Storytelling with Financials - Stephanie Skryzowski

8:34PM Jun 9, 2021

Speakers:

Julie Confer

Becky Endicott

Jonathan McCoy

Stephanie Skryzowski

Keywords:

numbers

nonprofit

organization

stephanie

cfo

donors

budget

finance

create

important

people

growing

podcast

financial

audited financials

virtuous

good

conversation

question

fundraising

Hey, I'm john.

And I'm Becky.

And this is the we are for good podcast.

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So let's get started.

Welcome, everybody. How are you back? Well, I'm just thinking about you know, we don't often go into the ops world of nonprofit and there's a reason because john and i do not feel comfortable speaking into that, but we know how important and absolutely essential it is. Collect people that love

it, though. But here's

the thing today, everybody is we found a unicorn, we found a unicorn, who can story tell with numbers, and I am so excited to have this conversation. We have Stephanie's Krzyzewski on the podcast today She is the founder and CEO of 100 degrees consulting, and I am just loving the conversation we're about to have and I hope that people who are listening will get a mindset shift of how do you interpret your financials? How do you use them to make your organization stronger? But how do you make them not boring? I think Stephanie is just about to infuse a whole bunch of energy into this conversation and want to dive a little bit into your background. You're a visionary Chief Financial Officer. She's been helping purpose driven leaders better understand and use their numbers to make smart decisions to grow their bottom line in their impact. So within her company, She's the founder and CEO providing financial strategy and bookkeeping services to business and nonprofits around the globe. She's a good friend of one of our former guests Skyler, bad knock with Hope for Haiti. And they both work together at build on which is such an amazing organization. But we're just really pumped to have this conversation with you. You are not just a numbers cruncher. I mean, you are going in and having the tough conversation and illuminating what we can do to really storytel what what is our impact? What do these numbers mean? And why is it important to organizations? So Stephanie, thanks so much for being on our show. We're so glad you're here.

Thank you so much for having me. I love that intro. That was great. Thank you. I'm

very curious about your background, as I always am with financial genius minds who come into the nonprofit sector. Can you give us a little bit of background and tell us about your journey?

Yes, so my journey might be a little surprising, actually. because ever since I was about 12 years old, I thought I wanted to be a lawyer. And not just not like a, you know, nonprofit, social justice type lawyer, like a corporate lawyer in a big city and wearing this fancy suit. And that's what I thought I wanted to do after I visited a courtroom on a field trip when I was 12. So I actually started to pursue that dream after undergrad and worked at a massive law firm in Times Square in Manhattan, and realized very, very quickly that it was 100%. Not for me, I was not aligned with the values of the clients that I had to support and help. But the problem was, I didn't know what I wanted to do instead. But I had the great fortune of working with a partner at the law firm who had actually founded a nonprofit and this nonprofit was helping farmers in Afghanistan, rebuild their farm businesses after their land had been decimated by like decades of war. And they were specifically working with women, lots of widows, and helping women create sort of micro businesses within their home so that they could go sell their fruits and vegetables in the market and make an income for their families. And so I eventually ended up leaving the law firm and working full time for this nonprofit. And as I think we all know, I was an operations manager, which means you basically do everything, like literally everything. So I was like stuffing envelopes for mailings. I was planning fundraising events, and I was doing the bookkeeping, the financial reporting, and I just latched on to that. I'd always been very good at math growing up, but I didn't want to be a math teacher and I didn't really know what to do with numbers otherwise. So I really, really latched on to that. And that's kind of where my career grew from. I ended up getting my master's degree in nonprofit management and with a strong focus on finance, and then went on to work for a build on as an international finance manager and eventually the CFO of a build on Before I started the business, so I feel like it was sort of a winding path that led me to where I am now that I definitely did not start out thinking, Okay, I want to manage the numbers of a nonprofit, but it was just like so perfectly aligned for me. So that's, that's how I got here.

Well, I think there's something so great about your story. And I love that you were in this, this role of operations manager, we've known lots of those. And I feel like we, we never had that title. But we kind of stepped into a nonprofit where we had to all of a sudden wear all these hats. And it is the best growing and the worst growing at the same time,

painful growing, but the needed growing, like nobody

really wants to have to do all of those things. But doing so gives you this perspective that I know is got to be serving you so well. Because when you can zoom out and understand really the power of what you're trying to accomplish and understand all the inner workings, you can start aligning pieces. And I think that has got to be what is just part of your storyline today of like, how can you take something that maybe on the surface level feels like it's in a different department than fundraising? Which is some of the back end numbers, crunching aspects? And how could you actually use that to thread together to build this more robust story with our donors and our board and our staff. So I'd love for you to kind of talk a little bit about that.

Yeah, it's so true. And I feel like finance is the one of the you know, few departments that really touches everybody in the organization. And, you know, we're sort of like at the at the hub, like everybody needs things from finance, and we need things from everybody else. And so I feel like the finance department is just so central. But what I often see happen is that it's not really like, in reality, it doesn't really happen that way. There's always, you know, better relationships and better, you know, work that can be formed between finance and development. And sometimes there's just not that alignment there. So I really think that Yeah, being able to see and understand the needs of each piece of the organization, but coming at it from a lens of the numbers is so important. We can, we can help the development team figure out, Okay, what does it cost to, you know, to operate like one unit of program, whether it's, you know, one child served, or one, you know, one year of schooling or whatever, like, we can crunch the numbers that help the development tell their story. On the program side, we can help crunch the numbers to figure out, Okay, if we want to, you know, achieve this programmatic goal, here are the resources that you need to be able to achieve that and then communicate that to the development team on the fundraising side.

So we're kind of like, weaving everybody together with that lens of the numbers, I just think it's a very fascinating way to disrupt the numbers game in the nonprofit, because I have to tell you, as you're talking, I'm visually going back in my mind to sitting in a boardroom listening to our quarterly board meeting, it's time for the financial talk. And it's like, here's the, you know, here's the balance sheet. And here's the income statement, and we're talking profit loss. And it's like, we never talk about what that means. And we have almost programmed our board members to not ask questions beyond that, you know, I mean, we've we've programmed them to just look at the bottom line and see, where are we? Where are we growing? Or like, what's our number at? Are we in the black? And it's like, no, the numbers tell an incredible story. And, you know, I remember a time and, john, I don't remember if you remember this, but we had talked about how do we put an impact number on what we're doing, because that's not really going to be represented, we can talk about it a little bit in the divestiture back into the organization. But even the number of that doesn't talk about the human imprint. And so I really think that this is an interesting conversation about how do we use finance to reshape the way we talk to influential people who are part of our organizations, whether it be the board, whether it be, you know, a major donor, and I even think of like, you know, like investor like I, what am I trying to say, it's Angela Jackson, it's the venture philanthropy, you know, if there's somebody that we're trying to prove that we have big dreams, and we need someone to buy in, they're not going to understand our dreams at all by looking at a balance sheet. So I think that this is a really great tip about why we need to have incredible partnerships with our ops teams to be able to interpret the numbers of what we're seeing and what we're experiencing within our organizations. I'm wondering if you have an example of an organization or a client that has really done this well, and and use their numbers to tell this really great story.

Yeah, you know, I have gotten asked this question before and it's funny that you had Skyler bad knock of Hope for Haiti on the podcast because Hope for Haiti is such a good example. Full of using their numbers and just being very transparent about their numbers, and I always specifically go back to their annual email that they send after they get their audited financials back. They like actively, like proactively share their audited financials with their entire donor base their entire email list. And while tons of organizations get audited, we all get our audited financials back, not very many, like proactively share those results. And I love that because it just really does breed a sort of culture of transparency. And they add a lot of a lot of story into those emails, which I really appreciate, because the audit is such a big part of so many organization's operations and the things that just you know, that are part of like our sort of annual cycle of managing and managing a nonprofit, but not many proactively share those results. And so I love that, and I encourage all of our clients to do that, like, let's put together an email where we're talking about the results of our audit, we're sharing, we're like attaching our audited financials or sharing the link to them, so people can actively go look at them, because that's really, really important. So that's one example that I love to share.

anytime anyone loves on Hope for Haiti, and I would totally, it's a good day and to who would send their audited financials. Right. It's their base. I mean, and I, I would be very curious to know how that's positioned and how they get people to care about that, because I think that is a really disruptive, like, amazing tactic right there way to go for Haiti. Oh, really agree.

Stephanie, could you break down some steps, if somebody is wanting an organization's wanting to step into this, they you know, right now, it's really two separate departments, the development side, from the ops side, they're not really commingling, and really working to the full force, what some practical steps to start, you know, incorporating numbers into how we talk about our work and our impact.

So I think that it really all starts with the annual budgeting process. Oftentimes, what I see is the finance team doing the budget in a vacuum, more or less, based on our numbers last year, okay, let's maybe add 5%, here at 10%. Their finance team does the budget, hands it off to the executive director gets approval from the board, it's done. I like a much more collaborative and inclusive approach to budgeting. And the other thing I see a lot is like, we're only budgeting for expenses, we don't have a super concrete revenue plan or revenue budget. And so it you know, the budgeting process should be very inclusive and include the development team from day one, both on the development team expenses, as well as the revenue like what is our fundraising plan? What are our goals, let's not just say, okay, we want to raise $5 million this year, let's map it out by source by month. So that that is all part of the part of the process. And so once you kind of start there, then, you know, you are coming back to this forecast every single month. And this is a, you know, sort of joint effort between finance and fundraising. And what I what I really like to see, and I don't see very many organizations doing this is forecasting on a regular basis. So we have the budget at the beginning of the year, the budget doesn't change. But every single month, we come back to this forecast. So we're inputting our actual numbers from last month, and then we're looking at the rest of the year again. And so as things are changing, maybe you know, particular Foundation, you know, you had initially budgeted for August. Now you know what's going to come in October, so you're updating that monthly. And so that's a great way for development, and really all of the departments of the organization to partner with finance. So at any given point in time, you have this crystal clear snapshot of what your whole year is going to look like from the numbers, both your actuals and your projections. So I think it starts with the budget and then it sort of continues through this monthly forecasting process.

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Really like the inclusivity piece because any knowledge is power, and it's like a development officer could be out in the field. You know, they could be visiting with a donor they could get a curveball question about something occasionally, you know, I would get those questions about not specifically about the budget, but I would get questions about what is our impact and how How are we funded and what's the rate of return and they in some donors are just savvy enough to talk about CTR D and cost to raise $1, and things like that. But I will even just share a personal experience that I had that was so helpful with our prior organization, they had set up, the organization kind of put this tactic or the strategy in place culturally across the organization that says we're all going to have morning huddles, and we had to put something together for which was like a huddle board. And we populated all of our numbers in it. And every Monday, well, one, we would get together every morning and just chat at our doors as a group in a circle and just say what's going on today who has anything big that they need to elevate, but on Mondays, we dove into the numbers. And I have to tell you, the amount of eye rolling that I probably had inside my head that we were going to do this, at first was like, Oh my god, but I have to tell you, it was one of the greatest things to happen to us collectively, because all of a sudden, I knew exactly where we were all the time. You know, if I was in a board meeting, I could speak to that if I was out in the community doing something, I immediately knew our numbers. And it wasn't like, I just knew the major gift numbers, because that's where I knew the annual giving numbers. I knew where we were on our budget, I knew where we still needed to go to get more proposals in. And it's just a very empowering thing when you have that level of knowledge. And it makes the organization so much more homogenous, I think about just our operations team, who are managing numbers they're getting to hear On the flip side, you know, who we're meeting with, and what the donors are saying. And that gives them confidence and strength to know that, you know, they're supported in a way and they could answer a phone and speak to a donor about these kinds of things. So I just think this concept of owning every part of your business and allowing people to speak into the parts that they're contributing to is a really, really great tip. No, go ahead, please. Yeah, and, you know,

I talk a lot about I do this talk storytelling with financials. When I talk about, like, why is it important to be transparent? And I always ask the question, like, do you share your numbers with your team? Like, does your entire organization know your numbers, and pretty much nobody does like nobody is sharing their financials with their team in a meaningful way. And it's so important, because I really believe that when you're more transparent about your numbers, both to your donors, of course, but also internally, like that's really important, that breeds greater ownership, like when people know those numbers, they feel a greater sense of ownership to contributing to them and to contributing to the greater good of the organization. And that leads to greater engagement. And obviously, we want our donors to be more engaged with the organization. But we also want our staff to be more engaged. And so as a development officer, even as you know, a program coordinator, like they are more engaged, like what can I do to further the mission and further the financial health of the organization. So I think across the board like that, that transparency is just so important.

I love that it also connects to some trends that we've seen and I've, I've seen whenever within nonprofit, too, is just, sometimes you can get a really wonderful major gift. And that maybe helps you get to go for that year. And you don't notice the fact that you're actually dramatically under in the number of donors that you normally have, or the number of gifts. And so you may feel really great about the fiscal year, and you don't even realize that you're behind until a year or two later down the road. And it kind of moves your eye off the prize. But so by being really connected to the numbers, like you are just much more recession proof if you have an understanding of what's happening and how we're, you know, what, what's driving the numbers that you're seeing. So I love that we're advocating more people being honed in on that preach. Okay, Stephanie, you are an entrepreneur. Extraordinary. Let's be clear. And you've launched a new podcast recently, the 100 degrees of entrepreneurship. We you know, last was at first season or second season, we went through an entrepreneur series on our podcast, because we believe there's so many mindsets and hacks that are just natural to entrepreneurs, that are void and much of nonprofit. And so I'm sure you feel very much the same way of that. What are some you know, techniques or things that you coach your entrepreneurs that come to you for counsel? What are some of those hacks that you would love to see the nonprofit world embrace?

How am I Gosh, and abundance mindset? I feel like often, especially in the budget creation process, we nonprofit professionals often come to it from a very scarcity minded place like okay, we can raise $2 million this year. Let's try and cram in as much as we can into the expense budget to like do as much as possible with as little money as possible. So we we are Thinking about it all wrong when we're budgeting on the nonprofit side of things, rather than, okay, let's think about what is the impact that we want to have this year? Let's create our expense budget based on that impact. So, okay, we want to, you know, serve this many students. Okay, well, how many? You know, how many people do we need on our team? What supplies do we need? What other resources do we need, and then build our fundraising plan from there thinking like, the sky's the limit, right, like verse that's, that's more of an abundance mindset versus trying to cram as much as possible into our expense budget. And so that's something that I really encourage all the time is like, let's think about what is actually possible. Rather than coming at it from like, Oh, we got to scrimp and save here, we got to cut that expense there. So it's that it's that abundance versus scarcity, that I feel like entrepreneurs, we feel like the sky's the limit, anything is possible, like the opportunities are limitless. And I would love to see more nonprofit leaders embracing that. And, you know, the episode that you all did with Dan plata a few weeks ago that I felt like just blew my mind, because I'm like, Yes, this is what I'm talking about. This is what I'm talking about. So yeah, that abundance mindset for sure.

Oh, that was so good. And you know that we talked to Vic Harrison, a couple weeks ago. And she said the exact same thing. She talks about nonprofits living in a poverty mentality, which creates a starving mindset, you know, when you're living hand to mouth, and I think that she's probably even talking about, like, from a financial standpoint, you know, that, you know, that does not create a, it doesn't cast a vision for you to grow in a very big way. And I, you know, we did, we also did an episode on abundance mindset, we did a whole mindset, Friday convice conversations, I think in the first season. And there's something about, you know, if you can't figure out any of the tactics and nonprofit, I think half the battle, is mentally getting yourself in the mindset game of looking at things differently, questioning things that have always been done before. And I think that that naturally leads itself to sitting down with your operations manager, and just having an honest conversation, just like you would with a donor. Honestly, I think that was such a good tip of what you said, because I have always wanted to sit down maybe with an operations manager and say, you know, this is what I'd like to do. Or maybe it's my boss, I want to do X. I know, we don't have enough money for that. But how can we get there? Are there are there things that we could do to shift the budget so that we could achieve x because I think it's really important. That is a mindset shift that I never, ever considered when I was in nonprofit. And I wish I could go back and employ it differently, because it probably would give me and the nonprofit license to dream and have some creative capital to go and try some new things. Thank you. Thank you, Stephanie, for giving us the permission to go out there and dream. Yes, please. I am really curious as you work with nonprofits, like just around the world, and you have all of these great lenses into the the missions, and the things that they do to help improve our world. What's a story that you've been able to witness of philanthropy that's really stayed with you? Yeah,

I have a light bulb moment that I come back to anytime I have a challenging day. And my sort of lightbulb moment, and for me, it was just like this moment of crystal clarity that like, this is what I was put on this earth to do. I was in a field in, in Afghanistan out a couple hours outside of Kabul, and we were inside the home, like sort of like the home compound of this family, that our organization that worked in Afghanistan had helped. And we had provided education to this woman to help her build and grow I guess, this thriving garden. And I didn't have I didn't have a very strong translator with me. So the my translators English was was not very good. And so we were kind of all just, you know, standing there looking at each other looking at these beautiful vegetables on the ground. And this, this woman who was probably in her 40s motion to her child to do like pointing towards the ground. And so he pointed out, he reached down and grabbed a cucumber and picked a cucumber and ran away and came back and the cucumber was dripping wet. So he had just washed it and he handed it to me and she motioned to me like, eat it and it's like, okay, so just take a bite out of this cucumber right out of the ground and her smile and her eyes were just beaming like, she was so proud. Of what she was able to create, am I gonna cry right now, thanks to the support that she had received from this organization, and she was a widow. And she was supporting her elderly parents as well as several children. And she was able to take her vegetables to the market to sell them to help provide an education and food for her family. And that I was like, This is it, this is this is why I'm here. And the fact that I am able to contribute in like, the tiniest way to something that is so life changing for this family and so many others, was just that was like my lightbulb moment. And so even if my piece is, you know, I didn't help her plant the garden. But I was helping make sure that this organization was financially healthy and sustainable, so that they could be around to help her. That was my that was my moment of philanthropy and my lightbulb moment that I just come back to again, and again and again.

I mean, it's broken record time, but for me, but it's like everybody has something that they can give, to make the world better, you could be the most incredible accountant in the world. And somebody needs that gift. And the fact that you could bring a service to bear that would lead to a moment where a woman is so proud of herself, you know, to be able to extend this sustenance to you and this nourishment and something that took a lot of her sweat and toil. What a gift.

You know, one question before we kind of start to wrap this up your website is beautiful, by the way, check out your website, so well done. But I do think you know, you're really encouraging nonprofits to invest into hiring a CFO. And I do think that that is a different mindset to bring in a CFO than to just bring on a bean counter. You know, would you talk a little bit about the importance of that, and what that role, like the distinction is, and why nonprofits should make that investment, whether it's contract work, or however it would work or actually full time hiring somebody? Yeah,

so I think that you know, the difference between having a bookkeeper and having a CFO, I get this confusion a lot, because a lot of times you think if you hire a numbers person, they're gonna do all the things. But a bookkeeper is really that person who is kind of in, you know, QuickBooks or whatever you're using in the day to day make sure things are accurately coded and reconciled. And we're following all the rules. And that's very, very important. But what they are not doing is giving that strategy and analysis and taking those numbers to the next level. So taking the income statement, taking the balance sheet, interpreting that and using that to help shape future decisions, and help shape the strategy of the organization. And that's where a CFO comes in. And I was given the advice A long time ago, or sort of given this, you know, a CFO helps you see around the corner. And so what I think the value is that often I see a lot of organizations without a CFO, like there's not really any long term financial strategy or planning. We're not making decisions based on a forecast. We're not doing any type of financial modeling. And so that's what a CFO is going to help you do. Like, you know, especially if you're at a fork in the road, okay, we, you know, want to grow our programs this way. And, you know, we want to tackle this problem as well. Like, can we do that? What does that make sense? What does that look like? And so a CFO is going to help you run the numbers to crunch the numbers basically, to help you make decisions based on those black and white numbers. And so I think that's where, you know, the difference is between a bookkeeper and a CFO. And so, while I believe that every organization needs a bookkeeper, like we need to make sure our numbers are good and correct, and timely and accurate. The CFO is really going to help get an organization to the next level through that sort of strategy and analysis and financial planning and modeling.

Thank you, CFO.

We need a CFO around here.

I'm not it 123 that's all I don't want me to Stephanie. Yes, we need we need to Stephanie. And I'm really curious to know what your one good thing is. This is something we ask all of our guests, and something tells me that Stephanie is about to throw down something incredibly practical that everyone can relate to. What's your one good thing, Stephanie.

So I believe that what you focus on expands. That is a mantra that I have up in my office, and it's something I share with our clients all the time. And what I mean by that is that a lot of times we shy away from our numbers, we don't like looking at our bank balance. We're scared to look at our income statement. And so we just avoid, and I like to think that what you focus on expands so as you are focusing on your numbers, they are going to expand we're sending good energy to our numbers. And so in return, they're going to excel And and so I always encourage, you know, if you've been hesitating look at your bank balance, look at your income statement and make it a monthly routine. So I, you know, I just really believe that your your money, your numbers, your finances are a super important part of your monthly routine. So if they aren't already. That's my one good thing.

There's your permission with a little bit of Woo, which I appreciate.

And could you do? Just a little bit? Yeah. And I feel like I need to confess that I haven't looked at my online banking in like four years. I'm like, Kyle's got it. So I will take that directive. And this week, to Kyle that's very organized, very organized.

That was a great one good thing. Well, Stephanie, you were doing so many amazing cool things in the world. How can people connect with you and everything going on at 100 100? degrees? Not 100?

That was so Oklahoma 100. What we ain't saying it right?

Yeah, so my website is 100 degrees, consulting calm. So you can find out anything you want about me and my team and the work that we do over there. And honestly, I would say that place on the internet, where I hang out the most is Instagram. So I'm over@stephanie.sk r y, and, and my podcast 100 degrees of entrepreneurship. So if you just look on wherever you listen to podcasts, you should find that there as well.

And I'll give a little plug for Stephanie's website, she's got an incredible tool on there, where you can download a powerful forecasting template to help you create a roadmap to build sustainability and grow your impact. So if this is a conversation that's really resonated with you, and you're ready to dive in, head on over to Stephanie's website, download that template and it will get you go and

when you listen to her podcast, tap the rating and review behind it really does help. That's

one nice thing we can say. Please give her a nice couple stars. If you loved it. It goes a long way.

Give her five stars not a couple. Okay,

give me a couple as you possibly can. Thank you so much. Yeah, it was it's been a delight to meet you. And I feel like I've learned so much.

Thanks so much for having me. This has been great.

Thanks for listening to today's conversation with Stephanie diving into storytelling with financials. You probably hear it in our voices, but we love connecting you with the most innovative people till you achieve more for your mission than ever before. We'd love for you to join our good community. It's free and you can think of it as the after party to each podcast episode. It's our own social network and you can sign up today we're for good comm backslash Hello. One more thing if you liked what you heard today, would you mind leaving us a podcast rating and review means the world to us and Your support helps more people find our community. Thanks friends. I'm our producer Julie Confer and our theme song is sunray by Remy force boom thanks for being here.