Connective Support Society’s CFO Emily Pagdin shares her CPA insight on how to level up a not-for-profit’s funding stack and non-traditional skills that CPAs can bring to the table to help NPOs thrive.
When not-for-profits (NPOs) build an effective funding stack, it enables them to reduce risk and achieve stability and sustainable growth. Emily Pagdin, CFO at Connective Support Society, recently shared her CPA insight on how to level up a not-for-profit’s funding stack, plus some non-traditional skills that CPAs can bring to the table to help NPOs thrive.
What drew you to working with not-for-profits?
Emily: It’s not so much about the sector – it’s about the people. I joined Connective to work with CEO Mark Miller and his team and contribute to their mission to provide housing, outreach, employment, and community-based programs. There’s no shortage of need across society for the services that NPOs provide and they’re a significant part of Canada’s economic engine.
Are there any unique CPA career opportunities at not-for-profits?
Emily: I’ve found there’s a lot of flexibility in what you can do and how you can do it. There’s also plenty of opportunities to make change; the sector is quite disaggregated and there’s room for consolidation of services and organizations. Strategizing about how to help NPOs grow and provide more services to their clients is also a focus. As a CPA, if you’ve got some governance experience and people skills, it’s also a great space to see your impact through the organization’s focus, whether that’s on humans, animals, forests, or another area.
What skills do CPAs need to excel in the NPO sector?
Emily: Leadership and people skills are key. You’ll be working with people whose mission isn’t financially or business motivated, so you need a human-focused skillset that includes an enhanced capacity for storytelling, strategy and vision, as well as creativity.
What’s top of mind when building a not-for-profit’s funding stack?
Emily: There’s a lot of space to make an impact by taking what have traditionally been business tools and applying them to the funding stack in the NPO sector. For example, if you’re a registered charity, you can apply legal structures and tools that are used elsewhere, while still preserving your charitable status. If you have a more complex legal structure – let’s say your organization is structured to house a charitable status entity, a nonprofit entity, and a corporate entity – consider how you hold assets and liabilities across your layers, and how you can bring equity in from third parties to help drive growth in service delivery through housing or other assets.
There are no guarantees around government funding, and as a result, NPOs need to look at their funding stack and ask questions like “How can we operate with less funding? Where can we look beyond our balance sheets to current asset values? How do we leverage or re-leverage our assets to provide more services?” Using business tools and legal structures is an exciting opportunity to do meaningful work in this sector, but it will take the right people to identify them and use them effectively.
Can you share an example?
Emily: You are likely to see historical book values for real property amortized on a balance sheet, which is not helpful for board- or governance-level decision-making. They likely won’t receive that information on a traditional financial report. It’s about looking through the balance sheet to say: “What are our assets and their current value? Take that building you’ve owned for 30 years. How could it be safely and effectively re-leveraged to deliver greater services across a greater area?” At Connective, we recently re-leveraged buildings that had been sitting mostly fully owned, which allowed us to redeploy that capital via purchasing more real estate to use in delivery of more services across BC.
What role do relationships play?
Emily: Internal and external partnerships are critical. For example, I’m mid-development on a new funding stack approach; I’m working with an outside agency, Purppl, on social impact investment to bringing equity and provide leverage for growth beyond debt. I’ve approached this project in a human-centered way: Who are the people who already know how to do this? How do we learn together? How do we tell the story about this more complex funding stack to our board, executive team, and funders to get buy-in? The storytelling capacity allows folks to engage with a new initiative without just seeing risk. To do that well, you need to build your relationships and trust.
Read more
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What social impact finance tools are NPOs using?
Emily: Community bonds are one. Essentially, community members are asked to invest at a lower-than-market rate, which still provides a reasonable return on investment, so that an NPO can use those funds to do really great work. Organizations like Indwell in Ontario have done amazing campaign work with these. Another tool is BC’s Thrive Impact Fund. People can invest funds with social impact in mind, accepting a reasonable rate of return in exchange for a secure investment that is also doing good through social impact investing.
Any advice for future CPAs considering an NPO career path?
Emily: Try to be sector agnostic, look for organizations that inspire you, and try to work with the right people – they will shape the types of decisions being made and the organization’s focus. The key is asking: “What kind of people do you want to work with, and what kind of impact do you want to have?” I’ve never had so much fun at work as I’m having now, and I’m answering deeper and larger questions than I ever had a chance to do elsewhere.
Leah Giesbrecht is a communications specialist at CPABC.
