This Industry Outlook is a portion of the 2018 Arizona CFO Spotlight Survey Report
The 2018 Arizona CFO Spotlight Survey attracted respondents from a number of industries in Phoenix and Tucson. We will highlight the not-for-profit & government segment here in terms of growth, risk factors, strengths and trends.
A variety of community outreach, research, academic, associations and charitable organizations responded to the CFO Spotlight Survey for the third year in a row. This group is the largest sample for 2018. Two-thirds of organizations are in Tucson and one-third are in Phoenix. Not-for-profit and government revenue expectations lean toward optimism compared to a year ago, with almost 59% expecting a slight increase and about 22% expecting a significant increase. More than 90% of CFOs believe the economic climate is good in their home city and statewide. Their concerns center on improved education long-term to provide a skilled workforce, changes in federal leadership and an uncertain tax structure. Due to this uncertainty, optimism among leaders in government entities has been fairly flat over the past three years.
CFOs in not-for-profit and government are much more sophisticated about the need for communication through social media than they were two years ago.
With labor costs posing the largest expense for not-for-profits and government, leaders are looking for ways to maintain existing staff while dealing with the increased costs of health care, minimum wage laws and new sick leave pay. One CFO noted a change in full-time equivalent employees to offset increases in health care costs. Top employee benefits are health care coverage and training, with less regard to nonmonetary benefits like flexible schedules. However, managing change hinged on managing the expectations of staff. Leaders acknowledge a culture shift in their organizations due to the influence of millennials, and they actively make accommodations for a diverse workforce moreso than in other industries. They also focus on leadership training to manage uncertainty.
Continuous innovation is a high priority along with reputation management. Most CFOs note improvements in internal controls and accelerating their technology investments. Almost 43% of CFOs are managing cybersecurity risks through active disaster planning. About 64% have updated their security protocols in the past year. Consumer confidence is less of a concern for these leaders, compared to the last two years, but access to federal funding and cash management is of high concern. With leadership transitions well managed, these leaders are focused outward on quality outcomes for their stakeholders. Getting up to date on social media is one method they are using to enhance their reputations. Leaders would also like to see IT improvements across the state to support business growth.
"We are focused on multi-scenario budgeting."
Average Number of Employees
Revenue in 2018
- 22% Will increase significantly 22%
- 59% Will increase slightly 59%
- 20% Decrease slightly or significantly 20%
Top Areas of Focus
- Internal controls
- Information access
- Continuous innovation
33% very optimistic
46% somewhat optimistic
Access to Cash?
not too concerned
86% very little impact
53% some impact
100% offer it
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