Board for Aging (JABA), adopted new accounting software soon after he joined the agency in 2015, giving leaders a broader view of its financial picture.
He found that “we’d been losing $400,000 like clockwork, and investments were covering the loss.”
Soon after he filed his report, his CEO cut the agency’s budget by 13 percent, and managers tightened spending. The financial results changed from a deficit of $606,000 in fiscal year 2015 to a surplus of $557,000 by FY 2017, creating stability for the agency.
“Given the financial information in a meaningful context, the CEO and the program managers made the right decisions,” Paxton says.
Before he joined JABA, Paxton’s career included 20 years as a private industry CFO and a consultant. He reached retirement age but decided he didn’t want to stop working.
After leaving the for-profit world, the University of Virginia graduate decided to move back to Charlottesville to work for JABA, whose mission is serving a growing population of seniors.
“We touch about 14,000 people a year in one form or the other,” Paxton says of his employer, which has annual revenue of about $5 million.
Serving the disabled
Julee Fletcher, senior vice president and chief financial officer of the Greater Richmond ARC, is another transplant from the for-profit to the nonprofit world.
She formerly worked for what is now the accounting firm of Pricewaterhouse‑ Coopers as well as three major banking groups. Now she uses her expertise to help an agency dedicated to empowering people who have disabilities.
That mission includes serving people ranging from babies with developmental issues to senior adults with memory impairment.
ARC’s programs have different revenue streams, a situation that results in the CFO juggling a lot of balls in the air.
The agency has about 400 employees — about half of whom are disabled — and a long string of workforce initiatives with federal and state agencies as well as private companies.
Fletcher’s job is to help assure that all of ARC’s moving parts work together smoothly with good financial outcomes.
“This nonprofit is a unique nonprofit,” Fletcher says. “It’s an entrepreneurial culture.
“Our staff and senior leadership are not satisfied with the status quo,” she adds. “We’re constantly looking for creative solutions.”
ARC serves about 1,300 people a year, but it has a waiting list of more than 2,000 who need services.
To help pay for its programs and provide paychecks to its workforce, ARC handles jobs for a wide range of clients.
To get a feel for the agency’s range of work, here’s a list from a recent report:
ARC daily cleans over a million square feet of office and warehouse space and manages more than 600 acres of landscaped grounds at facilities across Virginia.
- It assembled, packed and shipped more than 619,304 home-alarm sensors for a Northern Virginia home-security system manufacturer in 2016.
- It also assembled, packed and shipped more than 89,000 bundles of Fatwood, Plow & Hearth’s all-natural fire starter, to customers nationwide.
- It manages and runs a welcome center and a 24/7 emergency dispatch operation at one of the largest military bases in Virginia.
- It annually scans and digitizes more than a million documents and images for a variety of customers.
ARC’s current stream of revenue totals $16.7 million, Fletcher says.
“The business community is generally very surprised at what we do. We have a complicated brand, but it’s our brand,” she says.
Fletcher says moving from the for-profit world to a nonprofit agency has been one of the joys of her life. She can see how a successfully managed strategic plan can improve the lives of children, the aged, the disabled, and their families and caretakers.
“I feel like I hit the jackpot when I switched careers,” she says.
In far Southwest Virginia, the Appalachian Agency for Senior Citizens also has benefited from a career-switching financial officer who has brought industry-grade expertise to the nonprofit agency.
Brian Beck, who worked with Louisville Gas and Electric and later for Sunoco, found a new calling “about the time of the recession when things went south,” he says.
During Beck’s 7½-year tenure with the senior citizens’ agency, staffing has risen by 33 percent, with 50 percent growth in full-time positions.
Revenue, meanwhile has increased more than 75 percent, from around $7 million to $12.5 million.
“On our end of the state, we’ve become a large employer. We employ over 200 people, and we’d like to be able to do even more for our seniors,” he says.
Beck paints a picture of an economically challenged part of Virginia where the overall population of the four-county service area — Buchanan, Dickenson, Russell and Tazewell counties — is decreasing every year but the number of seniors is increasing.
Driving growth at the agency is a specialized rural outreach effort that operates as a program of all-inclusive care for the elderly (PACE).
PACE is a long-term care alternative for people who need help taking care of themselves at home.
The program provides health-care and social services for older adults who need nursing-home services but want to continue living in their homes and communities.
“It replaces Medicare and Medicaid. They fund our programs, and then we are responsible to provide anything that Medicaid and Medicare would,” Beck says.
Such a program, he adds, fits in a rural area because there is not a lot of competition in providing services to seniors.
Beck says that, because the program operates as an insurance pool, the Appalachian Agency for Senior Citizens has had to grow the pool to reduce the risk. “The larger the pool, the smaller your risk,” he says.
The agency pays for all medications for its senior clients, as well as all surgeries. It employs a clinical staff but also has a license to employ community-based medical personnel as well.
To transport its clients to medical appointments, the agency operates a transit system funded through the Virginia Department of Rail and Public Transportation.
The nonprofit also operates an intergenerational daycare center where seniors and children come together for meals, activities and interaction.
In recent years, the program has developed senior housing, which is in short supply in a rural area. “We are a life-cycle operation, and we’ve created a culture that is entrepreneurial,” Beck says.
One goal is to develop a business model that allows the agency to be less dependent on state and federal support.
“We think that for the foreseeable future, this is a growth industry,” Beck says, noting that the pool of eligible seniors is rising fast.
St. Joseph’s Villa in Richmond serves more than 3,000 children and families each year with programs that address mental illness, homelessness, autism and other issues.
Suzanne Hinton, CPA, who once was an auditor for a major accounting firm (her clients included St. Joseph’s Villa), has developed a clear vision of her purpose since she joined the nonprofit as CFO in 2016.
“My role is a change manager,” she says. “The CFO here has to be flexible. We are at the mercy of government funding: Medicaid, local school systems and states, and federal grants. We have to be able to move on a dime.”
Hinton does not know what the expansion of Medicaid in Virginia will mean for St. Joseph’s Villa nor does she yet know what effect federal tax cuts will have.
But she hopes that they will not result in less charitable giving, a concern voiced by other nonprofit organizations.
St. Joseph’s Villa, with about 280 employees, has 20 programs, each of which requires a different operating strategy because the revenue streams can vary, Hinton says.
It’s a complex model, and Hinton admits it took her awhile to get her arms around it.
She says St. Joseph’s budget has grown from $14 million in fiscal 2016 to about $18 million today.
“It’s almost a 30 percent jump. We’re growing exponentially,” Hinton says.
And, she says, the most important result of a bigger budget is more children can be served.
“Everybody here embodies service in transforming the lives of children,” Hinton says. “They provide the inspiration for me to do what I do.”
2018 Virginia CFO Awards: List of Nominees
2018 Virginia CFO Award winner profiles by Joan Tupponce
LARGE NONPROFIT ORGANIZATIONS: Michel Bilé, CPA, Hampton Roads Community Health Center, Portsmouth
SMALL NONPROFIT ORGANIZATIONS: Andrew Haugh, CPA, Housing Opportunities Made Equal of Virginia Inc., Richmond
LARGE PRIVATE COMPANIES: Peter Whitfield, American Systems Corp., Chantilly
SMALL PRIVATE COMPANIES: Amy Martin, American Cyber Inc., Chantilly
PUBLIC COMPANIES: Glenn Nunziata, Smithfield Foods Inc., Smithfield