Meeting New Challenges

The pressure for greater accountability has nonprofits looking to software for solutions.

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The trickle-down theory has been linked to the Republican Party's view of economics. This year, trickle-down applies to the push for greater corporate accountability and the way it affects non-profit organizations. "We've seen more interest in software this year than in Y2K. The interest is mostly because nonprofit organizations want to provide the right information and reports to their boards," says Gary Garnet, executive vice president of Farmington, Conn.-based Digitech, an affiliate of Kostin, Ruffkess & Company.

"There's greater pressure and accountability is trickling down to not-for-profits. They're looking for software to give them piece of mind," agrees Tom Thornton, director of product management for Sage Software's MIP product line.

That pressure has vendors and accounting, reselling, and consulting firms alike on the lookout for ways to transform this push into software that can solve the NFPs' problems.

Partner Insights

Going International

Pat Lavine will go a long distance for a nonprofit deal-to the other side of the world in fact. About 35 percent of revenue for his Brownsville, Texas-based Lavine BMC Technologies comes from other counties, including places as far a field as Guam and the Marshall Islands.

Lavine sells the Sage Software MIP product line to his nonprofit and government clients, some of which is in conjunction with another Sage partner, Jesse Toves, owner of Premier Business Solutions, located in Hagatna, Guam. The two met three years ago at a Sage reseller conference.

One international engagement was for the Community Action Agency in the Republic of Palau. The primary operation of the agency was the Head Start Program and the main problem was reporting.

"They were using Great Plains and needed the kind of reporting that MIP provides. We installed MIP Nonprofit Series Pro, which provides the reporting required by Head Starts. MIP also established payroll tax tables that met the requirements of the Taxing Authority of Palau. This allows the agency to process payroll with the MIP system," says Lavine.

Overall, the implementation took about three weeks to a month with some follow-up in process for changes in reports. The project cost approximately $35,000, which in addition to software included travel cost, regional training, and remote sessions.

"Most international governments are oversold with systems such as Oracle and J.D. Edwards, and MIP fits better. It also helps us to work with people in positions to recommend us and spread the word about our services," adds Lavine.

One sign of the interest is last fall's 34-city tour in which Microsoft Business Solutions and key resellers spent $2 million promoting Great Plains' nonprofit modules. The Fargo, N.D.-based company teamed up with their partners focusing on the nonprofit market to uncover five key business problems facing not-for-profits. These are areas in which technology can help these organizations become more efficient, focus less on their business issues, and concentrate on fulfilling their specific missions within their communities. These include budgeting, financial reporting, membership management, fundraising, and integration of disparate systems.

Some resellers already get a substantial part of their business from the non-profit world. The Interdyn Progressive Group, a Houston-based Great Plains reseller, says that 12 percent of its revenue comes from that marketplace. Business is increasing because of several factors.

One factor is the need for timely information so that NFP managers and directors can make the right decisions.

"The larger the NFP, the more important the timeliness of the reporting system. Great Plains provides many tools to easily extract the appropriate information for the right person at the right time," says Bryan Wilton, a CPA and president of the Progressive Group. "Things like Excel, SQL Reporting Services, Microsoft Great Plains Business Portal are a few of the out-of-the-box tools we provide to users so they don't have to be programmers to get what they need from their systems, when they need it."

For example, in the area of membership management, Wilton's firm worked with the Houston CPA Society, which has more than 20 committees, each of which meets monthly. Each committee has a budget, and with the controller of the Society as the only accounting person on staff, a streamlined approach to produce timely reports for the committee members was important.

"We set it up so each month the controller produces the various committee reports with FRx and emails the same out to the members. With over 20 committees and each committee having about 10 to 20 members, that's a major task if you're using Excel or some other non-integrated solution. With Great Plains and FRx, the task is now accomplished within a few days after month's end," says Wilton.

Reaching Small Fry

Irvine, Calif.-based Sage Software is increasing its NFP reach with the launch of a non-profit version of Peachtree, formally named Peachtree by Sage Premium Accounting for Nonprofits 2006.

"We've seen an uplift in the sales of applications, and we want to move down-market with the Peachtree product," says Marc Griffin, senior vice president and general manager for Sage Software's NPS Business Unit.

Nonprofit Risk Management

Skakopee, Minn.-based Open Systems has teamed up with its 22 not-for-profit partners to offer educational seminars focused on fiscal nonprofit risk management.

"There is an erosion of charitable immunity and nonprofits are under fire from the IRS, donors, and government regulators. Our goal is to help our partners and their clients understand and manage risk," says Linda Shillingburg, director of business development nonprofits.

The company is sponsoring Nonprofit Risk Management lunch-and-learns in several cities including Portland, Ore.; Austin, Texas; Portland, Maine; New York, and Boston. These draw about 12 attendees per session and offer partners the chance to make presentations to prospects.

Shillingburg presents a risk management course, while the reseller conducts a demonstration of Traverse NFP.

In her session, Shillingburg categorizes the six pillars of accountability as ethical fundraising, strategic risk management, cultural competence, fiscal integrity, dynamic programming, and leadership sustainability. "Accurate accounting is essential to help nonprofits deal with accountability, and functionality should allow nonprofits to report to the IRS, the board, investors, donors, and grantors, win new grants, and solicit new supporters," says Shillingburg.

Cathy Steeves, director of the software solutions division of Portland, Maine-based Systems Engineering, got five solid leads out of one of the lunch-and-learns. While many clients weren't able to afford the software before, with the improving economy, they are now expressing interest, she says.

To attract attendees, Steeves contacted clients who use the company's hardware services, along with a prospect list provided by Shillingburg. While the turnout was low, Steeves believes the quality of the leads was worth the effort, and she plans on repeating the session in a few months.

Sage is adding the nonprofit version of Peachtree to its already established nonprofit software lines including MIP Fund Accounting, MIP Fundraising, MIP Government Series, and FAS Nonprofit and Government Solutions. Pricing for MIP products starts at $1,200, while pricing for FAS products starts at $4,000.

Pat Lavine, a 16-year reseller of Sage Software's MIP products, welcomes the new version because he loses 30 percent of his leads that involve nonprofit organizations who need software that is less expensive than the MIP line.

"The trend among low-end nonprofits is they don't have solutions, and they're looking for accounting functionality. But - cost is the main factor," says Lavine, president of Brownsville, Texas-based Lavine BMC Technologies.

Lavine is encouraged by the release of Peachtree Nonprofits. "Peachtree Nonprofits will allow me to get clients started, and they can graduate up to MIP products when they need to," he says.

Peachtree NonProfits includes a unified chart of accounts that can translate financial statements into categories required by the IRS Form 990, and a United-Way, based chart of accounts that complies with the United Way accepted range of account numbers for required reports. The financial statements such as Statement of Revenues and Expenditures, Budgeted Statement of Revenues and Expenditures, and a Statement of Financial Position will help nonprofits with financial management, even when multiple funds and encumbrances are involved. Single-user versions are available for $599, and the multi-user, five-seat license is available for $1,199.

The competition in the lower-end comes from the QuickBooks Premier Nonprofit Edition from Mountain View, Calif.-based Intuit, which claims to have more than 200,000 users and 85 percent of the low-end market.

"QuickBooks Nonprofit ships with a chart of accounts designed specifically for nonprofits. It prepares the IRS Form 990 and a snapshot feature that includes pledge status, and recent activity," says George Jaquette, group product manager. QuickBooks Premier Nonprofit Edition costs $499 for a single user and $1,499 for a five-user license.

Webbing To New Markets

There is a whole new market available to nonprofits via the Internet. And Data National, a reseller that serves municipal governments, is using Kintera FundWare to reach it.

"We've found that there's a new generation of constituents, and they want to pay their bills online," says Rob Raymond, president of the Pembroke, Mass.-based VAR.

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