Case Study: Child & Family Network Centers

Empowering Children, Strengthening Communities


Industry: Nonprofit, Education

Child & Family Network Centers (CFNC) was founded more than thirty years ago to fill a need in the Alexandria, Virginia community: providing preschool education and support for families of those who otherwise would not be able to access the benefits of early education for their children.

To address this need, CFNC provides free preschool education to economically disadvantaged families, many of them from immigrant families where English is also a second language in the home. More than 130 children are served through CFNC’s unique, neighborhood-based model in which the organization’s eight classrooms are decentralized across the city through the utilization of small donated or rented spaces in neighborhoods where the need is greatest.

CFNC closes a gap between services provided by Head Start (which is limited to serving families whose household income is below the poverty line, those who are homeless and those receiving public assistance) and the options available through private schools and early childhood centers. In addition, CFNC provides wraparound services for parents and families, supported by a social work team and health assistance including developmental screenings and support.

The results of the CFNC approach are clear: Children who complete the 10-month program typically begin below the national standards and end the program operating at two times the national average. This is even more remarkable when considered against the backdrop of CFNC’s student community: children whose families are from more than 25 different countries and 9 different languages spoken.

The greatest challenge organizations like CFNC face is, not surprisingly, fundraising. Even though CFNC and most of its peer organizations receive some funding directly from state and local government, those funds are nowhere near sufficient to cover the cost of the operation, and in fact these sources are shrinking dramatically in the era of fiscal belt-tightening and ever-increasing competition for municipal funds. Added to this is the shift in the fundraising environment, where fewer and fewer major corporations are making large nonprofit donations and sponsorships, leaving nonprofits to replace one former large-dollar funder with multiple small-dollar ones just to stay in the same financial position.

As a result, two priorities become clear for nonprofits such as CFNC. First, funds must be committed sparingly to support operations and overhead, and administrative costs need to be kept low even as greater efficiencies must be achieved. Second, maintaining an accurate and precise accounting and fiscal operations must be an essential core competency.

For CFNC, these priorities presented an opportunity to migrate to a new model that reduced costs and improved both efficiency and transparency. After maintaining a full-time CFO on staff for many years, CFNC leadership recognized that the investment involve was high and yet transparency and accuracy were low. As a result, the organization looked for a new approach.

LTBD provided the opportunity for CFNC to outsource the accounting function, taking it out of the hands of one in-house individual and migrating to an outsourced accounting team, one that could act both efficiently and impartially to produce precise, accurate reports and give both staff leaders and board members greater insight into the financial health of the organization. “LTBD really opened up the books to help us see what we were spending money on, while giving us greater transparency in our financials,” says Lisa Carter, Executive Director. In addition, LTBD migrated CFNC from FinancialEdge software to QuickBooks, a move that improved standardization and enabled CFNC to generate stronger and more timely reports.

To support CFNC, the team at LTBD provides a combination of remote and on-site assistance. A member of CFNC’s assigned LTBD team comes in once per week, while other members of the team work remotely on an ongoing basis. In addition, Tim Hawkins, who leads the CFNC account team for LTBD, serves as an outsourced CFO and works with the board and executive director regularly in that capacity. “We used to have a CFO, staff accountant and administrative director working on the financials,” Carter adds, “but now LTBD can do in one day what three in-house staffers struggled to get done in a week…and they were full-time.”

By enabling CFNC to focus on its core competencies of service delivery, nonprofit management and fundraising, LTBD delivered a far greater level of professionalism and precision to the accounting function, while achieving this in a cost-effective manner and without the challenges and risks associated with in-house hiring and management. Especially in areas such protecting cash flow, creating realistic budgets, maintaining accounting systems and delivering actionable reports, LTBD had a transformative impact on CFNC’s operations.

Concrete results achieved include going from an aging A/P of 270 days down to Net 30, and eliminating a longstanding need for short-term loans to cover seasonal cash-flow shortfalls. Most significantly, bringing on LTBD allowed CFNC leadership to shift its focus from reactive, crisis-driven management to emphasizing proactive, strategic objectives — all of which will be essential to protect and strengthen CFNC’s future. “We love working with LTBD,” concludes Carter. “They’re smart, they know what they’re doing, they bring positive energy and a can-do-spirit to their work, and the result has been a really great working relationship. We highly recommend them!”