The Nonprofit Niche
Opportunities & Challenges
Charles Tate, CPA,
Managing Partner
(202) 419-5101
[email protected]
LEA Managing Partner Meeting
January 16, 2017
Firm Background

100% nonprofit

131 staff & partners (18th largest in DC Metro Area)

50% audit /50%outsourcing & IT

8 people focus exclusively on EO Tax

No individual tax
1
Evolution of the Nonprofit Niche
1980-1989
Big 8 departs the
niche
1990-1999
Niche practices
emerge/Dot.com
2010-Today firms
are driving down
niche prices
2000-2009
Enron/SOX
distracts larger
firms from niche
2
Perspective on the Nonprofit Industry

Traditional services are becoming very price sensitive

Large national firms dominate the > $100M sector

Long marketing/sales cycle

RFP driven - prospects ask about experience/references

Retain clients 5-15 years, depending on type of service

Business practices tend to lag behind corporate sector
3
Major Players in the Nonprofit Niche

Large National Firms - Large Healthcare and Higher Ed.

CLA, RSM, BDO (sometimes KPMG & Grant)

3-4 other local/regional firms

Non-audit services – non-CPA firms

Chicago market appears similar to DC
4
Marketing Approach: How We Got Started

Face to face networking

Print advertising and newsletters
5
Top Deciding Factors in Firm Selection
35% of buyers ranked specialized expertise as top
deciding factor, well ahead of referrals, reputation,
or customer service. Expertise came out just
ahead of existing relationships as a deciding
factor.
Source: Accounting Today/September 2016
6
Factors Increasing the Probability of Referrals?
Source: Hinge Marketing
7
8
9
10
Marketing Approach: What Tate & Tryon Does Today
CRM
Digital
Media
• Microsoft CRM
• Niche Newsletters
• Click
Dimensions
• Announcements
Speaking &
Writing
• AICPA/GWSCPA
Symposiums
• In-house Seminars
• Social Media
• Syncs with Time
& Billing
Networking
events
• Hosted dinners
with other
professionals (10• FAR/Council of
15 prospects)
Nonprofits/GWBOT
• Symposiums
• Lunches
• EO Commentary
• Seminars hosted
by other service
providers
• Emerging practices
white papers
• Get to know brown
bags with attorneys • Golf
• ASAE/CEO Update
• Proposals
• Website
• Board or
Committee
positions
11
One-on-one
• Sporting or cultural
events
The Marketing Engine is Our CRM
Microsoft Dynamics CRM - 15,000 contacts
1. Opportunities distributed to the Management Team
2. Notification of “Won” Opportunities
3. Used as forecasting tool
4. Used a marketing strategy tool
12
1. Example: Opportunity Created
A new Proposal Opportunity has been created in CRM: Subrecipient consulting work for National Academy of Sciences. If
you have any contacts that would be able to assist us in winning this opportunity, please contact the Proposal Lead.
National Academy of Sciences
Primary Contact:
Didi Salmon
Service:
Audit
Topic:
Subrecipient consulting work
Status:
Proposing
Revenue Size:
$50M +
Proposal Lead:
Doug Boedeker
Est. Close Date:
11/15/2016
Est. Fees:
$17,000.00
Proposal Due Date: 10/20/2016
Opportunity Submission Method:
Email to Individual
Opportunity Submitted to:
Doug Boedeker
How did Opportunity Hear about us? Existing Relationship (or previously worked with)
Opportunity Referral Source Details: Referred to Doug by Laura Douglas.
Proposal Lead
Doug Boedeker
13
2. Example of a “Won” Opportunity
A new opportunity has been won!
The opportunity in CRM called Sub-award Monitoring Assistance for
National Academy of Sciences has been closed as won.
Lynne,
Please add a new client number if necessary for National Academy
of Sciences in CRM, as well as any necessary projects to Tenrox.
Debbie, Fred,
Please update FIT as needed.
Account Name
National Academy of Sciences
Acronym:
NAS
Revenue Size
$50M +
Main Phone
(202) 334-2000
Primary Contact Didi Salmon
IRC Section
C3
Year End
December
Est Fees
$17,000.00
Partner Responsible: Doug Boedeker
14
3. Forecasting Tool is the Weekly Opportunities Report
TandT Open Opportunities Report
Topic
Opportunity Type
Account Name
Proposal Lead
Partner
Assigned
Revenue
Bracket
Est. Fees
Created On
Proposal Due
Date
Est. Close
Date
Audit
12-31-16 Audit & Tax
Audit - New Engagement
Road Runners Club of America
Jeff Quigley
Jeff Quigley
$1M to $5M
$21,000
10/19/2016
11/01/16
11/04/16
12-31-16 Audit & Tax
Audit - New Engagement
Global Integrity
Susan Colladay
Susan Colladay
$1M to $5M
$19,500
10/27/2016
11/15/16
12/15/16
3-31-17 Audit & Tax
Audit - New Engagement
Worldwide ERC
Susan Colladay
Susan Colladay
$10M to $15M
$34,000
11/10/2016
11/30/16
12/31/16
12-31-16 Audit & Tax
Audit - New Engagement
Tag and Label Manufacturers Institute
Jeff Quigley
Jeff Quigley
$1M to $5M
$18,000
11/18/2016
12/15/16
12-31-16 Audit & Tax
Audit - New Engagement
Computer & Communications Industry Association
James Kanuch
Jay Sciuto
$5M to $10M
$28,000
11/18/2016
12/15/16
6-30-17 Audit & Tax
Audit - New Engagement
Lutheran Services in America
James Kanuch
$1M to $5M
$19,750
11/18/2016
12/12/16
2-28-17 Audit & Tax
Audit - New Engagement
Obesity Week, LLC
Doug Boedeker
Doug Boedeker
$1M to $5M
12/6/2016
01/15/17
9-30-17 Audit & Tax
Audit - New Engagement
National Association of Criminal Defense Lawyers
Richard Banner
Richard Banner
$5M to $10M
12/8/2016
01/13/17
Internal Audit Services
Audit - New Engagement
University of Maryland Baltimore Foundation, Inc.
12/8/2016
01/15/17
6-30-17 Audit & Tax
Audit - New Engagement
Eye Bank Association of America
12/8/2016
12/19/16
9-30-17 Audit & Tax
Audit - New Engagement
SourceAmerica
12/12/2016
01/16/17
12-31-16 Audit & Tax
Audit - New Engagement
American Rhinologic Society
Mike Tryon
12/21/2016
01/06/17
12-31-16 Audit & Tax
Audit - New Engagement
Women Strong International
Susan Colladay
12/28/2016
01/31/17
Susan Colladay
Susan Colladay
$50M +
Christian Spencer
Richard Banner
$1M to $5M
Susan Colladay
Susan Colladay
$16,000
$1M to $5M
Susan Colladay
$1M to $5M
$18,000
Total
$174,250
02/28/17
03/10/17
OAS
Perm OAS
Generic Pharmaceutical Association
Anna Hofmeister
Anna Hofmeister
$5M to $10M
Indirect Cost Rate Proposal
OAS - Interim/non-recurring
American Women for Science
Anna Hofmeister
Anna Hofmeister
$1M to $5M
$6,700
12/2/2016
Perm OAS
OAS - Permanent
The ERISA Industry Committee
Anna Hofmeister
Anna Hofmeister
$1M to $5M
$40,000
7/14/2016
07/15/16
07/31/16
Virtual CFO
OAS - Permanent
Center for Global Policy Solution
David Bohn
David Bohn
$1M to $5M
$55,000
6/21/2016
06/17/16
07/08/16
Perm OAS
OAS - Permanent
American Kratom Association
Anna Hofmeister
Less than $1M
$30,000
9/20/2016
Outsourced CFO
OAS - Permanent
Maureen Downs
Anna Hofmeister
$5M to $10M
$50,000
11/4/2016
Perm OAS
OAS - Permanent
National Commission for the Certification of Crane
Operators
Byte Back
Anna Hofmeister
Anna Hofmeister
$1M to $5M
$40,000
11/18/2016
Virtual CFO
OAS - Permanent
Native American Financial Services Association
David Bohn
David Bohn
$1M to $5M
$46,000
12/8/2016
Total
$267,700
15
12/1/2016
12/31/16
09/30/16
12/01/16
12/31/16
01/15/17
3. Forecasting Tool is the Weekly Opportunities Report
TandT Open Opportunities Report
Topic
Opportunity Type
Account Name
Proposal Lead
Partner
Assigned
Revenue
Bracket
Est. Fees
Created On
$10M to $15M
$26,000
7/11/2016
T3
Bi360 and Full Circle Budget
T3 - Bi360
Implementation
Bi360 (New reporting and budget T3 - Bi360
software)
Bi360 WebPortal Implementation T3 - Bi360
American Educational Research Association
Rosita Goetz
Corporation for Enterprise Development
Rosita Goetz
$5M to $10M
$64,000
8/26/2016
American Public Power Association
Rosita Goetz
$15M to $25M
$35,000
6/17/2016
BI360 with Full Circle Budget
Enterprise Upgrade
New AMS
T3 - Bi360
National Court Reporters Association
Rosita Goetz
$5M to $10M
$16,000
10/9/2015
T3 - CRM
National Association of Regulatory Utility Commissioners
Rosita Goetz
$10M to $15M
CRM Custom Certifications
Database
New Association Management
System
New AMS
T3 - CRM
Recording Industry Association of America
Rosita Goetz
$15M to $25M
$90,000
7/23/2015
T3 - CRM
Association of Public and Land-Grant Universities
Rosita Goetz
$10M to $15M
$150,000
T3 - CRM
Investment Adviser Association
Rosita Goetz
$1M to $5M
New AMS
T3 - CRM
International Association of Chiefs of Police, Inc.
Rosita Goetz
$10M to $15M
New Association Management
Software
CRM for Case Management and
Client Tracking
Dynamics Sl to Dynamics GP
Conversion
GP Upgrade and Partner Switch
T3 - CRM
Tag and Label Manufacturers Institute
Rosita Goetz
T3 - CRM
Goodwill Industries International
Rosita Goetz
$50M +
T3 - ERP (GP/SL/Intacct)
American Dental Education Association
Rosita Goetz
$15M to $25M
T3 - ERP (GP/SL/Intacct)
Association of State and Territorial Health Officials
Rosita Goetz
$25M to $50M
GP Implementation
T3 - ERP (GP/SL/Intacct)
Community Veterinary Partners
Rosita Goetz
$180,000
5/27/2016
GP Upgrade and Hosting
T3 - ERP (GP/SL/Intacct)
Rosita Goetz
$5M to $10M
$23,000
6/15/2016
Accounting Software Switch to
GP
T3 - ERP (GP/SL/Intacct)
Association for Information and Image Management
International
Pediatric Nursing Certification Board
Rosita Goetz
$1M to $5M
$53,450
7/17/2015
GP Support
T3 - ERP (GP/SL/Intacct)
American College of Radiology
Rosita Goetz
$50M +
GP Implementation
T3 - ERP (GP/SL/Intacct)
NeighborWorks America
Rosita Goetz
$50M +
$200,000
3/24/2015
GP2015
T3 - ERP (GP/SL/Intacct)
Nando's Peri Peri
Rosita Goetz
$60,000
1/21/2016
Dynamics GP Upgrade with
Hosting and Partner Switch
New Financial Management
System
AP Automation
T3 - ERP (GP/SL/Intacct)
Rosita Goetz
$10M to $15M
T3 - ERP (GP/SL/Intacct)
Association of Womens Health Obstetric and Neonatal
Nurses
Rights and Resources Group
Rosita Goetz
$10M to $15M
4/1/2016
T3 - ERP (GP/SL/Intacct)
Goodwill Industries International
Rosita Goetz
$50M +
11/11/2016
FCB Implementation
T3 - FCB
School Nutrition Association
Rosita Goetz
$10M to $15M
Software/Process Assessment
with possible VAR change
CRM Assessment and
Documentation
Software Assessment
T3 - Other
Catholic Charities USA
Rosita Goetz
T3 - Other
Certified Automotive Parts Association
Rosita Goetz
$10M to $15M
T3 - Other
Association of Home Appliance Manufacturers
Rosita Goetz
16
7/5/2016
6/2/2016
4/28/2016
$500,000
5/20/2016
4/11/2016
11/11/2016
$50,000
12/23/2015
7/25/2016
8/1/2016
5/7/2015
$3,000
3/23/2015
$10,000
7/15/2015
$16,000
4/2/2015
$1M to $5M
$9,000
11/21/2016
Total
$1,485,450
Proposal Due
Date
Est. Close
Date
4. Data Influences Marketing Strategy
Total OAS Opportunities 2016
Total Opportunities Won/Lost
Won
Lost/Deferred
Declined
Total
Number
34
26
-1
59
Percentage
58%
44%
Number
1
5
17
3
15
2
2
3
1
1
1
2
6
59
Percentage
2%
8%
29%
5%
25%
3%
3%
5%
2%
2%
2%
3%
10%
100%
100%
Excludes 1 opportunity that was declined.
By Referral Source:
ASAE
Client Referral
Existing Relationship (or previously worked with)
Google / Search Engine
Industry Contact Referral
LEA Leading Edge Alliance
Networking Event / Conference
Other
T&T / T3 Newsletter
T&T / T3 Website
T&T Employee Referral
T&T Previously Bid on Organization
Unknown
Total
17
Total By Budget Size:
Less than $1M
$1M to $5M
$5M to $10M
$10M to $15M
$15M to $25M
$25M to $50M
Unknown
Total
Number
7
30
14
2
1
3
2
59
Percentage
12%
51%
24%
3%
2%
5%
3%
100%
Total By Engagement Type:
OAS - Permanent
OAS - Interim/non-recurring
Total
Number
40
19
59
Percentage
Permanent Engagements:
Won
Lost
Total
Number
18
22
40
Percentage
45%
55%
100%
Interim/non-recurring:
Won
Lost
Total
Number
16
3
19
Percentage
84%
16%
100%
Total Fees
$
$
$
$
$
$
$
$
Average Fees
$
$
$
$
$
$
$
$
31,971
46,403
64,629
65,000
160,000
218,833
30,500
59,800
Average Fees
2,041,700 $
1,486,500 $
3,528,200 $
51,043
78,237
59,800
Total Fees
$
$
$
Average Fees
968,100 $
1,073,600 $
2,041,700 $
53,783
48,800
51,043
Total Fees
$
$
$
Average Fees
791,500 $
695,000 $
1,486,500 $
49,469
231,667
78,237
Total Fees
68% $
32% $
100% $
223,800
1,392,100
904,800
130,000
160,000
656,500
61,000
3,528,200
Niche Focused Seminars
18
Niche Focused Monthly Newsletters
19
Non-Traditional Service Offerings Opportunities
-
Business process improvement
-
Risk management
-
Data analytics
-
Human resources/compensation data benchmarking
-
Investment management
-
HR Outsourcing
20
Considerations for Your Nonprofit Niche

Do your homework – particularly your geographic region

Develop a plan – Traditional or non-traditional services

Develop a strong reference list

Be patient - profitability will take time
21
Thank you for your time!
Questions?
22