Is nonprofit financial management right for you?

Many people gravitate towards careers in finance because, put simply, they like money -- not just managing and investing it, but also earning lots of it. Finance is a lucrative business, with financial managers typically raking in an annual $114,785, according to CBSalary.com.  

Of course, there are other motivations. Financial managers for nonprofit organizations might derive satisfaction from keeping a food pantry in the black or setting up an endowment for an art museum. These types of jobs generally don't pay as much as their for-profit counterparts, but some nonprofit financial managers find that their work offers rewards greater than money.

That's not to say nonprofit salaries are always shabby. Especially at larger nonprofits in big cities, like New York, Los Angeles or Chicago, salaries can run higher than six figures. Even at large or well-established nonprofits in smaller cities, the pay for finance officers can be on the higher side. For example, Rebekah Children's Services, an adoption and foster care agency in San Jose, Calif., was seeking a director of finance with a salary in the $75,000 to $90,000 range, according to a recent CareerBuilder.com listing. 

An overview of nonprofit salaries is available in a report from the Bureau of Labor Statistics, a division of the U.S. Department of Labor. Workers in nonprofit business and financial operations earned an average $26.49 per hour, according to the report. That was higher than in state government, where they made $23.16 per hour, but about the same as local government, where they made $26.79 per hour. Private industry, of course, provided the best earnings: an average $30.35 per hour.

Of course, that 2008 report doesn't reflect the wage freezes and layoffs that came about as a result of the recession. It's worth considering, too, the vast and diverse landscape of American nonprofits. The nation had 1.64 million nonprofits in 2007, according to the Bureau of Labor Statistics' report. These included a wide range of organizations set up for charitable, educational or other public-service purposes. Under the Internal Revenue Code, more than 25 types of organizations fit the definition: arts organizations, veterans groups, food pantries, universities and credit unions, to name a few. Along with religious organizations, they are exempt from paying federal income taxes.

Within these basic guidelines are many variations. Some nonprofits are huge (Harvard University, St. Jude Children's Research Hospital), while others are tiny, with shoestring budgets (the Ethiopian Community Association of Chicago). Many small nonprofits have only one or two staff members, who must become versed in financial management or at least basic bookkeeping in order to properly track any donations and earnings.

Working for a big nonprofit much more closely resembles working in finance for a for-profit organization. They may work as controllers, who prepare financial reports and forecasts, or as treasurers or finance officers, who direct budgets, oversee investments and strategize to meet financial goals.

If you believe in the nonprofit's mission, and you're able to work effectively within its organizational structure to achieve results, financial management in the nonprofit arena can be very satisfying. And well-run organizations sometimes offer professional perks such as flexible schedules to make up for the lower pay. But nonprofits have their challenges, too. Working in any capacity for a nonprofit that is financially struggling or poorly organized can lead to burnout and low morale -- and  without the generous paychecks you'd take home in a for-profit job.