Building a Finance Function That Grows With Your NGO
- Ritu Jain
- Apr 29
- 4 min read
Lessons from working with 100+ NGOs at over the last 15 years at Aria CFO Services
At Aria CFO Services, we’ve had the opportunity to work with 100+ NGOs—ranging from large to small, with geography spanning urban to rural, with focus on national to grassroots level. If there’s one thing we’ve consistently seen, it’s that the Finance Function is often the most under-invested function, especially in the early years of an NGO’s lifecycle.
It’s completely understandable—when you’re focused on the impact and outcomes, field operations, managing programs, raising funds, and building your team - the finance often becomes something you “figure out as you go.”
But here's what we’ve learnt from our deep-rooted experience: the way you set up your finance function can directly impact your ability to fundraise and build trust with donors, grow, and stay compliant. In that sense, it’s a mission critical function.
In this blog we intend to:
highlight How it usually Starts for an NGO,
discuss Core Competencies and Human Resource requirements
How It Usually Starts: One Person, Many Hats
In the early stages of most NGOs, one person—usually an accountant—is expected to manage everything:
It’s a lot. And while it might be manageable for a while, as the organization grows—more programs, more donors, more reporting requirements—this setup starts to crack.
You may start seeing:
Delays in compliance filings
Inaccurate and/or late reports to donors
Struggles with resolving audits queries
Difficulty creating budgets or forecasts
Frustration among program teams
This not only creates stress internally, but it can also hurt your credibility with donors, and limit your ability to take on new opportunities.
Is all this starting to sound familiar to you?
What If We Reimagined the Finance Function Early On?
Instead of waiting for things to break, what if NGOs were supported from the beginning with a clear understanding of what a full finance function looks like? Even if you don’t have the resources to hire for every role upfront, just knowing what roles should eventually exist can help you plan better and avoid common pitfalls.
Here’s What an Effective Finance Team Looks Like (Eventually):
Chief Financial Officer ('CFO') – The Financial Navigator
This person leads the finance function and ensures it’s aligned with your vision and growth. The CFO works closely with leadership on:
Financial planning and risk management
Strategic decision-making support
Donor relations and board-level reporting
Building financial sustainability
Whether in-house or outsourced, full-time or factional, having strategic finance guidance will be a game-changer.
Head of Finance – The Process Champion
Reporting to the CFO, this person ensures that day-to-day operations are compliant and running smoothly. They oversee:
Legal & Compliance
Accounts
Finance Operations
They’re the go-to person for audits, donor reports, and financial processes.
Legal & Compliance Team
Responsible for staying on top of all the regulatory and donor-related requirements:
FCRA, Income Tax, GST filings
Statutory audits
Legal paperwork and contracts
Board meeting minutes
Organizational policies
4. Accounts Team
Handles the core accounting tasks:
Day-to-day bookkeeping
Bank reconciliations
Expense entries and verifications
Maintaining vouchers and records
Payroll processing
Project-wise accounting
5. Finance Operations Team
Supports internal teams and ensures that financial systems support your impact:
Preparing budgets and tracking actuals
Donor-wise reporting and utilization certificates
MIS reports for internal decision-making
Budget support during proposal submissions
How Many People Do You Need?
There’s no magic number. The size and shape of your finance team depends on:
Core competencies within the team
Size and number of programs you run, locations and field office requirements
Number of donors and frequency of reporting
Overall volume of transactions
Future growth plans
The key is to plan roles, not just people. That way, you know which hats are being worn today, and when it's time to add new heads!
Solutions can take many forms — building an in-house team, outsourcing parts or all of the function, engaging committed advisors or board members, or a mix of these. There’s no single path, but a structured approach is critical: clearly define roles and responsibilities early, even if one person or an external partner covers multiple roles at first.
Initially, many NGOs benefit from a lean model — for example, combining outsourced CFO support with an internal accountant. As the organization grows, adding finance operations staff, strengthening compliance capacity, investing in simple finance tech, and eventually hiring a Head of Finance becomes essential.
Phased hiring — starting with critical roles and scaling up as complexity increases — ensures the finance function grows in step with the organization’s needs. A well-structured finance team builds donor trust, improves decision-making, and frees leadership to focus on mission and impact.
Final Thoughts: Build for Tomorrow, Today
Your finance function isn’t just about numbers—it’s about trust, transparency, and readiness for growth.
At Aria, we believe that every NGO—regardless of size—deserves to have a finance function that supports its mission. With the right strategic and operational guidance, you can move from a reactive state of doing things, to being a more proactive organisation. You can change your narrative from a compliance-driven to strategy-driven organisation.
If you’re unsure where to begin or feel like your current setup is holding you back, we’d love to have a conversation. We’re here to help NGOs like yours build a finance function that grows with you.
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