Nonprofit leaders juggle mission, board dynamics, burnout, funding uncertainty, and the constant pressure to “do more with less.” And in the middle of all of that, finance often becomes the thing we avoid until it becomes the thing we can’t ignore.
In this week’s 501(c) Drop, BetterUnite Co-founder Leya Simmons sat down with Sean Hale, Founder of Nonprofit CFOs, for an honest conversation about the financial myths that quietly hold organizations back. The theme was simple: don’t be afraid to peek under the hood. Financial clarity is not a luxury. It’s what lets your mission survive bumps, make smart bets, and scale without breaking your people.
Below is a recap of the biggest takeaways, framed around the myths they tackled live.
Sean put it plainly: nonprofits can absolutely end the year with more money than they started with. Call it profit, surplus, earned income, or “strategic reserves.” The label doesn’t matter as much as the outcome.
When you build reserves, you gain:
One practical approach Sean shared: instead of staring down a giant “6–12 months of reserves” goal, start small and consistent. Budget to finish the year with a surplus and let that build over time. The organization you protect in the future is the mission you serve today.
This one might be the most damaging myth in the sector.
Sean illustrated it with a vivid comparison: a “low overhead” youth mentorship program with almost no supervision, no vetting, and no training might look “efficient” on paper. But the outcomes can be worse and the risk can be higher.
A higher-overhead organization might be investing in:
Sean’s reframing is the one nonprofit leaders need funders, boards, and communities to hear more often:
Overhead is not waste. It’s infrastructure.
And infrastructure is what makes impact repeatable.
It’s easy to feel guilty building reserves instead of pushing every cent into programs. But Sean brought it back to long-term mission stewardship.
His point: if reserves let you survive the next bump in the road without layoffs, panic decisions, or program collapse, then reserves are absolutely mission-serving.
Reserves also protect:
The goal isn’t hoarding. The goal is staying alive long enough to deliver the impact you exist to create.
Sean’s take: if your back office is weak, you can raise more money and still struggle. More revenue won’t fix broken infrastructure. It just pours more water into a leaky bucket.
What helps more than “turning up the water pressure” is:
Fundraising matters. But it works best when the organization can actually absorb and deploy resources well.
Sean emphasized this with empathy: lots of leaders aren’t “numbers people,” and many have real math anxiety. The good news is you don’t need to become a CPA to lead well.
But you do need enough financial literacy to:
Or, as Sean put it: if you want a seat at the big kids table, you need enough fluency to stay there.
Yes, boards hold fiduciary responsibility. But if the executive leader checks out of finance, the board will step in. That’s when micromanagement creeps in and trust breaks down.
A strong leadership posture looks like:
Sean made a key point: if the board excludes executive leadership from finance conversations, the board gets blind spots too. Everyone loses context.
Sean addressed the semantics head-on. “CFO” doesn’t have to mean a full-time executive salary. For many small and mid-size organizations, the right move is fractional CFO support: the guidance, oversight, and strategic thinking without the full staffing burden.
Fractional financial leadership can help with:
If you want to grow beyond “mom and pop,” consistent financial leadership isn’t optional.
This is the nonprofit version of deferred maintenance. It doesn’t disappear. It gets more expensive.
One red flag Sean sees often: the burned-out finance person who quietly carries the whole system until they quit… usually at the worst possible time (hello, mid-December).
That creates:
The cure is boring but powerful: documentation, redundancy, internal controls, and real support.
Sean’s answer: it depends on whether you want the same results as last year… or bigger impact.
A strong budget is tied to strategy:
In other words: budgets can be a checkbox, or they can be a steering wheel.
Sean’s closing point was simple: financial literacy is part of leadership.
You don’t need to turn into a CPA or live inside spreadsheets. You just need enough confidence with the numbers to ask smart questions, spot trouble early, and steer the organization without driving straight into a financial pothole.
If this conversation hit home, here are a few resources from Sean that expand on the ideas we covered:
If you’re in Austin, Sean is also hosting a live Financial Literacy training in March for nonprofit leaders.
Transcript Recording:
Leya Simmons (00:01)
Hi everyone. Welcome to our 501 C drop. My name is Leah Simmons and I am the CEO and co-founder of better unite and your perennial host for the weekly now weekly 501 C drops that we have. We have ⁓ conceived of these sessions, these webinars slash podcasts as times for us to kind of talk about a lot of the time, the stuff that maybe organizations and organizers like you, you think about a whole lot, but they aren't always.
you know, lifted up into the conversational realm. So that is what our effort to do with the 501c drop in general is, is to really kind of bring out into the light and talk about a lot of the stuff that I know as a former frontline fundraiser, you all are working on and to talk about that with experts in the field. And then today's topic, particularly, so here you see the nonprofit myth busting, you know, if we're being honest, a lot of
executive directors, nonprofit leaders in all shapes and sizes, you know, kind of, we're operating a lot of the time under beliefs that feel right or they seem intuitive, but in reality, can actually, some of these myths or beliefs can actually be holding the organizations back. So I know this is especially true, as I mentioned, for
executive directors, and leadership levels, but it really can run up and down the organizational chart, including board members. I myself sit on a couple of boards that we call working boards. You're juggling mission and other board members and burnout and everything else and fundraising and everything else that you need to do. And it all happens at the same time. So I'm gonna stop my share here and talk to my friend, Sean Hale, who's joining me today. Hi, Sean.
Sean Hale (01:53)
Hey, hey, Leah. How's it going?
Leya Simmons (01:54)
I'm doing well, how are you?
Sean Hale (01:56)
Doing great, thanks for having me on the show.
Leya Simmons (01:58)
my gosh, I'm so happy that you are here. And Sean is the perfect person to talk to about all of these things. Sean spends his days eating, breathing, living the financial realities of nonprofit organizations. He is the founder of nonprofit CFOs. He and his team help nonprofit leaders actually understand their numbers and not just survive them. so I'll say, I actually met Sean and we were just talking about this before you all joined us.
I met Sean at last year's A Better Conference, Better Unites annual conference, and ⁓ which is a conference slash wellness. And then a couple of, I guess it was maybe a couple of months later, Sean, and I don't know if you know this part. A couple of months later, I was looking at your LinkedIn post where you mentioned that often conferences and podcasts and webinars geared towards our nonprofit sector really don't very often speak to the administrative
efforts, hurdles, problems of the nonprofit world. And your post really resonated with me. And I candidly just believe that it's very true, that it's maybe a less sexy topic, it's maybe financial and a little scary. We're gonna talk about numbers, we're gonna get into some weeds. And honestly, in our Better Unite webinars, we have had HR experts, CPAs,
you know, that sort of thing, because as a software company and a software platform for nonprofits, we do deal with that a lot of the time. But I agree that there's less, are that those, these topics, these administrative topics, they are given short shrift a lot of the time by folks like me, frankly. So I was very excited to have you on. I honestly, after that post reached out immediately and was excited to ask you to come here. And this topic just is really kind of, think, perfect for our
for the group today and to speak to the missing components that your post was talking about.
Sean Hale (03:59)
thank you for helping to break down those silos because I think it is really easy for us to fall into the whole idea. You know, I talk a lot in analogies and so like the whole idea of, well, you know, there's somebody else who takes care of my car. I don't ever lift up the hood. I don't even worry about putting gas in the engine. I just kind of show up and drive it. And if that's, if you have their relations, that kind of relationship with the nonprofit, you're just going to have these massive blind spots and you're not going to know when the problems are starting to appear. It's going to be hard to do preventive maintenance.
it's going to be hard to manage the risk. In other words, it's going to be hard to be a good leader and the most effective leader you can if everything that's going on under the hood is just a massive blind spot. And so the more that we can do to get our leadership, you see the idea that no, this is good. It doesn't have to be scary. Sometimes the way people go about it makes it scary. And so we have also need to know like, when is this being done and well, and in the right way, when is this
being done in the wrong way. yeah, that's why I have this negative reaction every time. And ⁓ so, yeah, thank you for, hopefully we'll be able to help a few people bust some myths and ultimately have bigger impact for the organizations and the missions that they're serving.
Leya Simmons (05:01)
Right.
feel confident.
Do not be afraid to peek under the hood. All right, well, let me give you a little, let me finish my introduction that I have written for you, Sean, and then we're gonna dive right in. I prepared for this conversation by honestly listing out a whole lot of the myths that I could think of, and I just wanna get your reaction to a lot of them. So let me finish telling you that Sean and nonprofit CFOs work with organizations that are growing, organizations that feel like they're stuck.
Sean Hale (05:15)
Hahaha!
Leya Simmons (05:36)
and organizations that maybe kind of look fine on the outside, but as we mentioned, maybe looking under the hood, have some quiet or not so quiet stressors behind the scenes. And what I, like you just said, Sean, what I really appreciate about you and your work is that I don't feel any shame for the leaders. There's no shaming on your part. There's very much a, if we look at this thing together, we can handle it, we can deal with it. So.
I really appreciate that aspect of your work, just helping leaders to be better, to show up in a different way, and really just make smarter decisions. So again, thank you for being here and welcome. All right, ready? Here we go. Myth number one. We're just gonna dive right in, is that okay? All right, I love it. Nonprofits shouldn't make money. So that's like.
Sean Hale (06:18)
Thank you. Let's do it.
Yeah, let's do it.
Leya Simmons (06:29)
For me, that's just the big one. I hear it all the time. That along with, know, nonprofits should run like a business. Those two are the ones that I hear the most. But let's start, let's tackle nonprofits should not make money. Why is it that the nonprofit sector still believes that like making money is somehow a bad thing?
Sean Hale (06:49)
I'm sure there, you know, as many reasons as there are people out there that are believing this one, but certainly the name doesn't help, right? It's the nonprofit sector. And so a lot of people go, well, it's in the name, right? And that's technically not what the name means, but we also have factors like, um, most nonprofit here's are actually their number one driving force is make the world a better place, not making money. And so you have a mix of things like that that contribute.
to this myth. And so the truth is that nonprofits, absolutely, they can make crazy amounts of money. They can have crazy huge profits. A lot of times they might prefer to call them a surplus. what, yeah, yeah, can call it whatever you want to. But the point is that you end the year with more money than you began the year, right? That's whether you call it profit, a surplus, or something else. ⁓
Leya Simmons (07:33)
Earned income revenue streams, I've heard that one.
Sean Hale (07:48)
the more that you can do that, the bigger impact you can have as an organization. One, because it lets you build up reserves. And those reserves are gonna help you when you hit bumps in the road. we, you if you're not aware of bumps in the road, you've not been paying attention the last six years. Like most nonprofits have had a bunch of bumps in the road. And that's just part of life. And, but when you have reserves, that means that you don't have to run around like a chicken with its head cut off.
Leya Simmons (08:15)
Now you
can survive them.
Sean Hale (08:16)
when you hit
those bumps, you can survive them. And you can just take the time to go, gosh, we do need to make some big changes here, right? Like our main funding stream dried up where it's no longer reliable or whatever it is. But instead of having to make a decision today or this week, you can go, you know what? Let's take three or four weeks. I'm going to check in with a variety of people that I trust, gather some information, and we're going to make some really good strategic decisions. And if we have to let staff go because
our funding stream is dried up, whatever, we're gonna be able to give them decent notice, right? We're not just gonna have to cut them loose tomorrow and tell them sorry. And those are really good things that reserves allow you to do, make better decisions, handle a crisis better, treat your staff better. But the other thing that they can let you do is make big investments that you couldn't otherwise, such as hiring your first big fundraising staffer, right?
not like the clerk is doing data entry into your donor management system, but a fundraising leader. And the rule of thumb that I have is that can easily, that I've been told over and over again, right? Not my area of expertise, but I keep on being told, know, if you hire like a fundraising director, don't expect them to be able to make enough money to even pay themselves for like the first 12 months. And yeah, yeah, it's...
Leya Simmons (09:32)
Yeah, it's not a financial spigot. It doesn't get to just turn on.
Sean Hale (09:36)
They don't
come with a big Rolodex of people they can just call their first. can say, Hey buddy, need $25,000 to pay my salary this month.
Leya Simmons (09:43)
for this brand new initiative,
for this brand new organization that I've never told you about before, yeah.
Sean Hale (09:48)
Yeah. Yeah. And so, well, gosh, how does an organization, how can they even jump in the pool unless they have a nice reserve that they're sitting on? They say, you know what, we're going to make the strategic investment. We're going to make this higher this year because we can do it with confidence because we have enough money in the bank to pay for this person for 18 months or 24 months or whatever it is and not have them feel like they're going to have to raise $100,000 on their first day.
Leya Simmons (10:18)
mean, it almost feels like we've got a semantics problem, right? It's not less, instead of thinking of it as profit, maybe it's strategic reserves. Like that's what we're thinking of, like building a strategic reserve that can be used in times of trouble or in times of expansion or whatever it is.
Sean Hale (10:33)
Yeah, yeah, whatever label helps you kind of do the thing. This is what helps you have the healthier nonprofit and have the one that's going to not close its doors because it hits a bump in the road. And a lot of them do.
Leya Simmons (10:45)
So then,
yeah, no, you're totally, and especially, mean, 2025 was a case in point year, right? We had a lot of folks hit by federal funding cuts that didn't have a place to go when that happened. So then what does that look like on a day-to-day basis for organizations? they're, know, in a mindset shift from, okay, we cannot actually ever make a profit, to we want to build up this strategic reserve. What does that look like in a day-to-day?
Sean Hale (11:15)
The way that I would recommend going about the one that you can kind of take to the bank and kind of work slight clockwork is just we're going to budget to have a profit, to have a surplus. And then that surplus at the end of the year just becomes part of the strategic reserve. so if you're going to say, and that can feel daunting because people say, well, how much of a reserve should we have? And somebody will surely tell them, oh, six months or 12 months.
or the foundation that funds us has a three year surplus. And then they'll look at that mountain and they'll say, well, I'll never climb that. that's not, when you look at it that way, of course, it's going to feel daunting. And so instead, I would encourage you to see it as kind of like going about the same way you would eat an elephant, right? One bite at a time, just like in the old joke. And so if you can put aside two weeks worth of expenses every year,
Leya Simmons (11:46)
right?
Sean Hale (12:09)
before too long, you're gonna have a healthy reserve, right? And so if you're making, ⁓ hopefully that doesn't feel like something that's gonna break the bank for the organization. It is some money and it's money that is not gonna go into the programs this year, but it's the money that's gonna help us not be totally distracted and have the program suffer in three years when we hit that bump in the road.
Leya Simmons (12:12)
Yeah.
everything exactly.
Right, that long-term viability, we talk about that ad nauseum, we talk about it when we talk about recurring payments and we talk about it all these other contexts, but just saving it sometimes is the way to talk about it. I love this. Okay, let's move on to my myth number two. Overhead, if you have overhead, that equals you're a bad nonprofit. So, is low overhead really a sign of a better nonprofit? I guess that's my question.
Sean Hale (13:02)
Yeah, yeah, that is, think, one of the most damaging myths that we live with in the nonprofit sector because it causes so many otherwise really smart leaders to do things that are penny wise and pound foolish because they think that I'll just keep tightening the belt and tightening the belt. so imagine two youth mentorship programs and one of them is the low overhead one, right? And so in this organization,
Leya Simmons (13:07)
Mm-hmm.
Sean Hale (13:30)
They have one mentor for every 50 kids ⁓ because they're keeping overhead low, right? And they don't run criminal background checks. Definitely don't train that person because gosh, that could be wasteful. And they don't have HR in place or anything like that. So I actually have a bunch of kids kind of running wild, unsupervised, maybe doing drugs over in the corner, but you know what? Overhead is low, right? And so check the box, must be a great program. Compare that to another nonprofit.
Leya Simmons (13:53)
No overhead.
Sean Hale (14:00)
that's also working with youth mentorship. And they're investing a lot of money and time in making sure there's good vetting of the people doing the mentorship and good training for them, ⁓ including criminal background checks. They are providing strong ⁓ follow-up, strong infrastructure so that they can retain those people year after year after year in the mentorship. They're having a strong impact on kids, but yeah, overhead's gonna be higher in that situation, right?
the executive director of that other organization isn't spread thin trying to do 18 people's jobs, trying to, because of the overhead myth, told them that it would be sinful to hire some help.
Leya Simmons (14:41)
It's one of those words that I wish, again, a semantics problem that I wish we could remove because I do see organizations that will tout that we are completely volunteer driven or that we are, and sometimes that works. I don't mean to say that that piece doesn't work, that not a single cent of your donation is going into overhead and things like that that just perpetuates that.
the myth of the no overhead piece. And you said that word, you said this word in there, and rather than thinking of it as overhead, thinking of it as infrastructure, I think that's such ⁓ an important shift.
Sean Hale (15:15)
Yeah.
Yeah, what I would really hope that we would see more funders do and also the nonprofits and the boards and everybody is really look at your impact rather than overhead because overhead was just something that they could point to on the 990, which is the annual form, kind like the tax return for the nonprofits. Well, there there's a number right there. And so that that's kind of how we're going to measure it. It's harder to measure impact, right? Because it's not it's not the 990. But but yeah, like
Leya Simmons (15:23)
Right.
Sean Hale (15:46)
Here's the big impact we're having on kids, right? That when these kids come into the program, they're all from these high risk families ⁓ and blah, blah, blah, blah, blah, like tons of risk factors. And without this program, probably a lot of them would be in jail, but the kids that go through our program, like 90 % of them finish high school, 80 % of them go to college and finish at least a two year degree. None of them end up in the prison system.
That sounds a whole lot more interesting, I think, than, well, we had some basketball available for them. There was no supervision. They did drugs in the corner. Yeah.
Leya Simmons (16:16)
That's impact. Absolutely.
Basically babysitting, not really. Yeah.
And I wonder too if, for boards, particularly, and this might not be something that you would say, in a fundraising appeal, but for your board talking about what didn't happen, like we have not had any misconduct by any of our teachers, we have not, or whatever they are, supervisors, mentors, ⁓ all of those things too, bringing that up the upfront to not really even justify, but to highlight what that.
infrastructure is providing.
Sean Hale (16:58)
Yeah, well, this gets more into your area of expertise. So you tell me, but this feels a whole lot more like the kind of message that works when you're doing relational fundraising, not just sound bites and well, you know, we sent them three emails this year, but you know what? Sitting down with these donors once or twice or three times a year, having coffee or whatever, and really talking to them about the quality sides of it, not just, well, our overheads at 3%. Yeah.
Leya Simmons (17:22)
Here's our bullet points. It's so much,
you're exactly right. And it's very much about nuance, right? Like when you have the opportunity to sit and chat with somebody versus sending them an email or sending them a deck or whatever it is, then you get to kind of dive into gray areas and explain or, and not explain in a defensive way, but like really describe the, the full picture, right? The nuance of why you're doing what you're doing. So yeah, you're speaking my
All right, well, you said another word that's leading me to my next and literally it is myth number three on my list. Spending every dollar equals impact. So, you know, what do you say to a leader who would, you know, feel guilty about building up those cash reserves rather than putting every single dollar into programs?
Sean Hale (17:53)
Great.
Yeah, that's a very real feeling. And I get it. It kind of boils down to, would you plant a tree today, even though you're not going to enjoy the shade or the fruit from that tree for a decade? Because if you could come around to, oh, he likes trees or he likes apples. OK. Well, good for him. Yeah, yeah. And so it does. takes a little bit of a mind.
Leya Simmons (18:28)
Mmm. Now you're speaking my husband's language. He's always trying to plant trees for 10 years from now. That's good. Now we've got some trees now. It's wonderful.
Sean Hale (18:43)
change, but it is, and it's also, it's really, it's thinking about the long-term impact. And because the organizations that don't have those reserves, they could be going out of business the next time they hit a bump in the road. And that's why it's so important to have those reserves there. So they don't go out of business or so they don't, you know, I've seen this happen too, yeah, we don't have any money. Well, let's just call up our board cause they'll bail us out again. And over time you do that enough times and
Leya Simmons (18:49)
Yeah.
Mm.
Sean Hale (19:13)
You're going to run away your best board members. They're going to get tired of it. They're going to disengage. They will write smaller and smaller checks. And wouldn't you much rather have a board that is proud of the work that you're doing and the good stewardship that you're providing that you're not coming to them with crises. Instead, you're coming to them with, let's talk some more about the life-changing experience we're having on all these kids or whatever your mission is. And so they can feel proud going to their friends to say, Hey, I'd like you to write a big check.
Hey, I'd like you to come to the gala. I would like you to join the board when I roll off because we need another top flight leader from the community just like you. And I know you don't like being on the board of an organization that's a go rodeo and this organization is the complete opposite. So there are consequences to not having that investment in that strategic reserve.
Leya Simmons (20:07)
Yeah, it's that long-term strategy, the looking ahead to what's coming. That's great. You've clearly written a few appeals to ⁓ potential board members. can hear from what you're saying. All right.
Sean Hale (20:16)
⁓ I definitely think
about that and also the burnout to the staff. Cause if you don't have those reserves, you people in those leadership positions, you're, yeah, you're plugging holes in the dyke rather than going out and doing the programs. And so ultimately you have less mission impact, less program stuff going on. If you spend all your time plugging holes.
Leya Simmons (20:22)
That's true too. Now that's one that's very real.
I gotta say, I love your speak and analogy. It's very clear to me. It's really working for me. I also forgot to mention that for all of our listeners that are live today, we have a Q &A section. If you want to drop any questions for Sean into that section, hopefully we'll have a couple of minutes at the end to answer those, but we'll also follow up with you if we don't. And for anybody watching the recording, you can email those questions to support at betterunite.com and we'll make sure that you get answers too. Sorry, I'm supposed to say that at the beginning.
Sean Hale (20:43)
Yeah.
Leya Simmons (21:09)
but I just remembered so. You got a lot of real gems in here so I wanna make sure that we can answer questions when we can. Okay, here we go, next myth. And this one's maybe a tough one for me as a fundraiser to hear but the myth is fundraising will fix everything. It's actually really not tough. It's a big relief to hear this framed as a myth.
Sean Hale (21:11)
It's all good.
Leya Simmons (21:31)
But I mean, I do know that a lot of, like you mentioned, board members will believe that if we've got a strong fundraiser in there, the financials will just work themselves out. ⁓ What would be your response to that?
Sean Hale (21:47)
Well, since you're into this analogy thing, ⁓ if you believe that, then I guess you can also believe that as long as you keep on turning up the water pressure, it doesn't matter how many holes you have in the bucket. And I'm kind of an advocate of, let's plug the holes in the bucket, because that's going to be a much better use of the water. Because if an organization's back office, if its infrastructure is weak enough, then it doesn't matter how much money you throw out. The organization will always
Leya Simmons (21:48)
you
⁓ that's
Yeah.
Sean Hale (22:16)
struggle. But once you plug those holes, it can make just a big difference. And so I absolutely worry about those organizations where the leader just has blind spots around the finances. ⁓ And sometimes by choice, sometimes they are quasi choice, where they think, gosh, you know, I was just never good with numbers as a kid, and that's not my thing. And I get you, I hear that. And that's absolutely a real thing. And if you're that kind of leader, I want you to know that
one of the very best leaders I ever worked for, she would get nervous just at the thought of like having to balance her checkbook. Definitely not a numbers person, but a highly effective leader. And one of the things that made her effective as a leader was she was leveraging her strengths and also delegating and leveraging other people to make the whole pie workout. You don't have to be a CPA to be a great leader. And sometimes I think some people think that and then they just kind of
Leya Simmons (22:53)
Right?
Hmm.
Sean Hale (23:15)
bury that little voice down inside like, because I'm not going to be a CPA, right? And that's okay. You can be a great leader without ever being a CPA, without being a bookkeeper, without becoming an Excel wizard. But there are certain things that if you're able to learn them, just kind some basic finance and stuff at the leadership level, you don't have to learn debits and credits, don't have to understand what a net assets roll forward means.
Leya Simmons (23:40)
interesting.
Sean Hale (23:44)
And that's one of the things like when I find trainings that other people are doing sometimes for financial literacy, it's like hearing one CPA talking to another CPA. And so they want to, they want to talk about debits and credits, but you don't need to understand any of that to be a really awesome leader, but you do need to have a sense of what does it look like to have a healthy finances? What kind of questions do I need to be asking? What kind of reports do I need to be getting besides the standard?
Reports that come out of QuickBooks. Do we need to get them in a format that is more graphics rather than numbers? Do we need to have somebody who is going to help us surface the top three, four, five things that leadership should be worried about and have conversations about those things? Does that make sense?
Leya Simmons (24:20)
Hmm.
It absolutely does, no, and I'm thinking of countless examples that I have ⁓ in my own experience. And the only thing that I was, I don't even know if this is an addition, but I would like to ask, because I've seen this work, this feels like a place where leveraging a strategic board member could be a really good. ⁓
you know, thing for an organization. Like if you've got this very dynamic, very capable leader who just doesn't have all of the nuances of the financials of the organization under their belt cap, whatever, having, you know, short of paying for somebody like you or somebody, and actually I'm a huge fan of bringing in a consultant to do that sort of work. But.
Also finding a board member that might be able to support the leader in that role could be a really good use of the time. Do you think that that works?
Sean Hale (25:25)
yeah, I have a blog post
or two about getting a fifth grade math teacher to be your next treasurer. ⁓ Yeah, yeah. Because yeah, so many, because people think, I need to get, this is another myth. we need a CPA to be our treasurer. If that's your only criteria, you're probably going to end up with a dud. some CPAs are awesome and very well suited for the job, but.
Leya Simmons (25:30)
⁓ that's great. ⁓
Not necessary.
Sean Hale (25:50)
Many are not, and it's really dangerous to have that as your main criteria or even your only criteria. The upshot of a fifth grade math teacher or somebody kind of in that neck of the woods is that they're going to be comfortable with the numbers, hopefully. They're going to be good at explaining them to people in a language that everybody can understand. And chances are, if they're any good at being a fifth grade math teacher, they're probably good at actually making the subject matter exciting and engaging.
Leya Simmons (25:56)
Right.
100%.
Sean Hale (26:18)
And that's what you need for that time, whether it's the executive committee meeting or the management team meeting or the board meeting, that you want that to be engaging because you do want the board to walk away with, okay, these things, these three things are important and I understand them in a kind of meaningful, visceral way. Not because I studied the profit and loss report for an hour and brought up my slide rule, but because there were...
there was somebody who explained it to me in a language who I could understand. And hopefully there were also some good graphics to back it up. the message was our cash has been falling for the last six months and we're pretty worried about that. I can also see the line on the bar graph there and my gosh, that is concerning. Like we're going to, if we don't do, if nothing changes, we're going to be in trouble come September. Okay. Now I get it now. And I can, I can own the problem. And when you have board members who
Leya Simmons (27:05)
And it's yeah.
Right.
Sean Hale (27:14)
feel disconnected from this stuff and they can't see it with their own eyes and hear it with their own ears and somebody just tells them there's a crisis, they're a lot less likely to lift a finger to help, or they're gonna do a fraction of the help they could do if they felt like they were along for the ride from the beginning and that they were participating in the financial decisions. But when they can't engage with the financial reports, they don't feel ownership of the decisions either.
Leya Simmons (27:37)
That's totally, and that's from the main job of a board is the fiduciary responsibility that they have to that board. So I am going to pause too, to say that we definitely need to link your, why you need a fifth grade teacher as your treasurer blog posts when we send out this recording, because that is brilliant. And I've never heard it explained that way. And I just love it. And frankly, again, you're doing a very good job of teeing at my next myth, Sean. My next one was, I don't need to understand the numbers as a myth. So I, you know, again,
Sean Hale (27:51)
Yes.
Mm-hmm.
Leya Simmons (28:07)
I think you really spoke to this, like why executive directors who are technically fine, but they don't really get their financial picture. And you've, mean, I don't know. Do you have anything else to say on that one? I feel like you really just covered it. Okay, good. I love it.
Sean Hale (28:19)
I'll have more. Don't worry. So
yeah, this is one where, you know what, if you're okay with your nonprofit being kind of stuck at the mom and pop level, by all means, you know, I'm not here to say that that's awful. And for some organizations, that's absolutely the right level of operations from now until you close up shop at some point.
Leya Simmons (28:44)
I mean, the
same can be true for a for-profit company as well, right? Like if you're not interested in growth, like this is status quo, okay, good.
Sean Hale (28:47)
yeah.
Yeah, yeah. so that, but, so, so much of what I say, it's oriented towards the folks who aspire to have a bigger impact, right? That's one of my biases is of course you want to have a bigger impact instead of helping just a hundred kids a year. What if you could help 200 or 500 kids? But it's, it's that whole thing of, know, understanding the numbers can kind of sound like for me to take our organization to the next level as a leader, I have to become a CPA and
Leya Simmons (28:59)
Sure.
Sean Hale (29:21)
you don't have to become a CPA. Please don't worry about that. please, you know, it's hold you and the executive director seat, hold the accountants and finance people around you accountable for getting these, the information into a format that is easy for you and the board of directors and all the other key leaders to understand, to speak in plain English.
And to give you those graphics so that you can see what's going on. I have a kind of semi-tangential story related to finances, but also infrastructure, which is also kind of ends up sometimes in that same ball of wax that just, oh, we don't worry about infrastructure. That's just like a necessary evil, but we pay as little attention to it as possible. So once upon a time, my first job as an adult, as a grownup, was working with this nonprofit.
The year before I started there, there was a big emergency and they were able to raise $200,000 to respond to this natural disaster. Cool. ⁓ I came on as employee number two and there was another massive natural disaster less than a year after I started full-time. And over the following 12 months, we were able to raise a million dollars. And it's not because I'm a fundraiser. I'm not. I've worn that hat. That's not where I shine. And so...
Leya Simmons (30:36)
Ugh.
Sean Hale (30:47)
⁓ but what made a difference from being able to raise 200 grand to five times that was the infrastructure that I was able to put in place. And so when you have that strong back office, when you have strong infrastructure, all the other stuff functions so much better, whether it's your communications, whether it is the program stuff, because it's getting just all the dots, dots on the eyes, the T's crossed.
Leya Simmons (30:55)
Hmm.
Sean Hale (31:16)
all that stuff when you have good infrastructure in place. And yes, that's overhead, but that is what allows the rest of the organization to flourish and allows everybody else to do what they do best. And so those are things that pay for themselves. And it feels like an evil, no, that's not my thing. Cool. As an executive director, I don't want you spending any more time by administration than you have to. I want you going out there and doing the things that only you can do, but you do have to invest in and know enough about the, whether it's the
finances or the rest of the infrastructure to be able to tell this is going well from this is not going well, right? To be able to hire, supervise, fire when other resources are needed, you know, go out and find that other resource. Like maybe, you know, we're hiring a high potential person to be our administrator, but they're going to need a little mentorship. And so we're going to bring in somebody who can help train them on maybe some office skills, maybe some leadership skills, maybe...
be their go-to person to help them handle the accounting well, that kind of thing.
Leya Simmons (32:17)
So what would be the kind of key components of, like in your example, what were those kind of key components of the infrastructure that you built out in that one year? Very high level, I'm not asking, I'm sure there's a lot of nitty gritty in there, but.
Sean Hale (32:28)
yeah, yeah.
It was a thousand things. You know, we had, it was having the bookkeeping in house. It was making sure there was timely followup to inquiries, ⁓ whether it was from a board member or a potential donor or whatever. It was when we had folks approach us saying, Hey, you know, we
Leya Simmons (32:38)
Mm-hmm.
Sean Hale (32:55)
We heard what happened, we would like to do a musical event to raise money. Having the follow through on that. ⁓ It was, if we didn't have a CRM, then we got one really soon afterwards.
Leya Simmons (33:03)
No.
Or put
the one you had sitting over there gathering dust to use. see that a lot too. There was no one. Okay, there you go.
Sean Hale (33:14)
no, no, no, no, no, no, there definitely was not one. Yeah, no, it
was. Yeah. Yeah. And granted, this was, this was a long time ago. Serums were not near nearly as, as common as they are now. And so, ⁓ yeah, yeah, it just felt like pie in the sky for big nonprofits. When really, think you and I know that, gosh, as soon as you're ready to get even maybe even before you get out that all volunteer stage, and definitely if you're committed to moving beyond mom and pop,
Leya Simmons (33:26)
Not as accessible, for sure.
Sean Hale (33:42)
you need some kind of donor management system. And if events are a big part what you do, then get one that's really good at managing events too, right? Because that software saves you time, it gets you...
Leya Simmons (33:45)
sure.
Small plug for better unite.
Yeah, for sure. Yeah. So this is wonderful. So I want to take us back to our myths because I mean, I think I could stay on this point forever. But we did also mention the board and the board's, ⁓ you know, kind of interplay with the executive staff, particularly. But so my myth number six is finance is the board's job.
Sean Hale (33:56)
But that's what allows you to do these things better and not burn out.
Leya Simmons (34:19)
What do you, what would you say is the biggest misunderstanding that some of our nonprofit leaders have about where their job as the leader of the organization ends and the board's job begins?
Sean Hale (34:34)
Yeah, we could spend all day on this for sure. Even on as a financial part, think we could. And so when I think about that, I definitely think about, you know, as a leader, you know, speaking to like executive directors who might be thinking that, do you want to be at the big kids table?
Leya Simmons (34:35)
I know, right. Relative to finance, let's stay there. I mean, that's pretty.
Sean Hale (34:52)
Because if you are not in a position to have financial conversations, if the board sees you as somebody who's not engaged in the finances, then they're not gonna invite you to the big kids table. And that's gonna create some tension, because sooner or later you're gonna wanna be involved at the table.
Leya Simmons (34:53)
Yes?
Mm.
That is a great point.
Well, and it's going to undercut your authority, your ability to change anything. I mean, there's so many pieces to that.
Sean Hale (35:16)
Yeah. And if you don't want the board in your business and doing your job for you, if you don't want the micromanaging, you have to be on top of that stuff. And again, you don't have to be a CPA, don't have to be an Excel wizard, don't have to ever touch QuickBooks, but there is in fact, let me go ahead and do a plug. doing some, do training regularly on financial literacy for nonprofit leaders and for folks who are in the Austin, Texas area.
We're gonna be doing this ⁓ through nonprofit Austin at Austin Community College. I'll share a link with you. Actually, I can share the link now in the chat, right? So.
Leya Simmons (35:47)
I just saw this. Yeah, that's very exciting.
Go ahead and
share it in the chat, but then we will make sure that it's included in the recording for those of you watching.
Sean Hale (35:57)
Yeah, so where's the, there's a chat button, right? Up at the top. Where are you? there it is, bottom right. All right, so Studio Chat, Public Chat. there are all kinds of questions in there that I wasn't even aware of that were there. All right, and so there's the link and this training, there aren't very many seats left because they're making it available for free. And so there are only 50 seats. It's at the end of March and
Leya Simmons (36:01)
There's a chat. Yeah. Public chat. There you go.
So trainings, there we go. Yeah, no, we're gonna get around to hopefully as many of these as we can. There you go, Sean, I see it in there. Perfect.
Love non-profit agencies.
Sean Hale (36:26)
I do this several times a year. Hopefully we'll do the next one virtual. Cause it's one of the, think one of the most impactful things that we can do is get our executive directors and our other leaders trained on the kind of basic financial knowledge they need to lead, not to learn debits and credits, but the other stuff that can help you be at the big kids table and be involved in these conversations and lending your wisdom and your information. Cause the board, if they're not involving the executive director, they also have some massive blind spots.
Leya Simmons (36:55)
That's
right. They're missing so much context and nuance like I mentioned before. So yeah, very important for everybody to pull up. Okay. How about this one to speak to what you do in your full-time day job is myth number seven, CFOs are only for big nonprofits. Is it realistic or smart for small and mid-size? And I mean, I might even skew on the size of smaller nonprofits to think about operating without CFO level engagement.
Sean Hale (37:24)
Yeah. So for a second, I'm going to take on the whole semantics thing that you were mentioning earlier and cause maybe some people to get hung up on the semantics of what is a CFO. so let's not, rather than that, I would say if you want to get beyond the mom and pop kind of stage of an organization, if you want an organization that's going to outlive your leadership, if you want an organization that is going to increase its impact, then regardless of whether you call a CFO or something else, having some kind of leadership.
Leya Simmons (37:30)
Please do.
Sean Hale (37:54)
in that seat is really important. And for a small nonprofit, that does not have to be a full-time CFO with a CFO salary. But very often it's going to be more than you can get from a treasurer because the treasurer is a volunteer and very few nonprofit treasurers, even if they have accounting and finance experience, they don't have necessarily nonprofit experience. And so there are fractional CFOs out there, people who you can get to work with for like
Leya Simmons (37:54)
Mm-hmm.
Sean Hale (38:23)
10 hours a month or 20 hours a month to provide that higher level leadership where you need it, whether it's helping the staff leadership and the board understand the finances more and turn that data into information and then into insights, or if it's providing mentorship to that high potential person that you hired to be your bookkeeper, but you want to see them grow into being your finance director, to have that person who knows
What to do when you get this notice in the mail from the Texas Workforce Commission or from the tax assessor or the 99 other random things that your finance administrative leader is gonna get hit with over the course of a year just because you're operating a nonprofit.
Leya Simmons (39:09)
So, I mean, in the CFO, they would also be involved in strategy as well, right? Around like creating the reserves and things like that. Is that true as well? Yeah.
Sean Hale (39:19)
yeah, yeah,
absolutely, absolutely. ⁓ so yeah, like I've built a list, it's about that long of the kinds of things to talk to your CFO or your fractional CFO about. yeah, it's especially, it is that, you know, for the organizations that are ready for that, because sometimes we do, when we're doing that kind of service, sometimes we do have to go in and help them button down a couple of things before we can move into the strategic things. ⁓
Leya Simmons (39:32)
⁓
Sure, readiness checks, yeah.
Sean Hale (39:47)
And, uh, but yeah, ideally, you know, you do have that person who is bringing financial acumen to the table in addition to your perspective as the executive director and all your knowledge of the programs and the kind of, the biggest slice of the big picture in the organization. And you have other people contributing their parts, but having somebody with that nonprofit experience and that financial acumen can help bring to light the right questions or the right insights that otherwise might not be seen.
Leya Simmons (40:15)
absolutely. ⁓ Okay, so like you said, we could live there for a very long time, but I'm to move on to my myth number eight, because we I do want to try and get to a few of these questions. Myth number eight, this one actually makes me brings to mind a tech term that we use, but the myth is we'll fix it when we grow. So you know, a lot of nonprofits will just and I mean, people I think it's human nature as well. So again, no shame here, but the wait for their wait until they're in trouble before they invest in the financial strategy or systems. And what I was saying,
Sean Hale (40:24)
Mm-hmm.
Leya Simmons (40:45)
and ⁓ in my technology world is in a tech company, we call this tech debt. So, you we've built sloppily because we were moving quickly. We knew we might break some stuff, but then, you know, you've got a lot of tech debt at some point that you've got to go back and clean up. So I imagine that the same kind of thing can hold true here. ⁓ Yeah. What's your response to that one?
Sean Hale (41:05)
Yeah,
all that deferred maintenance kind of stuff, right? Whether it's technology or otherwise. yeah, you know, there are, could talk about all kinds of red flags, but certainly one that sits heavily on me, ⁓ because I see it all the time and I've been there myself, is the burnt out financial leader in the organization. And that one is one that's really hard ⁓ for leaders to even notice sometimes, because we tend to be quiet.
Leya Simmons (41:09)
That's right.
I
Sean Hale (41:35)
We tend to not be the squeaky wheel in the organization. We're usually the last person to complain about anything. With some exceptions, we're not all the same. And so consequently, even when we do complain, it can come up.
Leya Simmons (41:51)
which you're just there like making it work, you know, like that's where I that's in my head just like right there like in the weeds like making it all work. But then sometimes it just can't.
Sean Hale (41:54)
Yeah.
Well, and so then usually in December every year, I get a couple of calls from leaders like, my gosh, our accountant just quit and it's December 15th we don't know what we're going to do because there are a bazillion things that need to happen between December 15th and January 31st that really only this person could do. And they just quit because they were totally burned out. And, you know, we, we're always happy to jump in and help in those situations. But
Leya Simmons (42:14)
end of the year.
Sean Hale (42:29)
that's a really expensive thing to have somebody come in and clean it up. And again, like we're happy to do it. There are other folks that'll do it too, presumably, ⁓ like rebuilding that, better if you can avoid that emergency entirely. ⁓ so ⁓ like keeping, developing enough of a relationship with that person that they're gonna tell you when they're getting burnt out and that you're going to hear it.
Leya Simmons (42:39)
Better if we can plan for. Sure.
Sean Hale (42:59)
when they say it because they're probably not going to say it the same way that other people in the organization will, but then also having the appropriate kind of response. And sometimes that's, you know, bringing in other help. Sometimes it's insisting they take that overdue vacation that they're needed to do. It's also making sure that you have documentation of all the key processes in place so that if they are, whether they are on the beach sipping a piña colada or if they're in the hospital with a loved one.
that you're not picking up the phone and saying, hey, Terry, I'm sorry, I know you're doing something really important, but we gotta run payroll or else people's rent checks are gonna bounce. You don't wanna be that kind of employer. But this is the kind of thing that just goes undetected for years in organizations until they land in a giant pothole. So there's my red flag, you don't even know it's there.
Leya Simmons (43:51)
It's interesting to
know and I hear you and I think it's interesting as well because I've been a part of organizations very much like that and there's this odd dynamic where
that person, the person also feels quite valuable because they know that there's these things that kind of only they know and that sort of stuff. But, the panic that can ensue if for whatever reason they have to, you know, go away for an extended period of time or they decide to quit or whatever else, ⁓ you know, just having that line of they're the only person that knows how to do it and that it's not documented somewhere should be. I think that's a big red flag also.
Sean Hale (44:26)
Yeah. And I'm going to
put a double red flag on that because, most of the time, that dynamic is happening and the accountant is kind of a willing participant, it's because they're proud of their job and they're proud to have the importance in the job security. But also it is a red flag from a fraud perspective because when that person never takes a break, then nobody else is ever running payroll. Nobody else is ever cutting checks or doing those processes.
Leya Simmons (44:39)
Sure.
interesting.
Sean Hale (44:54)
And that is one of the most common ways for fraud to come to light and for fraud to get prevented. If you know that somebody else is going to be running payroll twice a year, you're going to think twice before committing payroll fraud. Yeah, because that person might stumble upon those extra checks to those ghost workers that I've been writing.
Leya Simmons (44:58)
Interesting.
Just oversight, yeah, absolutely.
That's, I had not thought of that piece, but that's absolutely a truth. Okay, so we've got 15 minutes left and we've got quite a few questions here in the chat. So I definitely want to get to some of the comments. So I'm going to ask you about two more of my myths and I'm going to have to let the other ones go. But one is something that I've also experienced. So that's where we're going to land is the budget is the strategy. Is the annual budget a strategy or is it a compliance document for the board or where does that live according to you?
Sean Hale (45:23)
Okay.
Okay.
Gosh, yeah, well, that's your choice. And it's kind of the choice of do we wanna do it like last year, Dilly, I wrote about this recently on LinkedIn, in which case you can pretty much expect the results that you got last year and just hopefully, right, if there aren't any big surprises. Or do you wanna have an organization where your impact is growing and instead of feeding 1,000 families, you're feeding 10,000 families eventually. ⁓ And so, yeah.
that for me, that's what it boils down to. And so the budget can be, yeah, just a box you check with the board in which case, okay, but you know, it can absolutely be, and especially thinking about succession. If you want to eventually hang up your spurs and have somebody else leading the organization, then think about how the board is gonna hold them accountable. And the budget is a piece of that accountability piece. And because when the budget is done well, that's the board.
Leya Simmons (46:14)
It's a choice.
Hmm.
Interesting.
Sean Hale (46:42)
basically authorizing the executive director, go forth and do these things. That we're authorizing you to spend this money in these categories and we are expecting, because we're pairing with our strategic plan, we're expecting these specific results this year. And so now, and the upshot of doing that is that when that happens well, the board isn't in the day-to-day business, right? They shouldn't be because...
The budget has already authorized the spending and the strategic plan says what is supposed to happen with the money. And so then the executive director should absolutely be coming back at the end of the year, maybe even, you know, quarterly and saying, Hey, here's what we've achieved over the last three. Yeah. And not only like we did the 10 things we said we were going to do, but here's also, we said we were going to raise $2 million. We raised 2.1. We said we were going to spend 2.1. We actually spent 2.2, but
Leya Simmons (47:23)
against the goals. Exactly.
Sean Hale (47:37)
Here's the reason why, and fortunately we had reserves to cover that unforeseen expense. And hopefully, can I get a gold star kind of thing is the conversation.
Leya Simmons (47:47)
As I say, you're tying
a very lovely bow around this whole conversation. That's awesome. ⁓ Okay, so my last question is always the same. you could, everybody on this call, everybody watching it over the next year, if you could let them have them leave with one thing, maybe it's one thing they're going to change today, one item that you've mentioned, one thing that you just thought of that you forgot to say, what would that thing be?
Sean Hale (47:51)
Hahaha
Well, from my seat on the bus, the one that speaks loudest to me is the whole idea of I just can't understand the numbers. And I get it. So many of us have had math trauma at some point in our life, whether in the household or at school or somewhere. And that makes it hard. ⁓ you know,
But I want, if you are in a leadership position or if you aspire to be in a leadership position, I want you to be able to be at the big kids table and for the other people at the table not to say, you need to go back to the little kids table. And so getting yourself some of that financial literacy. And again, not learning debits and credits, not becoming a bookkeeper. Those are the wrong classes. ⁓ But some of those other leadership skills like how budgets work.
Why do we need internal, what are internal controls and why do we have them? How to lead a budget process, which is not about being an Excel jockey, but rather what are the processes that we have in place? So the budgeting process goes smoothly. How to read a financial report, how to get the financial report from being just numbers to these graphics that are engaging in a narrative that's engaging. What does a healthy relationship look like between staff and the board when it comes to the finances? What's appropriate and what isn't?
When you know those things, you can have a seat at the big kids table. And when you have a seat at the big kids table, you're gonna have a much bigger impact.
Leya Simmons (49:44)
Take your seat. I love it, Sean. Thank you so much. This was just a wonderful treasure trove of, I just, I so, and what I'm hearing in all of this too is how specific and unique the financials of the nonprofit, of nonprofits are, the organizations that we work with.
they don't follow the same exact pattern as other things that we might be doing when we're balancing our own personal budget or working for for-profit companies. So having that insight and understanding unique to non-profit finances is just key.
Sean Hale (50:18)
yeah, it's, you know, we've so many times gone in and had to clean up the ⁓ bookkeeping because it was set up by somebody who might've been really brilliant at like oil and gas accounting. ⁓ But you know what, the way you run an oil and gas company, it's a lot different from you run even a small nonprofit. And you might not even detect those differences while the organization is in its infancy.
Leya Simmons (50:29)
or
That's right.
Sean Hale (50:44)
But when it gets to be bigger, then all of a sudden you can't answer basic questions like, well, what does the toddler program cost us in a year? How profitable is a teenager program? Or whatever, questions that you need to be able to answer to make good leadership decisions and to make good strategic decisions.
Leya Simmons (50:57)
Mm-hmm.
So helpful. So, and I hope everybody that's on our call right now has clicked the link for Sean's, if you're in Austin, Sean's nonprofit ACC. And Sean, you'll have to let us know when you do. I'll share it on my personal LinkedIn. So, and follow Sean Hale of nonprofit CFOs on LinkedIn. I'm gonna share your contact information here in just a minute, but I do have two questions here that I wanna make sure that I get to. So one is, do you have any resources for talking to donors or writing and grant applications about the point?
Sean Hale (51:17)
Mm-hmm.
Okay.
Leya Simmons (51:32)
that having a higher overhead cost allows us to have higher quality programming? That's a great question,
Sean Hale (51:38)
Yeah, know, my gut, I'd love to hear your ideas too, Leah. My thought is I would not write about that so much and that would be more developing that relationship and having that conversation. ⁓ I know so many of us are wordsmiths. love writing that really well written thing. ⁓ But I think it's more that conversation that even brings to mind. Well, I won't go down that rabbit hole. I have a story.
Leya Simmons (51:42)
Mm.
Sean Hale (52:06)
later if we want to about conversations with current makers.
Leya Simmons (52:09)
Well,
I mean, and I agree because I grant, ⁓ you know, foundations and grantors are human persons behind the behind it all at the end of the day. And, you know, creating and developing that relationship gives you the time to create context, to fully paint your picture and to, again, describe it less in terms of overhead and much more in terms of infrastructure. Like, you know, you have a frame for a house that you build that's the same thing as necessary to have a sustainable, the sustainable being the key word organization. I mean, you know, how many
Nonprofits do we know that come and go because they had a purpose, they executed on a mission, but there was no ability, they never created or facilitated that infrastructure to have a long-term viability. So they didn't. And so when that's not what you want, I love, you kept bringing it back to that, Sean. If you really want to grow and move out of mom and pop realm, then these are the steps to take. Yeah.
That's great. Okay, so here's another one from Ellen. Myth, funders want to see an organization spending less, I've heard this too. The funders want to see an organization spending less than 10 % on fundraising and administration. Can you explain how companies ⁓ like candid or donor-advised funds, quote unquote, grade most nonprofits?
Sean Hale (53:30)
gosh, I would leave it to those organizations to explain their grading systems. ⁓ I'm sure they've written about that and I know that they have done at least some things ⁓ to mitigate the overhead myth. I don't know that they've done enough. ⁓ so, know, certainly at the end of the day, this is one of those, yeah, some funders are very insistent on all kinds of silly things.
Leya Simmons (53:33)
⁓ I don't know the exact answer there either.
Sean Hale (53:59)
And I think as a nonprofit sector, actually, we need to do a better job of one, going and having the conversation, because that's the most likely way to persuade them is to have a conversation. But then if they are not going to budge on silliness to walk away. To give an example, over the summer, of the affiliate, one of the consultants on my team, Shari Shahn said, hey, was talking with our
the organization that we're working with, great organization, ⁓ really good leadership, having a big impact, budget under a million. And they had a grantor come back to them and say, hey, we loved what you did with our grant money this past year. The grant money was for programs only, couldn't be spent on overhead or anything else. Programs only, less than $50,000 grant. And the grantor said, we loved what you were doing and we would like to renew your grant, but this year we're going to need you to also get an audit. And so, holy cow.
this nonprofit with a budget under a million, not getting an audit before, but now they have to get an audit to get this tiny little grant and they still have to raise money to not just cover the audit, but also to cover the indirect costs of this thing. And so we told them pretty much, gosh, unless you have just a big pocket full of cash that you can throw at this thing, this doesn't look like a very good bargain.
Leya Simmons (54:55)
You're not free.
Yeah.
That's that opportunity
cost in my language that you know, is this the right use of our time and money?
Sean Hale (55:24)
Yeah. you know, could you, cause, gosh, and there's another organization I was talking to last month where they had this funder telling them, you need to apply for us for our grant this year. Same kind of deal in terms of size and all the other stuff they want 40 hours worth of application. They'd gotten turned down four times and the grantor kept on telling them that like, you need to apply for our grant. Like, hell no. You've invested 40 hours each year. And then they also weren't going to cover your overhead costs. And they also want you to get an audit.
Leya Simmons (55:47)
Thank you.
No. Red flags.
Sean Hale (55:55)
walk away from that. It is
a losing proposition. And so, yeah, some of those funders are just stuck in the old way of thinking and we need to have the strength to tell them.
Leya Simmons (56:05)
As we
say in Texas, bless their hearts, but we can't keep going down that journey. Okay, well, thank you, Sean, so much for all of your insights. I've got right here your contact information up on the screen, sean at nonprofitcfos.com and questions for Better Unite, support at betterunite.com. If you've missed any of this, of course you can email support and we'll be sending out the recording.
But if you've got other questions that you want to send, send those directly over to Sean or shoot them to our team. ⁓ Sean, can't thank you enough. I'm going to plug next week quickly our 501c drop on what date is that? February 17th. It's always at 1 30 central. We've got a session just with me called Don't Start From Zero. Use momentum based fundraising to power your spring events. I've been talking about this a lot. It's frankly one of my favorite topics to
bring to the table is how can you give true legs to your spring events, keep the fundraising, keep the momentum going, and also borrow from what you've already done, what you already have, the treasure trove of data that you've got somewhere, if it's in your CRM, your database, your Better United account, wherever it is. We're gonna talk about all the ways that you can leverage all of that information, organization, fundraising, fun, and momentum into the events that you all have coming up this spring.
Scan the QR code there if you'd like to register for that, otherwise you'll be getting emails and we'll be posting about it all over the place. And then if you have no idea what BetterUnite is or what I've been talking about when I've mentioned it the few times that I have, please scan this QR code if you'd like to take a look around ⁓ and see what it is that we've been talking about.
But otherwise, Sean, just, again, I have to say thank you so much. This was just a really insightful and wonderful conversation to have, and I hope it's shared widely because this is, you know, this is the true.
like essence of what I was hoping to see with our 501c drops, you know, kind of bringing the underbelly and it's not a dirty or bad underbelly, but just these things that we don't talk about all the time, bringing them to light, having people talk about them so that we can all feel less shame and feel more empowered to make better decisions, move strategically and go help the world even more.
Sean Hale (58:23)
Thank you, Liam. It's been a lot of fun and I just appreciate what you're doing to help leaders lead better and have a bigger impact in their communities. Thank you so much. ⁓
Leya Simmons (58:32)
thank you. You're
so welcome. I appreciate it. All right, everybody. Have an incredible afternoon. Thank you so much for joining us and let's go do some good. Bye bye.