Social Impact Finance (read time: 12 min)
What types of jobs exist in finance?
Finance specific role distinctions
Finance by the numbers (pay and hours)
Learning technical finance skills
Applying for roles
Exit opportunities
Next three steps
So you want to work in Finance in Social Impact?
Accounting and budgeting can seem like a necessary evil to many people in social impact - a complex process that is required by boards, donors, and reporting requirements. But it is far more than that. At its best, finance is deeply strategic and core to the planning process of any social impact organization. The finance team works closely with the fundraising team and the leadership of the organization to inform critical decisions. Ineffective leadership on the finance team can be disastrous for an organization. If you have an interest in finance, supporting the work of a mission you care about is a great way to feel like the work you do really matters!
If this career path sounds exciting to you, this guide will take you through everything you need to know about working in finance. To inform our work, Second Day has spoken to experts in the field and gathered the best information out there for upcoming graduates and recent graduates. First, the guide will take you through the different entry-level positions to look out for in this field. Then, we’ll provide tips on actually getting those jobs in finance. We’ll finish with our next three steps: actionable items you can take to make progress towards finding your first job in finance. Let’s get started!
This guide was written by Phil Dearing in partnership with the Second Day team.
Many thanks to experts in the field who supported this work:
Aaron Alston, Revenue Analyst, Bain and Company
Anton Leynov, Senior Financial Analyst, US-based Education Nonprofit
Sheel Patel, former Vice President of Finance, The Houston Endowment
What types of jobs exist in finance?
Day-to-day roles and responsibilities of a finance professional
The role of a finance team can usually be broken down into a few key tasks or roles. At most social impact organizations, a Finance Associate or Coordinator would be responsible for some combination of these responsibilities.
Accountant and bookkeeping
This role involves tracking all of the expenses and revenue that comes in to ensure that there is an up-to-date picture of what is happening with an organization’s finances. For many smaller organizations (under $1M), it doesn’t take too long to handle all of this and so this work is either folded into an overall Finance Associate’s role or is outsourced to a bookkeeper. Critical skills for this role include strong attention to detail, familiarity with nonprofit accounting rules, and the persistence to follow up considerately with individuals across the firm to understand the details of an expense or revenue line item. If you really love this work, there are a number of nonprofit-focused accounting organizations, where you could support a wide range of organizations with their accounting.
Payroll and expenses
This role involves processing the payroll for staff and contractors, generating and paying invoices where needed, and approving employee expenses for reimbursement. Similar to accounting, this can be a full-time role for a larger organization, but often is one element of a broader role in smaller organizations. Sometimes, the payroll and benefits manager on the HR team is in charge of these responsibilities as well. To thrive in this role, it is important to be organized and proactive in communicating on potential invoices. The process of approving (or rejecting) employee expense reports can sometimes be a bit thorny. At an entry-level, you are unlikely to be in charge of writing this policy, but it’ll be up to you to implement it in a way that is flexible and kind without encouraging employees to abuse the rules.
Budgeting and scenario planning
Financial planning is a critical and often overlooked element of the finance team. Developing an annual budget informs critical decisions about whether the organization has money to hire people, provide raises, or use funds for other essential uses. It helps organizations understand which programs are sustainable to run and which might cost more than the revenue raised to run them. Additionally, scenario planning can help show what losing out on a significant grant might look like or how an organization can capitalize on a surge of donations. In short, having fluency in the current financial situation of an organization and the ability to create potential forecasts for future revenue and expenses is a vital skill for an organization’s leadership.
At an entry-level, you may be involved in coordinating with department heads and organizational leadership to create a new budget for the coming year. Often, the finance team works closely with the development team to ensure that the most realistic projections for potential revenue are incorporated (rather than hopes and dreams). Thriving in this role requires not just quantitative aptitude, but a sound sense of judgment for what is reasonable or likely. Other leaders in the organization will look to you for what is possible and so it is critical to be the voice of reason for these difficult decisions.
Grant management and support
When organizations apply for grants, many foundations or government agencies require project budgets asking what the money will be spent on and reports detailing what the money was actually spent on. This can become really complicated really fast if an organization is juggling dozens of different grants with different restrictions. Once again, this requires an analytical approach and attention to detail, along with organizational savvy to make sure reports are filed on time. But succeeding in this role can also benefit from creativity - figuring out ways to present what an organization needs to spend to accomplish its goals in ways that appeal to funders. In a perfect world, funders would just provide unrestricted funding for organizations doing critical work that they believe in, but that isn’t currently the case. Different funders really prioritize spending money on ‘program expenses,’ ‘piloting programs,’ or ‘growing proven programs.’ Your role often involves partnering with the fundraising team to fit that jigsaw puzzle of requests together to fund the whole organization.
Finance specific role distinctions
Generalist/specialist
An important distinction in finance jobs is between generalist roles and specialist roles. As the title alludes, a Generalist is responsible for some combination of the tasks mentioned above, whereas a Specialist will only be responsible for one. Depending on the size of your organization, opportunities to specialize may be available at the entry level, but most smaller nonprofits will have a Generalist Finance Assistant or Coordinator starting out. If you’re interested in eventually specializing, you might have to move between organizations if your current place of work is too small. As you move up the finance ladder to the senior levels, you’ll oversee everything, so if you have those ambitions, it’s helpful to understand each piece of finance work.
Dual roles
In addition to the Finance Assistant/Coordinator role, you might find a finance job posting where the duties mentioned above are combined with those of the HR, admin, or operations staff. This would likely happen at a smaller organization where there isn’t enough work or money to justify individual entry-level staff in each department. Starting out, these dual roles will give you an opportunity to try out each of these back-end roles before deciding on a path to pursue. However, if you take a dual role starting out, it’s important to define your tasks, and make sure you’re not taking a job that should really be filled by two people.
Finance by the numbers (pay and hours)
Finance jobs in social impact (unlike traditional investment banking) is a field where it is easier to create a work-life balance. Though some of the time will be particularly busy, the work generally revolves around a standard 9-5 workweek. There are some temporary Finance Assistant roles that pay on an hourly basis, but most other finance roles are salaried and include full benefits. The range of entry-level finance roles will likely fall between 40K and 60K annually, depending on the size of your organization. There is plenty of room for growth here, and feasible to make six figures after additional certification and time in the field.
How to get a job in finance
Learning technical finance skills
Unlike many social sector jobs, studying finance or accounting is almost always required to find a role in finance. Because there are so many rules, regulations, and complexities, it takes a while to fully get up to speed. And messing up on the financials while you are learning can cause significant headaches for the organization. Because of this, many organizations want to hire someone that has studied finance and has some experience working with organizations.
One piece of good news is that the skills built working in finance across government, nonprofits, and companies are quite similar. While there are some differences, it is relatively straightforward to shift between sectors. Because of this, one of the most common routes is for someone to start a career working as a public accountant or in investment banking and then leverage those skills for social good. However, it is also possible and somewhat common for someone to work in finance for social sector organizations and then later on pivot to the private sector.
If you didn’t study finance in college, it is possible to try to pick up the skills on the job. If you want to pursue that route, often working on a different team and proactively shadowing the finance staff for a while is the best way to pivot. However, the easiest route to pick up these skills is to do a Masters in Finance or Masters in Business Administration to more deeply study the skill. While there are online courses that teach financial skills and accounting, those aren’t typically regarded as strongly as a traditional degree. If you did study finance in school, it is usually possible to advance up the ranks without getting an additional advanced degree.
Applying for roles
Getting a job in finance is relatively straightforward. The most important element is demonstrating clearly with your resume and cover letter that you have the skills required to do the job. People with strong technical finance skills are highly sought after in the social sector and so that is a great starting point.
For a given role, an organization will often screen for candidates with the required finance background with a short work sample (to do something in excel or analyze a statement of financial position), but then the ultimate decision to hire someone is based on other skill sets. This is where networking can prove quite valuable. When given the choice between hiring someone that they have met and liked that is qualified vs someone else, most organizations go with the person that they are comfortable with. Beyond the technical finance skills, you’ll often want to focus your resume and application on a few key qualities and skills.
Past relevant experience
As mentioned above, the most critical thing a potential employer wants to know is whether you can do the job. If you can point to working at past internships, managing club finances, or doing relevant projects at school, it can help instill confidence that you’ll be able to do the job. A note on club experience一make sure to note how much money you were responsible for managing as a treasurer or club president. You can impress here with a big number! For an even more applied experience, you could consider volunteering your time to support the finance functions of a social impact organization.
Mission alignment
Working for a social impact organization brings together many people who care about a social issue and want to make the world a better place. If you can persuasively speak to why you care about the mission of the organization you are applying to, this will help you stand out. Even if it isn’t directly tied to your work day-to-day, an alignment with the organizational mission will help you go the extra mile and stick it out through good times and bad.
Reliability
In a finance role, the organization is counting on you to get stuff done with limited insight into your progress over time. That means that you need to be good at managing deadlines and holding yourself accountable to make sure things get done when they need to be done. Highlighting your past experience and skills of reliability, project management, and organization will help you stand out.
Data visualization
An emerging aspect of finance roles is using data visualization tools like Tableau and Power BI to share more insight into an organization’s finances. For other teammates that are less comfortable with spreadsheets, using these tools can help make sharing insights easier. While this isn’t yet a requirement for most roles, building a basic familiarity with these tools and bringing them with you to your job can really help you stand out as a strong communicator.
What about volunteering?
A finance skillset is one of the most valuable for nonprofit organizations. Particularly for newer and smaller organizations, the price of hiring an accounting firm can be prohibitive. If you are willing to volunteer a few hours of your time each month to an organization to help make sure their financial reporting is working, it can have a huge impact on that organization. Websites like Catchafire and Taproot provide a platform for skilled volunteers to match with organizations. This skill set can also be quite valuable to promote if you are interested in serving on a nonprofit board. Most organizations want at least one director who can confidently support the organization’s financial reporting. Even just a few years of work in public accounting or corporate finance can help make you very helpful to a nonprofit if you are willing to roll up your sleeves and help out.
Exit opportunities
Moving up the finance ladder to become a VP of Finance or Director of Finance is one of the clearest paths upward of any function in social impact. While a Director of Finance can make $100,000 or more at a large organization, the gap between pay in the social sector vs private sector tends to grow as you become more senior. This is a huge bummer but it also means that relatively senior leaders in the social sector are in short supply. Many organizations are willing to bring on a younger leader into a very senior position if you have a strong track record of performance. If you are the most senior finance person on your team, you’ll be in charge of working closely with the organization’s leadership to lead the organization forward. Strong fluency with finance will also position you to potentially step into a COO role if that is an interest of yours. If that is something you want to pursue, you can proactively look to build expertise in other functions of the organization (programs, HR, operations).
For some folks, climbing the ladder isn’t appealing. Many professionals are ok serving as a finance manager or controller for organizations一a well-paying and predictable role. Other folks start their own bookkeeping/accounting firms or shift into the private sector for higher salaries. Alternatively, going to grad school can be a way to pivot into another field or focus entirely. No matter what path you choose, the finance skill set will serve you well throughout your career.
Next three steps
Develop a finance-specific cover letter and resume to highlight your skills.
Consider volunteering or launching a project that builds more demonstrated experience in finance and accounting
Consider taking a course in data visualization to distinguish yourself as a candidate
Last updated: July 2021