The value of ‘connection to the mission’ for one not-for-profit CFO

Calvin Harris, CPA, the CFO of the National Urban League, is the Journal of Accountancy podcast guest for a two-part conversation this week. In this first part, Harris explains why the National Urban League was well positioned to receive an increase in donations at the onset of the COVID-19 pandemic in 2020, what the organization did with that revenue, and how he approaches retention and development of employees. Here’s the second part of the interview.

Also, get caught up on recent JofA coverage of not-for-profits’ focus on technology investment and learn more about research showing why CFOs “should learn to let go.”

What you’ll learn from this episode:

• Why Harris considers “connection to the mission” to be vital.
• The reasons donations to the National Urban League increased during the pandemic.
• The importance of having the fundraising arm and the accounting arm in alignment at a not-for-profit.
• How not-for-profits can retain and develop their employees.

Play the episode below or read the edited transcript:

To comment on this episode or to suggest an idea for another episode, contact Neil Amato at Neil.Amato@aicpa-cima.com.

Transcript:

Neil Amato: Now on the Journal of Accountancy podcast is Calvin Harris. Calvin is a CPA and serves now as the CFO of the National Urban League. Let’s get right to the interview. Calvin, welcome to the podcast and first, tell me a little bit about the National Urban League. I believe it’s an organization many people have heard of without knowing much about what its mission is.

Calvin Harris: Well, Neil, first, thank you for having me on. It’s a great pleasure to chat with you again. National Urban League has been around since 1910. We’re getting ready to celebrate 112 years of existence. We began here in New York, but we have 90 affiliates all around the country with a focus on African-American and other urban residents.

Our focus is on economic self-reliance, parity, power, civil rights. Our focus has always been on that space. Whether we’re talking about job creation, job development, training, education, pretty much anything that would help support both the African-American and urban residents throughout the country.

Amato: You’ve been the CFO there for about three years. What has been the effect of the Great Resignation on your organization?

Harris: Our organization has certainly not been immune to that. But I think compared to what I’ve seen with many of my peers, we’ve actually come out quite well. I think that really goes to the heart of the organization. So many folks are here with a strong connection to the mission. I certainly fall in that bucket.

I don’t think anyone should think that they’re necessarily immune, but we’ve come out pretty well, all things considered. Like so many other organizations, we’ve been both in and out of the office during the pandemic. We’re currently out. We’re about to go back in as we’re recording this, but we’ve been able to pivot pretty well throughout. The resignation hasn’t really affected us as much as I admittedly was worried about when it really began.

Amato: In the pandemic, donations at many not-for-profits have declined, but for yours, that was not the case. First, tell me how that unfolded and then how it led to creating two new divisions at the National Urban League.

Harris: I think when we go back to 2020, it’ll be one of those years for as many things that were going on, it’ll be one that we talk about, I think, for many years to come. For us at the Urban League, we went to a remote status in March, I think like many other places did. We switched from in-person to remote in March, and I was a bit concerned because so much of our finances and our programs are based on us being in-person. Whether it’s in-person events or in-person things at our different local affiliates.

I would say for the first two months of being remote in the pandemic, it was doing a lot of right-sizing, looking at the budget, seeing what we might have to adjust here and there. The PPP funds through SBA came up; we had applied for those, had received those. Then what happened right around Memorial Day, late May of 2020, we had a lot more attention paid to, I would say three specific cases in no particular order: George Floyd, Breonna Taylor, Ahmaud Arbery. All happened around the same time.

Now I would certainly say that such crimes, for lack of a better word, have happened for years. But they got the attention around the world. Right at that moment, when let’s say the Black Lives Matter movement really got a lot more attention in the consciousness, we saw a bit of an uptick, a bit of a change there.

I think what it really shows, though, is that there are certain organizations that were already doing the work for years before there was a lot of attention to it. National Urban League was absolutely one of those organizations. We were well positioned to support those who wanted to do good. If someone hadn’t previously been that active or that involved and they say, “OK, what can I do to support communities?”, we were right there waiting to make sure we could do that support.

That support also led to I’ll say an expansion of work we were already doing and what we call equitable justice. It’s a place we were already operating, but it was very clear there was a desire to do more, so we have a division in there. Also, and I don’t think this would be terribly surprising, we had already been doing some work in health, but identified it as something that needed a lot more attention. As you might imagine, much of the health work has focused on COVID, whether it’s vaccine hesitancy, vaccine awareness, just health over across the board.

In many ways, I know I call them new areas and new departments of the organization, but they’re really not new focus areas as much as realizing that the world that we were in then, and the world we’re still in, really required us to have dedicated resources focused on those areas.

Amato: That revenue increases, how do you then forecast it for the future? Because you said in a previous discussion, “the normal models aren’t very good right now,” but you have every reason to believe, I guess, your floor has shifted higher.

Harris: That’s been an interesting, yet admittedly more enjoyable, process than what it began in the pandemic. What we found very important is just making sure that we have complete alignment between our fundraising team and my team on the accounting side. We were already pretty well connected. I think what you’ll find at so many NGOs and not-for-profits, that they’ll be most successful when the fundraising arm and the accounting arm are walking [in] lockstep.

In many cases, that ended up being the real secret. It’s not a secret, it’s just to make sure you have that real clear alignment between your fundraising, your development team, and your accounting team, and it will work wonders in being able to forecast. So even when we thought about events, whether we would do certain events or not do certain events, whether it was remote or blended or in-person, we would make sure that there was complete alignment between what we thought the spending would need to be and where we thought the fundraising development arm would be.

That’s been our way of really making it through, because that’s how we’ve had to forecast. It’s a bit more granular, but it’s been one of the ways we can make sure we can still be reliable in what we forecasted out.

Amato: In general for not-for-profits, what steps can they take to make sure they’re holding onto and developing their employees?

Harris: That’s such a great question. I would say that the general parts for not-for-profits will be different than no other organization. I find that employees want to feel valued, and being valued, it can be a lot of different things. It can obviously be compensation, it can certainly be flexibility in terms of work style and work mode, particularly in this sort of situation. There are some people who are challenged, have health challenges even, in working in-person during a pandemic.

But I think where that appreciation is felt and where that value is felt, you see that will help in terms of holding onto employees. I’ll certainly say, and this certainly applies to me, I was lucky enough early in my career to realize that being with an organization where I felt completely connected with the mission was important. That’s been a valuable thing.

I’ve worked at different types of organizations. But there was that consistent through line that I had a personal connection to that mission. I think you’ll find that to be a very common thing in the not-for-profit, NGO, higher education world as well, to where any supposed sacrifices they may make on other parts, that mission connection often will help bridge the gap. I think that’s just vital.

Amato: That’s the first part of our interview with Calvin Harris. The second part can be heard in the next episode, coming up on Thursday. In other news, the Journal of Accountancy‘s Ken Tysiac has coverage of a not-for-profit benchmarking survey from the firm BDO. Not-for-profits were forced by the pandemic to change the way they offered services and sought donations. They also invested more in technology. Six in ten respondents said they accelerated their technology investments in 2021, and 64% said that they planned to invest in new technology.

Also, Gartner research from 2021 underscores the need for CFOs to be decisive in shifting investment to high-value uses. CFOs who exert influence and lead their organizations to quickly let go of lower-performing legacy business lines are more likely to add value to their companies’ bottom lines.

We will link to the articles covering those topics in this episode’s show notes. This is your host, Neil Amato. Thanks for listening to the Journal of Accountancy podcast.