- newsletter
- Academic Update

Creating a not-for-profit accounting course
A practitioner-turned-professor explains what’s wrong with not-for-profit accounting education and what she did to fix it.
Related
CPA licensure program off to ‘promising’ start
Why are there fewer accountants? What the research says
Preparing accounting students for a career in CPA financial planning
Kristine “Tina” Caratan, CPA, CGMA, is living proof that accounting in the not-for-profit sector can be a fulfilling and profitable career — “doing well by doing good,” as she puts it. She helped build a $3 million not-for-profit book of business at one firm and then set out with her sole practice specializing in consulting to not-for-profits.
But when she started teaching at San Francisco State University in 2011, she faced a stark realization: There seemed to be no courses focused on the not-for-profit work that was so central to her working life.
Too often, she realized, not-for-profit accounting was getting minimal attention from academics, and it was ignored by students who saw it as an unprofitable dead end for their careers. So, Caratan set out to change that — and in 2019, she created SFSU’s first academic course focused exclusively on not-for-profit accounting, which she has taught at SFSU and at her alma mater, Santa Clara University.
Caratan agreed to a Q&A with Academic Update to share her practical insights for developing the not-for-profit accounting pipeline. This interview has been edited for length and clarity.
Let’s set the stage. When you started teaching, how was not-for-profit accounting perceived by your students and the profession at large?
Kristine “Tina” Caratan: In general, the not-for-profit sector is not well understood. It’s often misconceived by the profession as being a sector of the economy that pays poorly and has limited to no need for high-end accounting. Meanwhile, for students, it gets combined with a course that emphasizes government accounting standards, which are totally different.
How would you describe the current educational approach to not-for-profit accounting at most institutions?
Caratan: There is little to none. And if a university does have a class with a not-for-profit component class, it’s combined with a GASB class, generally. The textbooks are literally written for GASB. The people who tend to teach those courses used to be government auditors and accountants. When there is a reference to not-for-profit in these textbooks, it is typically to health care and higher education, which are sectors of themselves.
Six percent of the GDP is not-for-profit. The likelihood is high that a student is going to either work for a CPA firm that audits not-for-profits or ultimately be on a not-for-profit’s board of directors. They actually might work for a not-for-profit, or they will volunteer for a not-for-profit. I really do believe that not-for-profits get a short shrift. It’s just so unfair.
You have a plethora of arts organizations, social service agencies, and other important (and large) organizations — and donors are very particular about where their money goes. This is important work. Donors who are giving at the higher stratosphere want to make sure their money is being spent appropriately, and wisely, and on the purpose for which they gave it.
When did you decide to try something different?
Caratan: In the SFSU graduate program, there were several courses that, for lack of a better term, were generally the same course material that some of the MSA (master of science in accounting) students had taken as undergrads. And so, I said, “Why don’t we teach a new class?” And I called it “Advanced Topics in Not For Profit Accounting.” I had help from professors at the university to maneuver through the “system.” The premise was to allow the SFSU undergrad accounting majors to have some new material in their fifth year. The first time I taught the class was the fall of 2019.
What was the initial reaction from students? From your peers?
Caratan: My first class at San Francisco State University had, I think, 11 students, which for a graduate course was very good. There are several students from that first class whom I’m still not just in contact with, but have gone into not-for-profit and are calling me for advice and counsel.
Students at Santa Clara University are a little different. Ninety percent of their accounting grads go to the Big Four — but I did leave a kernel. My course was picked up by another instructor this past winter term with 16 students enrolled, up from the 11 I had in Winter 2023. He told me it was as advertised by me — plug and play!
What are some of the most significant curriculum differences for a not-for-profit course?
Caratan: It’s really a financial accounting course with an industry specificity. So, it’s debits and credits, with significant focus spent on revenue recognition, which is different for not-for-profits. Donors give with purpose, they give with time parameters, they give planned gifts — are the resources received income or not? If revenue is not recognized properly, the rest of the accounting will be incorrect by default.
What advice would you have for someone who wanted to do something similar?
Caratan: First, you need department support, and ultimately, you’re going to have to have the dean’s support. When you’re building a case for the course, it might help to market it broadly, beyond just future accountants. At Santa Clara, I thought we could target a business minor who had a major in arts and sciences and who has a career goal to be either director of development or a CEO of a not-for-profit. How smart would that be for them to take a course like this? This strategy likely would not work at a large state university.
What other strategies would help to get students interested?
Caratan: The instructor needs to find experts to guest lecture. It’s an opportunity to introduce students to experts outside of public accounting and outside of finance. I invited CPAs that specialized in not-for-profit tax and CEOs into my classroom.
One tax expert is a partner in a boutique CPA firm in San Francisco. My other tax expert does tax strategic planning, philanthropic planning for the uber wealthy. My CEO guests would speak to the importance of the CEO/CFO relationship.
I also had students do hands-on work, including a financial analysis and risk analysis (a paper!) — ultimately asking, “Why would anybody donate to this organization?”
The students, I feel, learned a great deal. If there’s one thing I learned in 11 years of teaching: Students don’t necessarily like just being lectured to; they really do want to see the real-world applications.
What do you tell accounting students about what to expect from an NFP accounting career?
Caratan: You don’t necessarily have to start off in not-for-profit, but you should never count it out. It starts as simple as being a volunteer. And then there’s service on boards. You’re a financial person, they’re going to want you — and if you don’t know anything about how the accounting works, what good are you? I’m pretty blunt and plain.
I remind them that you have a lot of Baby Boomers who are retiring, and they’re in every industry out there, which is creating a shortage of people. This mass retirement is compounded with the pipeline decline at the university level. The accounting firms are doing everything they can to keep a larger percentage of those new graduates. And so the corporations aren’t able to hire to their needs. Governments and not-for-profits are at the end of the food chain but are realizing they need to pay more competitively. The bottom line I tell students — their talents are needed everywhere!
— Andrew Kenney is a freelance writer based in Colorado. To comment on this article or to suggest an idea for another article, contact Jeff Drew at Jeff.Drew@aicpa-cima.com.