The Challenges And Wins Of A Non-Profit CFO

Leading the finance function in a non-profit, public/private partnership enterprise can be a challenge. A late 2022 survey found that the percentage of non-profits with more than four months’ operating expenses on hand is down to 72% from 81% in 2021, while a combination of a tight job market and concerns about a possible recession has forced organizations to both spend more money on salaries and devote more effort to fundraising, which can come at the expense of core mission. CFOs in the non-profit world have many of the same constraints and demands as in the strictly private, for-profit sector – but also have to navigate politics and relationships with donors to ensure ongoing funding and support, while thinking of ways to diversify away from pure donor funding.

I recently spoke with Cecilia Kelly, who is CFO of the Dr. Phillips Center for the Performing Arts in Orlando, about how she successfully made the switch from the for-profit world to what was at the time a strictly donor-funded institution, that she helped build into a public/private entity with profitable revenue streams and what skills CFOs at this type of organization need to utilize. Ultimately, says Kelly, the non-profit CFO has to imagine what will drive new revenue and appeal to the public as much as the finance leader in a profit-focused business: “We continue dreaming of ways to increase our impact with the best spaces, technology and experiences to solidify our position as a global destination.”

Jeff Thomson: The CFO’s role in a non-profit corporation like the Dr. Phillips Center for the Performing Arts encompasses traditional CFO functions like revenue management and financial oversight, but also overseeing the philanthropic aspect of the organization including fundraising and donor relations. How have you evolved as a CFO to meet these responsibilities? What role does your Board of Directors play in strategic planning and ensuring the organization stays on mission?

Cecilia Kelly: Prior to becoming CFO of the Dr. Phillips Center, I worked in the for-profit world. The Dr. Phillips Center has the complexities of an operating entity, with added non-profit missions. When I joined in 2007, we were in the planning phase, with construction commencing in 2011—we only had philanthropic funds. Our team benchmarked similar centers, researched best practices and planned operating approaches.

My focus is strategizing how to accomplish goals, in operations and community-based activities, understanding our environment and anticipating unknowns. I am passionate about our business and mission – it brings joy to guests, students and our stakeholders.

Working with President & CEO Kathy Ramsberger is another factor in success. I believe an effective CFO must be a good listener – listen to ideas and consider avenues to accomplish them. We encourage collaboration amongst all colleagues and that starts from the top.

We have an entrepreneurial board of community leaders from a variety of sectors. We have been board-advised, staff-led in operations from the beginning. The board is engaged in planning efforts and strategies for future goals. While they provide oversight, one of the things I admire about them is the trust they put in our team to stay mission-driven.

Thomson: In the face of economic uncertainty in which the arts are often deprioritized by donors as well as patrons, how do you work to ensure sustainable profitability across the organization’s lines of business? What role does new technology and other types of business innovation play in keeping the Dr. Phillips Center and its mission of providing artistic value to the community thriving?

Kelly Business innovation is key for us. Covid gave us a glimpse of economic uncertainty, and the industry is still experiencing change. The pandemic caused immediate shutdowns. Shortly after we created the Frontyard Festival, a socially distanced outdoor venue with QR code service. We introduced the first touchless security system in the southeast across entertainment venues, allowing our community to experience entertainment and cultural arts safely. While it was a measured risk, the Frontyard Festival provided sustainability, community support and positive reception from existing and new audiences. We’ll continue to enter new areas of business and engagement on local, national and international levels.

Our goal has always been to evolve and create a place where everyone feels like they can be part of the arts culture, and we have so much more to accomplish. In 2022, we opened Steinmetz Hall, one of the world’s greatest acoustically remarkable concert halls, and soon we’re opening Judson’s, a 150-seat, cabaret-style space. We are reimagining our 9-acre campus plan, to include three state-of-the-art theaters, a 10,000-sf immersive space and a residential tower.

Thomson: Your organization depends on the support of political leaders as well as the donor community in achieving financial goals and remaining operational. How do you communicate with these various stakeholders to ensure they stay engaged? How does the finance team contribute to strong stakeholder engagement? What can CFOs at for-profit businesses learn from your experience overseeing the financials of a public-private partnership?

Kelly: We strive to be a devoted partner in all relationships we are engaged in, from our staff and our donors to our city and county leaders. My decision making process demands I understand both the political milieu and the outlooks of our donor family. As a public-private partnership, we have many stakeholders at the local, state and federal levels. We are actively engaged with our partners at the city of Orlando and Orange County, including both mayors sitting on our board.

With all our board members and community supporters we strive for a culture of transparency, which builds strong relationships. When we talk with our board and committees of the board, we always look to provide them with the information they need to make their decisions that will help further our goals and mission. As a hands-on CFO, one of the practices I find most valuable is talking with our guests and participating in our community events and mission programs when possible.

I am convinced that the key to our success thus far is that our executive team is in constant communication and aligned with the same vision, mission and goals.