FEI Daily spoke with Miller about the key to their successful business transformation and the advice he’d give to fellow nonprofit executives.
FEI Daily: What are some of the unique challenges of being the CFO at a nonprofit?
Don Miller: Well, first and foremost, limited resources and often unknown sources. It's hard for nonprofits in general to develop earned income or fee-for-service business models. And often it comes down to relying on individual contributions and maintaining a base of support. Corporate foundation, government, it seems like you're always begging for money. I come from the for-profit world, and it's easier to forecast. It's easier to understand your customer base and how you're going to drive sales growth. When I moved to the nonprofit sector, it became very challenging, particularly when you have a concentrated base of donors that are potentially contributing half or more of your total revenue. Making sure that those donors come back is really critical. And, if they don't, replacing them is a big challenge. I think it's just the constant search for resources that's really difficult.
FEI Daily: Tell me about the business transformation Meals on Wheels went through? What were the challenges you faced along the way?
Miller: I came in as the CFO in 2013. Ellie Hollander, who's our present CEO, had been with the organization for 25 years or so. With any leadership change after a previous regime that's been there for a long time, you obviously come in and take a fresh look at the organization and figure out how you're going to take the organization in a strategic direction that's sustainable. So, Ellie was brought in to do that, and I was lucky enough that she asked me to come along for the ride and help her do that.
The first thing we identified was that there had been an under-investment in systems, both on the finance side, and CRM. So first thing I did was evaluate what we needed to support the organization from a systems' perspective, as well as a human resource perspective.
We ended up looking at the work that the organization needed to do, design the organization from an org-structured perspective to support it, and then identify which systems we need so that our staff can be successful in carrying out the work that we do.
The accounting system was the first thing that I targeted. We were on QuickBooks. Our ability to get really good visibility into all the complex details of the business as far as sources and uses of funds, looking at programs and departments, we didn't have the ability to really effectively slice and dice in our accounting system. We were spending a lot of time doing work in Excel. Finance people obviously were good at Excel and were comfortable in it, but it's not the most effective way to work. And certainly, from a control perspective and from a accuracy of information standpoint, you have too many people touching things too many times, and there are too many opportunities for things to go wrong and for mistakes to happen and for you not to be able to catch them.
Sage Intacct is the software that we felt was the best fit for us. It really gave us a multi-dimensional system where we could segment things by donors. We could segment things by restricted or unrestricted funds. We can look at specific programs within funds. We can look at departments. So A, from a finance perspective, I have visibility into everything that's going on across the organization and how we're performing versus budget, but I can also push out budgets and P&Ls to functional leaders, so that they can effectively manage the programs that they're overseeing. In the past, we had a total org-view within the finance organization, but the functional leaders who are out there managing programs, they didn't have really good visibility into how they were performing. So it's really hard to hold people accountable to goals and success metrics when they don't really have a good understanding from a financial perspective, the resources that they're using and the resources they're bringing in.
FEI Daily: How did you determine which systems were going to be the right fit?
Miller: Well, I have some experience in a variety of accounting systems. I've used SAP from my Home Depot days, all the way down to QuickBooks, and a lot of things in between. I had some decent experience in a variety of systems. I knew what I wanted. I didn't want something on premises. We have one IT person for the entire organization, so I couldn't have something where we needed to host and maintain it ourselves. I wanted something that was flexible and pretty open as far as integrations with other systems. We had a whole bunch of different systems that were living on their own island, and when we had to get a whole picture of how the organization's performing from a membership perspective, from a program perspective, from a financial perspective, we had to pull all those things out of different systems and try to compile them to figure out how to do that because the systems weren't talking to each other.
And I also needed a multi-dimensional system, but one that was user friendly. We have a very small team, and I needed something that, moving from QuickBooks into this system wouldn't be massive change management from a user perspective, but that had the power of some of the larger off premises systems.
That's the approach that we took. We did look at 10 different systems. My team would probably say we looked at too many, but I wanted to make sure that we were making the right decision for the long term because we were a five million dollar organization when I came in. We're looking to be around 11 million this year. I wanted to make sure that we didn't make a short term decision, that we were able to find a system that would support us for the long term.
FEI Daily: What advice would you give to other nonprofits thinking about embarking on a business transformation journey?
Miller: Culture is a big one. Ellie was the chief people officer at AARP for 11 years before coming over to Meals on Wheels. People are obviously very, very important on her agenda. When I took over the HR function, she wanted to make sure that in an organization of our size - we were 18 when I got there, and we're 36 now - usually the HR function is an administrative function, and she wanted to make sure that HR was a strategic function. We were thinking about the work that we wanted to accomplish, the skills that we needed in the organization, how we take the folks that are currently in the organization and help grow and develop them, and how do we identify top talent, bring them into the organization and figure out how we retain them. We want it to be a world class workplace where people really want to come to work, and then a place where they could thrive. So, that was an underpinning of everything else. Part of helping our staff be successful is having systems that are going to support the work they're doing. And we need to give them the tools and the resources from a systems' perspective and from a development perspective to make them successful and help the organization succeed. Between the systems and the people, that was a lot of the internal work.
From an external perspective, we undertook a rebranding, and then worked with the ad council on a national PSA campaign to really get a national Meals on Wheels brand out in the marketplace. We represent the Meals on Wheels programs across the country. So, our success is tied to the success of the network. If the network's not successful, we don't consider ourselves to be successful. We wanted to make sure that we are galvanizing a movement across the country in getting people to volunteer for their local programs, support them, advocate for them, donate to them.