CFOs’ worlds orbit around money, but a new report by The Wall Street Journal suggests these professionals are willing to take a significant pay cut to make a career move.
Analysts have found an increase in the number of CFOs starting at for-profit companies and moving to nonprofits, reports said this week. In only the last year, there has been a 25 percent increase in the number of CFOs making the switch, according to reports — a surprising figure considering the wage gap.
The average salary for CFOs at nonprofits can range from about $44,000 to $314,000 a year, according to data from GuideStar USA. That compares to the whopping average of $2 million a year for CFOs at large public firms, a figure released by S&P Global Market Intelligence analyzed by the publication.
Reports also highlighted the shift in regulatory and compliance pressures when moving from for-profit companies to nonprofits. One of the largest challenges, analysts said, is the requirement for CFOs at nonprofits to report annually to the IRS. There is often a lack of resources offered to the CFO at a nonprofit firm, reports added.
In assessing CFOs who have made the switch, reporters found one professional that highlighted the challenge faced when handling tasks at a nonprofit that he had typically delegated out when working at a for-profit firm.
So, why would CFOs want to take such a large pay cut and take on a heavier burden by switching to a nonprofit? According to reports, CFOs are attracted to the feeling of making a difference at nonprofits and enjoy a more “mission-focused” role at these companies. A CFO with experience at a for-profit company, analysts added, can bring a heightened sense of financial discipline to a nonprofit company.
Additional reports by the Nonprofit Information Networking Association also noted that further research should be done to understand why CFOs make the switch, especially since comparing salaries of CFOs at small nonprofits to those at the largest public firms may not provide an entirely accurate portrait of the range of wages CFOs can earn.
“The sometimes-stark differences in salary do not necessarily mean that nonprofit CFOs are not as skilled and valued as their for-profit counterparts,” the publication wrote. “Some forms of compensation are simply nonmonetary,” like less hectic work schedules or a more collaborative work environment.