Boost Your Staff’s Financial Savvy

Beyond an association’s finance staff and executives, the only people familiar with the dollars and cents that pay for your activities may be the department or program heads who manage their own budgets.

In many associations, that’s just the way it’s been done. “The old-school philosophy is that finance is just for financial people,” says American Physical Therapy Association (APTA) Chief Financial Officer Rob Batarla, CPA, CAE.

Batarla, who has facilitated ASAE’s The Bottom Line: Finance for the Non-Financial Manager  (opens in a new tab) program for 12 years, says that when he asks attendees about the size of their organization’s budget, more than half typically don’t know. “I think a lot of people have no idea of the financial health of their organization or the overall budget—and how much they’re a part of that,” Batarla says. “If you are responsible for a large chunk of the organization’s budget, you should know that.”

Some staff may be purposely, blissfully unaware of the finances—because they don’t like dealing with numbers. “A lot of people are afraid of numbers,” he says. “For some people, it’s like a foreign language.”

But numbers don’t need to be scary. In fact, associations can allay some of the anxiety that non-finance staff experience around numbers by educating them about the organization’s finances and showing them how its different parts, including their own work, contribute to the whole.

Even better, making this investment in staff is a form of professional development that benefits not only the employee but also the association.

What to Teach

To begin educating non-finance staff, the best place to start may be to show them how to build a budget.

“If you’re a communications major, no one teaches you how to do a budget,” Batarla says. Basic accounting concepts can also be helpful, such as what accounts payable, accounts receivable, and accrual accounting are. At APTA, Batarla teaches a class for staff each year. The association also shares information at all-staff meetings and in a quarterly financial packet.

The Association for Research in Vision and Ophthalmology also trains its entire staff. At least once a year, it offers “a refresher on what you see in your financial data, what questions have come up throughout the last period, and what would be good to know,” says ARVO CFO Jason Spessard, CAE.

Since almost half of the association’s 30-plus staff members have some budget responsibility, training covers things like what to look at when reviewing financial statements on a monthly or quarterly basis.

“Teaching how to read a basic financial statement is good for people who are new to associations but have had financial responsibility in the past, or people who have had no financial responsibility in the past and this is their first foray into that,” Spessard says.

If you’re a communications major, no one teaches you how to do a budget.
—Rob Batarla, CPA, CAE, American Physical Therapy Association

Another plus to training is that it familiarizes non-finance staff with common financial terms. Case in point: EBITDA—or earnings before interest, tax, depreciation, and amortization. Employees of ISACA, a global IT and cybersecurity association, talk about EBITDA regularly, and all employees are eligible to participate in an incentive program that rewards them for their contributions to revenue growth and EBITDA compared to the organization’s annual budget.

Robb Micek, ISACA’s CFO, started by educating all staff on the basics of EBITDA, and then delving into what they can do on a day-to-day basis to affect that number. He does this through new staff orientation, lunch-and-learn sessions, and regular updates at town hall meetings. “Most people understand the basic concept of revenue, but EBITDA is a little bit more foreign to folks,” Micek says.

At the Alliance of Arizona Nonprofits, staff get financial training through outside organizations, as well as the association’s own finance-focused training for its members. CEO Kristen Merrifield, CNAP, CAE, also passes along articles and other resources that she thinks might be helpful, and she goes over the budget at every staff meeting. “It’s a document that’s always in front of us,” she says.

Better Business Decisions

A good understanding of the numbers is also essential to making decisions based on data. “Having a handle on the organization’s finances is key to that,” Batarla says.

ISACA’s incentive program has led staff to make better decisions about expenses and “to take more calculated risks to drive performance, both from a top-line revenue standpoint, as well as an operating and EBITDA standpoint,” Micek says.

The way associations are evolving, “it is increasingly important that all levels of the staff are familiar with general financial principles and accounting principles, because it can directly impact their bottom line,” Micek says. “Some staff who are closest to the ground have the best ideas, and they can bring those forward.”

 In smaller organizations, Merrifield says sometimes all the financial responsibility falls on the CEO. “I think that’s a disservice to our teams—how else can we give them ownership and allow them to understand how the work that they’re doing flows up into the overall success or demise of the organization?” she says. “Your team is your most valuable asset, and you need them to take ownership in order to be most successful.”

Micek agrees that staff are the single largest asset in most associations. Staff with financial knowledge are more likely to consider: “‘Do we really need to spend this?’ Having that sort of thinking across the organization helps us to make sure we are doing things smarter and for the right reasons,” he says.

Which Staff?

Now the question becomes which employees need training. Some staff, like those in meetings and tradeshows, are usually more focused on finances than staff who don’t deal with a budget every day. Batarla also pointed out that staff often move up into positions with budget responsibility, “and they’re hungry to have the correct info to do it properly.”

The Alliance of Arizona Nonprofits has only six full-time employees, and historically, the CEO had been the only one involved in the finances. When Merrifield came on board, she wanted to give everyone an understanding of how the budget works and how they contribute to it in terms of both revenue and expenses.

Merrifield started including the entire team in the initial budgeting process each year. “They’ve really taken ownership of it,” she says. In addition, she recently brought two program staff to a training session that the CEO and CFO level would normally attend.

“I wanted them to have that knowledge—how different ways of presenting financial information could work for us,” she says. “Now they see why it’s important to have a budget for your program and how it ties up into the overall budget, so we end up celebrating together when we hit our annual revenue goals.”

Access and Transparency

Allowing more employees to take ownership of financials also creates a culture of transparency. ARVO’s old accounting platform allowed only the accounting staff to access it, so sharing anything required downloading reports and massaging data.

To alleviate this, Spessard moved to a cloud-based platform where staff can check their financial information anytime through customized dashboards. Some employees see the income statement for just the program they work on, and others can see more. Through an online review system, employees can ask questions and Spessard can respond. The platform also allows Spessard to see who logs in and reviews their information.

Sometimes staff should be able to access data outside their area—for example, someone in membership who is looking at whether dues are appropriate might want to see the expenses for online education, if that’s a benefit that dues cover.

“This is the type of conversation we have,” Spessard says. “What does this mean to me when I’m looking at these financial statements? What else does it impact? And what else am I not seeing that would be valuable for me to know on a regular basis?”

Spessard says he tends to make more data available than staff need, in hopes that it will get them to ask questions. “The extra eyes from somebody who’s not intimately involved in a program may raise questions about why we do something a certain way and bring up ways we can improve something or become more frugal,” he says.

Educating staff about finance doesn’t just help them do their jobs better and help the association—it may also help them personally.

“You’re investing in your employees,” Merrifield says. “You’re giving them more skills than when they started out with you, and that makes them better people and better future employees.”