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From the moment Chris Whitfield stepped into the CFO office at MANA Nutrition, it was clear to him that various snags in the organization’s information flows were keeping the not-for-profit’s board members on edge. To remedy the situation, Whitfield reformulated the not-for-profit’s approach to reporting, beginning with a beefier balance sheet instead of the slimmed down Statement of Financial Position on which MANA had relied to date.
“It was clear to me that we had to begin reporting on our performance back to a pretty savvy board of directors just as any for-profit company would,” says Whitfield, who also sought to give the board greater visibility into the ebb and flow of the not-for profit’s working capital. “I realized that we could not behave like a not-for-profit that relied on giving and charitable donations, but instead had to rely on our own wits and ability to raise capital through beneficial investment or normal credit channels,” Whitfield explains.
After a few tense meetings–where some pointed questions lingered–Whitfield began to adopt the tools needed to routinely output the reports required to satisfy MANA’s board and at the same time draw the more capital-intensive parts of the organization closer to his finance team.
“We now plan to routinely engage our operations management in the budgeting process,” explains Whitfield, who says that MANA’s operations people began collaborating more closely with finance a year ago, when the organization adopted a cost center reporting process. –Jack Sweeney
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Guest: Chris Whitfield
Company: MANA Nutrition
Headquarters: Matthews, NC
CFOTL: Tell us about your arrival and what your initial priorities were . . .
Whitfield: While we are not-for-profit, and we are very much a mission-based company, we really try to behave more like a for-profit company. One of the things that I stepped into was a situation where there was a little bit of a crisis of confidence between executives and the board of directors that really revolved around the lack of reporting and information back to the board.
So one of my number-one priorities coming in back then was to really take a financial reporting function that was inaccurate, incomplete, and really not very timely and to turn that around and make it one that really gave the board of directors the information that they wanted to effectively govern and provide oversight for the organization.
I mentioned that we are a mission-based company and we are not-for-profit, but we certainly monitor our overall financial strengths in terms of how much equity we have. Because even though we’re not-for-profit, you’ve got to have what in not-for-profit circles people would call net assets that give you the equity to provide working capital for inventory and accounts receivable and things like that which normal companies have, as well as capital expenditures.
But we don’t have shareholders in the typical sense. We like to kind of turn that around and say, Well, we do have shareholders–we really view our shareholders as the kids that we serve, kids suffering from severe acute malnutrition. So as we think about things like how strong we are and how we are doing in terms of building our strength financially, we also look at taking that strength financially and reinvesting it in the form of what we would call dividends back to our shareholders, that is, the kids that we feed. And that dividend really manifests itself in our number-one mission, which is to lower the overall cost of providing the treatment for severe acute malnutrition.