The Conundrum of Small Non-Profits and the Small Accounting Professional

One of the topics that comes up often when talking to clients and other accountants is, the accounting service problem that small non-profits are facing.

They need help from tax and accounting professionals. They can’t (or don’t want to…) pay full price. So they seek out affordable accounting pros. Most of the time these accounting pros are small operators such as me.

The small accounting pro takes on the work and gives a discount. Then after a few years of this, the accounting pro ends up firing the nonprofit, and the nonprofit is often confused about why.

Several nonprofit board members from various organizations have told me it’s getting really hard to find accounting help.

“You’re not the first accountant to help for a few years and then cut us loose” is something I’ve been told.

“It’s getting impossible to find affordable accounting help,” is another thing I’ve been told.

Another time someone said I “abandoned” and “flaked” on the nonprofit “just like the last accountant.”

I’ve talked to a few small accountants who say they go through the same emotions as me: they want to help, but have ended up firing the nonprofits they’ve been working with, and not taking on any new nonprofit work.

Larger accounting firms typically will still work with nonprofits, but they make it clear that they bill nonprofit work at full-price at the corporate/business rate.

So, small nonprofits need help, they don’t want to pay full price, and accountants who will meet their price expectations are becoming harder for these organizations to find.

The problem is real, I don’t know what the solution is, but blaming the accountant is the incorrect response!

So here is the accountant’s side of the story.

How it Begins

Here’s the typical way it goes: the director of a nonprofit will call me because a client of mine who is a board member told the director “Jason can help, and he’s really cheap. He’ll give you a discount.”

The director asks if I can, “pretty please, help the organization with things such as bookkeeping, 990 preparation, or financial statement preparation. And pretty please, we are a small organization and can’t pay full price for accounting services so can’t you do the work at a discount?”

The Accountant’s Side of the Story

For years and years and years, I went along with this, helping every nonprofit that came my way, and giving discounts.

I would charge $25 here, $50 or $100 there, even if those charges were 1/2 to 1/4 or less of what I should have been charging. And this was okay when my business was smaller and I had time (and mental energy) to give away.

But here’s the reality from the accountant’s side: nonprofit work is HARD, just like everything else these days in this field. And nonprofit work is also WEIRD and doesn’t fit into the same box as most of the other stuff we work on.

So I am doing the nonprofit’s weird and complicated work at a discount. And in order to get this work done, I must set aside other projects that are more in my wheelhouse AND THAT I AM BILLING AT FULL PRICE.

After awhile it becomes unsustainable to continue doing this.

I have been cutting loose nonprofits over the last 12 months, and not taking on any new nonprofit work.

Which is sad, because I want to help nonprofits.

I don’t like my annoyance level with nonprofit work. I was talking to another small accountant recently, who was going through the exact same emotions. They, too, were cutting loose nonprofit clients and not taking on new ones, and they felt guilty about it just like I do.

We agreed — we want to help, but it’s becoming hard for us to do so.

So, nonprofits are finding it hard to find affordable accounting help … but us accountants who potentially could provide the affordable help are finding it hard to justify working with nonprofits.

Most of Us Really Do Want to Help!

Nonprofits do good work and I want to help.

But I am not on your board.

I am not a volunteer of your organization.

(Note: I have served on numerous boards in my adult life, and have been in leadership positions including president and vice president on every board I have served on, so I understand the small nonprofit side of the story too.)

As a small accountant, my rates are already low — mine are 11% below the Midwestern average. My fees are more than fair already, which makes it hard for me to justify giving a discount on an already-way-too-low price.

The work we do, from tax preparation to bookkeeping to payroll or financial statements or whatever, is stressful.

The level of difficulty rises literally every day. And then the nonprofit comes along, with work that is totally different from what we normally deal with but which is just as difficult — and we are expected to give a discount.

Do you see what the problem is here on the accountant’s side?

How a Non-Profit Can Help the Accountant

  • Be kind to the accountant and understand the world we live in.
  • Remember that YOU are a nonprofit … but I AM NOT. If I give discounts to everyone who “deserves” one, I GO OUT OF BUSINESS!
  • When work is being done at a discount, there will always be a priority battle with work being done at full price. And eventually the “full price” work will win out.
  • I have a limited amount of mental energy BECAUSE THIS FIELD IS HARD. Complicated work being billed at a discount will be the first thing on my chopping block because I am not being fairly compensated for the usage of my mental energy.
  • Understand that almost all smaller accounting firms are probably charging a fair price to begin with.
  • If the fee really is too high for your organization to afford, take a closer look at whether you really need a professional to help or if it’s something your board can do itself.
  • If you really want accounting work for free or at a discount, try to find an accountant who is willing to serve on your board, as treasurer let’s say, and who can do the work as part of their treasurer role.
  • But also understand, sometimes we have insurance or licensing concerns that may prevent us from serving in that capacity on your board.
  • And as I said earlier, I am not on your board, nor am I a volunteer of your organization. Maybe someday I will become one, but that needs to be MY decision, not you drafting me into service.
  • If you find an accounting pro who will meet your price needs, work with them to set clear expectations of what you need and when it will be done, and do not pepper the accounting pro with “other things” such as “by the way, we need you to come to the board meeting tomorrow so you can explain this to the board,” or other last-minute things.

I hope this post can start a dialogue where the nonprofit side understands where the accountant is coming from here, because clearly there’s a problem, but I am not sure what the solution is.