Navigating Nonprofit Uncertainty

There may be errors in spelling, grammar, and accuracy in this machine-generated transcript.

Doug Lewis: All right, we're back. We're back. Baby. Back and rolling. Another episode of the Unofficial and emphasis on unofficial again today. Sage Intacct podcast. So we got a we got another special guest direct from the source, if you will. So Michael will get to you in a moment here. Uh, but.

Emily Madere: Doug, it seems like we're pushing closer and closer to the official Sage [00:00:30] Intacct podcast.

Doug Lewis: Maybe, I don't know, we'll have to consult our legal team about.

Emily Madere: I don't know.

Doug Lewis: That's why I like to put the emphasis on unofficial still. So, Michael, you can you can say anything on here, good, bad or ugly about Sage when we get to you. But, uh, special guest again today. Uh, this is this is going to be an exciting one for everybody, I think. Michael Blanton with Sage, nonprofit product marketing leader. So, Michael, before we get into you and your background and all things Sage, I gotta ask any. [00:01:00] Any relation to the Blanton family. The Bourbon royalty. Blanton family.

Michael Blanton: Ah, well, I had the look. You know, to make sure what you were referring to there. Um, to not be too obvious with it. No. Unfortunately not. We're not nearly that that that cool, but a distant relationship, maybe.

Doug Lewis: You ever do one of those, uh, before they went belly up? Those, like, 23 andme things. Those find your DNA. See, I'm curious if you could trace your lineage back to, you know, Albert Blanton, you know, the, uh, the Bourbon, uh, royalty king down there? That'd be interesting [00:01:30] to see. Uh, but, hey, on your own time. So joining us today, Michael Blanton with Sage again, officially Sage. Uh, on on Michael's part. Michael, would you would you give the the guest just just a quick background, who you are. How long you been with Sage? What do you do? Where do you spend your time? All that fun stuff.

Michael Blanton: Yeah, absolutely. Thank you guys for having me. I'm excited to talk about nonprofits today on the podcast. Um, Michael Blanton, uh, I've been with Sage, actually just about nine, ten months or so, so fairly new to to to the family here. [00:02:00] And I really run our product marketing. You know we call it industry marketing efforts at Sage. Um, for how we go to market with certain types of organizations. In my case, I cover nonprofits. Um, my background is actually in the space for quite some time in technology, mostly financial systems. So I was with a company called Blackbaud for a long time, uh, based here in South Carolina, where I am, uh, and we serve, you know, nonprofits in a variety of ways, lots of different software. Uh, I then went to a startup called Opengov. So serving the government and public sector, [00:02:30] uh, market for 4 to 5 years, um, prior to joining Sage. So I have some familiarity with, with, with that audience as well. Um, enjoy my time down here. Um, and uh, have enjoyed ramping in to Sage and getting to know the family. Uh, you know, I had a legacy of of knowing Sage Intacct previously and competing against Sage Intacct previously. So it's fun to be on the other side because I. I've got my butt kicked, uh, competing against him in prior situations.

Matt Lescault: I was gonna say, what was your win rate against Sage? Yeah.

Michael Blanton: You [00:03:00] know, it's been so long ago now. I don't know that it's still relevant, but, uh uh, we Sage came on strong. I'll put it that way.

Matt Lescault: Sorry.

Doug Lewis: I know you did. Well, Matt. You love you love going negative with everything. And I think that's what people appreciate about you. We'll keep it. We'll keep it positive. So I'm going to go on a limb and assume, uh, Michael, that, uh, you are a big Sage fan now that you're on the winning team, if you will.

Michael Blanton: Exactly. Yeah, yeah. No, like I said, it's been a unique perspective to see the company change over time. I mean, it [00:03:30] was, you know, many years ago actually pre pre Sage acquisition, you know, in many cases where, where I was familiar with intact as a product and a brand. And so I've gotten to know Sage more and more over the years and uh, and uh, you know, continue to just have such a strong and committed presence to the nonprofit market and really taking over kind of a leadership role, you know, in the finance office. And it's been fun to be a part of and make impact with those organizations.

Doug Lewis: I love that, and so we're going to focus on the nonprofit [00:04:00] sector here, just kind of across because obviously that's that's what, you know, that's what you live and breathe. That's where you're the expert. Um, I want to hit upfront here. We're going to try to be as politically neutral as possible, uh, throughout this discussion. Um, I think we can all get on that same page there. But, you know, Michael, could you could you give us kind of a brief overview of the nonprofit sector as a whole right now? Some of the the overarching challenges they're facing, some of the recent changes in the past 6 to 12 months, kind of where you see that industry moving [00:04:30] forward just to kind of lay some basic groundwork. We can kind of build from there.

Michael Blanton: Yeah, absolutely. Um, so some thoughts that come to mind and I should preface, you know, for your listeners, I know you guys know nonprofits as well. You know, if you've got experience in the space, you know, what we'll talk about today is kind of broadly across all nonprofits. I always like to make sure people are aware when we talk nonprofits, we're really talking about, um, a A tax structure, not necessarily a business model. So we're talking about a very diverse set of organizations. And to your point, Doug, I think it's [00:05:00] important to be apolitical because there's a wide range of political opinions and structures in how these organizations align with their supporters. So we'll get into the diversity of that, but it's definitely an interesting environment. Um, we're probably going to talk more about the last three months. Uh, you know, in the context of what's been happening in the change. But I would start off by saying, you know, six months ago, nonprofits were in an interesting place. So, you know, we may talk a little bit about some research we did in our nonprofit Tech Impact [00:05:30] report, but we surveyed organizations at the end of last year, and a lot of the data said the challenges have never been greater. I mean, this is a little bit of, um, an overplayed term in nonprofit land. But doing doing more with less, uh, has, has become, you know, a little bit of an extreme situation because prior to the change in administration in the US, we were facing inflation right from several years from COVID, increasing the cost of programs.

Michael Blanton: Uh, we also saw an increase in the demand for services. [00:06:00] That's really reached an unprecedented high, depending on the type of organizations that you've been talking about. Again, some of that from the pandemic and those those needs just haven't stopped growing. And then also staffing really, really difficult at this time. In fact, staffing may be the number one challenge facing finance and administrative teams and nonprofits right now. So those would probably be like top line news in nonprofit land right now if not for the last three months. Which means now they're just subtext, uh, in that, [00:06:30] um, folks are dealing with a lot of uncertainty now and a lot of change, and it's really placed a premium on the ability to react to that change. Um, funny enough, you know, um, it seems quite unprecedented the way in which things have changed since the Trump administration has began their term in office. But if you'll remember, you know, the last presidential swap swap with Biden. We began in a similar fashion in terms of the the nature of having to deal with chaos. So kind of kind of an interesting, uh, interesting [00:07:00] parallel there.

Matt Lescault: Well, I have I have a question for you because you kind of touched on it briefly, but the report that you guys, uh, that Sage put out, um, when was the polls? When was that information really gathered? Was that right around election time? What kind of time frame were these results kind of reflecting on?

Michael Blanton: Yeah, exactly. So that was, uh, we did that survey during the election. So it was actually started while folks were going right before folks went to the polls and completed, um, shortly thereafter. [00:07:30]

Matt Lescault: And so that that would be November ish time frame.

Michael Blanton: Yeah. Yep. That's right.

Matt Lescault: And and what and how long are you gathering data? Is that a one week period of time? A four week period of time? You gotta give me an idea of of of the effort that goes into I think it was 350 different organizations that were that were that participated in the survey.

Michael Blanton: Yes. That's right. So 350 respondents completed the survey. And we gathered that over the course of about four weeks.

Matt Lescault: Okay. All [00:08:00] right. I think it's really important for listeners to understand the breadth of this information, because there's a big difference between talking to 4 or 510 versus 350. And also the difference of timing. Um, some of the questions I end up talking to you about is like, if we're polled today, where do you think? What do you think would change about the data? Um, where do you think where do you think the sentiment would be around some of the things that, uh, that were brought up in it.

Doug Lewis: Or have you gotten any specific customer feedback that says, wow, you [00:08:30] know, we we participated in the, uh, the impact report, but now our views are significantly different. Have you seen any kind of specific, uh, you know, feedback or updates from any, any specific clients, partners, anybody involved?

Michael Blanton: Um, well, there's there's certainly industry research groups who are putting out new information about, you know, how folks are feeling in the market, etc.. Most of what we've been seeing at Sage has come through our conversations with customers and prospects and just feeling them out. But to Matt's question, um, yeah, we'd have to redesign [00:09:00] the whole survey, I think, to really capture, you know, the updated sentiment there. I think people would still express that they're still feeling dealing with the same organizational and structural problems. Right? The need hasn't gone away. For most organizations. It's probably increased, you know, even more in the last six months. Um, but what's top of mind for them right now is just planning for uncertainty. And again, you know, we're talking about a diverse group of of organizations. If you are close to the environment or immigration policy or international, [00:09:30] um, uh, aid, right. You've got very specific feelings because you've been impacted in very specific ways. But for most nonprofits, they're kind of waiting and seeing, like when, when, when is this change going to hit me? What is the uncertainty mean at large? How do I better prep my organization for dealing with change? And that is absolutely kind of what's top of mind for everyone.

Emily Madere: And what is the answer? The answer that you're getting like how how are you seeing these nonprofits kind of prep for this this change?

Michael Blanton: Well, [00:10:00] I think, you know, hopefully a lot of them are are reminding themselves, hey, look, you know, four years ago we had a similar chaotic situation and nobody kind of knew what was going to happen in the state of things with, with Covid and with the pandemic. Right. So there was a little bit of a shock moment there. Obviously, this is different, and a lot of it has to do with policy and kind of the precedent that's being being created by how policy changes are made. But I think there's a variety of ways that folks are planning for it. You know, at the strategic level, people are kind of just thinking [00:10:30] through, um, uh, how they're funded today probably is where they're starting. Right. Because that's the most concrete now, um, organizations with federal grants are obviously are are jumping into that conversation and have been since late January when there was that temporary freeze, you know, on on all federal grants. Um, so there deep in those conversations now, I think also just kind of at executive level, um, having a little bit of warm room discussions, for lack of a better term, around how do we get better at planning? What do we need to do right now [00:11:00] to to react to different situations that might come come up? So scenario planning, etc.? How can we leverage our board members who are really, you know, this is prime time to actually leverage your board members in the way that that they could strategically be leveraged, um, to help do planning and things of that nature. So I think it's kind of just talking through that, throwing things, um, uh, having those more collaborative strategic discussions at a leadership level. Uh, and then there's obviously a lot happening tactically in different departments and offices, [00:11:30] etc., which, which we'll probably get into.

Matt Lescault: So my organization has experience long, you know, almost 20 years experience doing outsourcing and focusing on Nonprofits. But even across the broader spectrum, what we see when we see uncertain times is a reinvestment in technology and processes to try to gain more insight into it. Is that something you're expecting to see more of and and in nonprofits? You know, shift into that type of thought process?

Michael Blanton: I'd [00:12:00] like to think so. And I think, you know, my perspective is similar to yours, Matt. You know, I think, uh, in a broad scale, though, however, you know, that perspective is probably be built with, with fairly savvy organizations who are committed to change, who are thinking ahead and saying, hey, how can we better prepare for change? Well, part of it is making sure that our human capital is free up to do the hard work. You know that that that where human capital really provides value and be able to have collaborative collaboration [00:12:30] and planning and discussion around change. But the reality is probably more nonprofits react to, hey, we need to be strategic with how we how we're spending our dollars. Right? So and that's a smart thing to do. And it's probably the first thing that comes to mind for financial leaders at this moment is how do we conserve the budget? What can we do differently? And so I think initially for from our perspective, it hits folks to maybe pause right things around technology investment. And I think that's, you know, a conversation we should talk more about because it's [00:13:00] probably the opposite of what they can do, right. To be prepared for the unexpected, which is kind of the number one theme going on right now.

Matt Lescault: Well, I'm I'm a big proponent of saying like, the only way you manage budget and spend is to know your numbers well and know where those levers are. And so sometimes it's like chicken or egg. I mean, are you going to focus on cutting costs or are you going to focus on transparency and visibility into your organization? And I get really concerned where that side isn't the focus for the [00:13:30] longevity of organizations that have to go through tumultuous times. Um, so that is something I think about when it comes to whether it's a recession, whether it's a change in funding availability, whether that's from a grant perspective. I think one of the things that that the report talked about was a shift in people's donations because of the political spectrum and donating to, to, to, uh, politically as opposed to mission driven donations and giving, uh, you know, so [00:14:00] all of those pieces need to be thought through for these organizations. Now we've seen and Emily, you you're on this with me when it comes to scoping for organizations. But, I mean, I've seen a big shift in, um, organizations coming out of really legacy software. Forget the QuickBooks, forget the Xero, forget that kind of stuff. But, um, you know, those products like Razor's Edge or Financial Edge, those products like Aplos or some of the the more really legacy software?

Emily Madere: Yes, [00:14:30] Matt, I have seen that shift and I think it's good for our listeners and for this conversation I conversations, I don't typically work with a lot of nonprofits. I think there are a lot of other great partners in Sage direct that do an awesome job with nonprofits. I don't typically work in this space. I can talk from a another industry, and I can say the sentiment is and the folks that I'm working with, half of them are kind of like full brake stop. I don't I don't think we need to implement software right now. It's too much uncertainty. But the other half are like, I need to [00:15:00] implement this software because a it's going to rise in cost like everything else. Um, and B is like, I need to know exactly what's happening in my financials because I don't know right now.

Doug Lewis: That's an interesting piece here because, you know, Michael, in your in your impact report right at the beginning. So it's very easy to find for anybody who wants to see this. But you had you had one statistic that really jumped out to me. 9% of nonprofits consider themselves highly data driven, despite 85% recognizing the importance of metrics. [00:15:30] Now, how in the world did we get there? And the irony in that alone is just astounding. Can you can you speak to that a little bit?

Michael Blanton: Yeah, it's pretty wild. And then you read the stats like that, and then what's even more wild is again, before before the changes of the last three months when we did this survey, you know, 9% would, would rate themselves as, as, um, highly performing from a data perspective. But then the, the vast majority of them would also rate technology fairly low as they think about their initiatives [00:16:00] for the coming year when compared to some other things. And maybe we can talk about that more. But, um, I think we get there. But just because there's a lot of challenges in nonprofit, right? You know, we talked about software and tools available to them. A lot of them don't speak well to each other, right? They don't communicate effectively. So we've got a lot of systems and data that are unintegrated legacy processes captured on paper or Excel or, you know, etc. kind of the classic narrative there. And what that really creates is a challenge in telling your story and being reactive, being able to react to the current [00:16:30] moment. So I think to Matt's original point here, when he was turning it over to Emily, is that these organizations that aren't set up to understand their business and or their organization in real time, are really doing themselves a disservice in the current environment because they can't communicate to their audience about their impact in the moment.

Michael Blanton: They don't have a confident grip around what's happening in their organization now. They can get there, right? They can get there. They can take some days and get the data and come together. And right. This is more [00:17:00] in good nonprofit organizations. This often becomes more of a long range planning exercise. Or maybe it's done annually, maybe it's every six months. But they need to be in a position with technology and tools like Sage, with the reporting capabilities there can do this for them, where they can react within the week or the day. Right. To understand, um, what's happening in the organization and how they can react to things quickly. Um, so the lack of data in that story, Doug, to your point, really, really slows things down. And it [00:17:30] makes decision making hard.

Matt Lescault: Well, not to give excuses, but I think the other thing that came out of the report was that the staffing is the biggest issue that they're running into, and if you're having turnover and turnover and turnover, you're not focused on data. You're focused on filling, filling the gaps. And that that that exacerbates a whole different set of issues for an organization. Emily, I'm sorry I cut you off.

Emily Madere: No, no. That's okay. And no, Matt, I agree with you. And I think that's where the IEP with Sage Intacct model comes into to great [00:18:00] effect. Is using a firm like yours or like Eisneramper or whoever, um, to do outsource accounting for these, these nonprofit organizations using Sage Intacct.

Matt Lescault: Well, I think yes. Agreed. Completely. I think you're also seeing that turnover at the program director levels, at the at the staff, at the staff levels that really drive the overall vision and mission of the organization. And and when you lose leaders like that, especially to higher compensation within the private market, [00:18:30] things of that nature, that intellectual drain on the organization has a whole other impact that is is almost unquantifiable. It it just puts organizations on their back feet and trying to, uh, you know, trying to just react and fill that void. And a lot of times you're going, okay, who's the person working under that individual? We're going to we're going to bring them into that position. But that might not be the right answer either. Uh, [00:19:00] so as much as I'm like, data is so important and technology is so important, well, how can organizations focus on that if they don't, if they don't have stability within their staff? Um, I mean, I had one where we implemented in which we went through like three executive directors, four financial directors in a less than a year in trying to do implementation. And it it was near impossible.

Doug Lewis: How many how many people did you chase away yourself.

Matt Lescault: I don't do the work, that's [00:19:30] all.

Doug Lewis: It's all I hear. They're like, we can't deal with this guy. Uh, Michael, you brought up a few times kind of the priority list. You know, among leadership in the nonprofit sector. Talent is is usually at the top, technologies shockingly lower on the list. Can you kind of give your opinion of maybe the top 4 or 5 priorities that you are seeing amongst leadership, kind of where they fall in what order and understanding that might shift a little bit based on kind of size and, you know, where they focus their efforts.

Michael Blanton: Yeah, absolutely. [00:20:00] Um, so we you know, in the report, for example, we talk about kind of macro concerns and then internal concerns. Uh, we've covered the macro a little bit. Surprisingly, the internal concerns really haven't changed. And you guys will know these. Well, it's, you know, manual processes, manual reporting, you know, some of these different, different things. Um, we talked about staffing. I think the big thing now is as we as if you were to reference the list in the report, which, which talks about competitive funding, which talks about, um, uh, inflation and staffing. Uh, [00:20:30] a lot has changed. The one that's, that's probably top of the list now in the report and still would be top of, uh, of the list right now if we asked. It is revenue diversification. Um, so it's how do we have more sustainable funding not only to grow the organization, but to, um, to to maintain continuity in the times of disruption, disruption. So, um, understanding the risk and exposure to certain funders, obviously the federal government being the biggest one in this scenario, but also to private organizations, right. Because, you know, sentiment [00:21:00] is changing. Things are changing. People are concerned about the economy more generally.

Michael Blanton: And one of the things I think is interesting from a technology or finance perspective, and we covered this in the report as well, is, um, when you look at the responses and priorities across different types of leaders and nonprofits, because we talked to finance and executive teams and others, you can see some differences in their thinking, right? The CFOs and finance leaders are going to be a little bit more process oriented. A little bit more cost oriented. But a lot of the, you know, the overwhelming [00:21:30] majority of other folks are focused on growth and revenue diversification. And there's really clear underlying themes that CFOs and finance leaders can play a bigger role in that scenario. And I think even more in the current environment, because there's so many decisions that you can make, get garnering support, thinking through, um, you know, your revenue sources that really bring in a business logic, reporting how you're spending that money that really lends itself to making a CFO or a finance leader part of that conversation in ways that [00:22:00] they probably haven't been as close to in the past, if that makes sense.

Matt Lescault: What have you seen from organizations trying to find that kind of earned revenue streams, like getting outside of any type of kind of funding, whether it's foundation grants, you know, federal government, state, local? Are you seeing a push in that direction?

Michael Blanton: I think I think organizations in general are trying to get more creative, right? Um, you know, in terms of revenue that could be charging for services. [00:22:30] You know, unfortunately for some, um, critical service providers, they're probably going to be forced with some hard decisions about who they're able to serve. Right? You know, depending on the need there, um, it could also be strategic partnerships. You know, I think, um, and I've talked to some other industry experts recently for smaller firms, you know, just having conversations about is this a time to consider maybe mergers with with other organizations. You know, who are closely aligned to your mission? Are you really well suited to to maintain the next four years? Right. Because [00:23:00] the challenges are going to continue coming. But, um, you know, I think just creative thinking in general at a leadership level, like is part and parcel with the idea of being nimble and agile in the current state of things.

Doug Lewis: So do you foresee, uh, just purely speculative at this point? Do you foresee a lot of consolidation in the nonprofit sector over the next, let's call it 36 months.

Michael Blanton: I, you know, if the pace keeps up, keeps up at the current rate, there probably could be at the at the [00:23:30] smaller end, for sure. But I think it's too early to to to necessarily make that call. And um, I might not be the best person to, to make that prediction.

Doug Lewis: Well, you could even if you're not the best. I mean, we're the unofficial Sage. Yes.

Emily Madere: You're the you're the industry leader that we're bringing on. So you could suspect.

Michael Blanton: Fair enough.

Emily Madere: So when you got this report back and it's for our listeners, if you, um, if you read it, it's a it's a very heavy, you know, long report, a lot of great information when you [00:24:00] got it back and you got to reading it. It was 1 or 2 things that really struck out to you that really made you think, like, wow, I didn't know this or this is this is helpful to know this is helpful to share to other nonprofits.

Michael Blanton: Yeah. I think there's a couple insights, um, that I think would be particularly relevant for your listeners as, as kind of a, the unofficial Sage um, podcast, which is, you know, one would be the role of the finance office. And it's really, really been elevated in the last few months. Right. And just the value [00:24:30] that that financial leaders, particularly those that are well enabled already with technology, can play in their organization more broadly, right from the classic lens of closing the books and focusing on transactions to how do I do better planning? And there's lots of themes that that would support more forward thinking, right. Like look at in the report, we talk about the adoption of budgeting and planning tools, which has been the fastest growing category of software in the last few years. So it's, you know, how do they up level, um, their game and their team to be more collaborative and play a [00:25:00] bigger role in leadership conversation is is a big theme in the report? Um, another kind of interesting one because we talked to in particular, kind of midsize nonprofit organizations, just like Sage generally talks to, to to small and midsize businesses. Um, and that that's an interesting place to be, uh, in general, because midsize nonprofits are really building for scale, right? So they've got a little bit of a brand recognition.

Michael Blanton: They're thinking about how they scale up to better serve their their constituents more efficiently. And so they take on capacity [00:25:30] building initiatives. They are looking to hire the right staff. They are looking to increase their improve their technology stack. And if they're in the midst of that, and then chaos happens right in the macro environment, they're all of a sudden really struggling to keep up with priorities and initiatives. Right. So I think midsize organizations that are looking to scale have a lot going on in general, and maybe even more so in the last three months. So that's an interesting one that we talk about in the report, to really focus on just alignment at the leadership level. [00:26:00] If you're kind of a scaling nonprofit looking to grow, you know that 5 to 50 million size range, if you will. There's clear themes in our responses that say that those folks are taking on a lot, and that's really important for everybody to be aligned on priorities so that they're not, um, Overdoing it, trying to scale up.

Doug Lewis: And you just touched on it kind of the size of these organizations. You know, you define that mid mid-level midsize as kind of 5 to 50 million. Is that what I heard.

Michael Blanton: Yeah. You know. Mhm. [00:26:30] Yep.

Doug Lewis: Okay.

Emily Madere: And so I want to ask another question here. Um I think I know but I think I think everyone needs an update. So how many of Sage Intacct customers are nonprofits?

Michael Blanton: Um, we have over 4000 nonprofit customers in the US alone. But now that is, um, both direct through, through Sage and through our partners. Um, and, you know, overall, I think, um, at least for Sage Intacct, you know, somewhere in the range of 40 plus percent [00:27:00] of our customer base today.

Emily Madere: So it's pretty safe to say that, um, Sage Intacct as a whole is going to be pushing out more and more products and features and functionalities for nonprofit. We've already seen a ton come out in the last couple of releases. Leases?

Michael Blanton: Yeah. Yeah, absolutely. And, um, and we could, we could talk about that a little bit. But, you know, I think it's safe to say that, you know, if a, if a feature or capability doesn't work, you know, for, for these exempt organizations, then it's something that Sage is really looking hard at to make [00:27:30] sure it makes sense for, for for things overall because of the nature of, uh, and size of that in our overall portfolio. And obviously we're always thinking about capabilities that we can launch that are specific to, to certain customer segments, because that's how we go to market, right? We we think about the verticals that we serve.

Matt Lescault: I guess my question for clarity is of the, uh, non-profits that were polled were surveyed, were they all Sage Intacct customers?

Michael Blanton: No, no no, no. All very small percentage of them were current [00:28:00] customers. So it's really a read on the market. Okay. Um, but we did have we did include some customers in there as well.

Matt Lescault: The reason I ask is I was shocked that only 15% of nonprofits had confidence in whether I was compatible with what their, uh, their accounting software was doing. And then that really from and I have it up here like the software priorities that it was. Seven was the last on the list that I was priority which I feel is completely opposite from what [00:28:30] you see from the for profit market, um, when it comes to investment and so forth. And, you know, the question I have is like, why? Why is that? Why is that the case for nonprofits? Um, and it seems like a great opportunity. I mean, we go back to Sage Intacct copilot Sage Intacct is considered, uh, to incorporate AI, uh, at a faster rate than any other, uh, ERP software out there. This seems to be a disconnect for me.

Michael Blanton: Yeah, [00:29:00] 100%. And I think we're going to try and directly communicate with folks and make sure they realize the disconnect that's there, especially now to your point. You know, Sage, we're really excited about our AI roadmap. You know, I think we're really, um, at the current moment and we've talked about this at a user conference coming up at Sage future, you know, launching some real meaningful AI capabilities that are specific to accounting use cases. And we're doing that in a really ethical way. So we probably, as far as I know, have the most robust, robust approach to ethics [00:29:30] and responsible AI in our marketplace. Um, and I would say the, the lack, you know, when non-profits talk about AI, you know, we're mostly talking to small and midsize organizations. So maybe, you know, they're not necessarily on the cusp of strategy of what's happening with AI. But I think for the most part, a lot of them are saying it's this has been a topic in the news for a while, but I don't see how it practically impacts my day to day right now. And I think we're at the cusp of really giving them concrete use cases and technology that they can sink their [00:30:00] teeth into to say, this is going to show up in my day to day process from now on.

Matt Lescault: What what I would say concerns me is that my bet is that far more than 15% of your respondents actually use tools that have AI capabilities within them and don't even realize it, which means we have an education gap. We have a gap of what people really know and think about what AI is. I'll use some of the marketplace partners, if any, of these small nonprofits in which I was trying [00:30:30] to get to it, like the percentage of nonprofits that were under 3 million, was a pretty large percentage. It was it looks like it was not quite, but three quarters of the respondents were under under 3 million in revenue for this. The likelihood that they're using a Bill.com or a ramp or something from an AP automation perspective is pretty high. And all those products use AI. So there there's some education that needs to happen within [00:31:00] this industry in my in my opinion.

Michael Blanton: Yeah, 100%. Most of them are already getting value from AI in the form of things like transaction flagging, you know, some of the capabilities. Ap you know, invoice automation. And those are things that that Sage is extending now that we're excited about. But to your point, general education is important. And then just dispelling the, the, the the potential myths that exist around gen AI. Right. Generative AI and and again I think our opportunity and what we're we're we're approaching on [00:31:30] launching on the Sage side gives us a great chance to educate those folks as we bring some of those generative AI features to market as well.

Doug Lewis: What are you launching, Michael?

Michael Blanton: So upcoming, you know, so we'll be talking at Sage future in detail with our customers. But you can go online right now and see some of the things we're launching with Sage Copilot, which is something we've been talking about. And that includes navigation, right. A assistance for navigating, you know, the system and understanding what's happening through, um, through search and and and chat. Um, level [00:32:00] AI, um, but also incorporating that into, uh, traditional financial processes like the clothes. Right. So one thing we're bringing is, is very analysis variance analysis which, which we're launching to customers now uh, and have some great early feedback on uh, and really just kind of again, while other companies, some of our competitors in particular, are focused more on AI for CRM or fundraising or a lot of these things that are kind of more oriented around communications, [00:32:30] we're focused on, on hardcore financial tasks. Right. Um, and, and bringing that additional automation so we can increase efficiency. So looking at things like the close and continuing to chip away at that until it's basically non-existent is a big goal of Sage's.

Doug Lewis: Anything so anything nonpublic today that you can tease without giving too much away or getting in trouble yourself on this one around capabilities? Yes. Any any upcoming features? Uh, you know, anything [00:33:00] unique out there? I know you have the inside track now, whether you're willing to or able to share It is different, but anything you could tease?

Michael Blanton: Well, you know, I'm not able to share a lot and sometimes I don't always have the most inside track. But I would say we're always launching exciting partnerships right through the marketplace and also at more strategic levels. But then when we get to I would just keep keep hammering on that. I mean, I really think Sage is in an awesome position with what we're building with our own models to really impact accounting specific use cases where the market isn't even [00:33:30] really focused on it. Right. They're focused on other ways to bring AI to market in a way that's not so directly to the most important thing in the finance office, which is driving efficiency so they can be more strategic.

Doug Lewis: Yeah, I like that. That makes sense. Something that's kind of just all this conversation about leadership, prioritization, technology, all this fun stuff. You know, I'm kind of curious from your perspective, what tool inside the existing Sage ecosystem right now would [00:34:00] you consider the most underutilized tool for nonprofit leaders.

Michael Blanton: Okay. Let me pause here and think. So the Sage ecosystem inclusive of of partner apps, anything.

Doug Lewis: Anything Sage anything Sage.

Emily Madere: The functionality, market.

Doug Lewis: Functionality feature something that's built in, need to know about. They don't use it. They overlook it. They use it the wrong way. Anything that is available that they're just not utilizing to its fullest potential. Specific to the nonprofit world.

Emily Madere: While you think on that, [00:34:30] I can actually take this one because I talked about this with a client yesterday. Um, so I want to get yours, Michael, but I'll give you some time to think. So collaborate. I would say collaborate is one of the most underutilized features of Sage Intacct. For those of you who don't know what collaborate is, it's what I call a Facebook feed. But for Intacct, it goes on, um, every, you know, transaction and you can have internal notes and you can attach documents and, um, you know, I don't remember what I had for lunch, you know, yesterday, but if I put it in collaborate, [00:35:00] I will remember. Um, so I would say that is the most underutilized feature that could be used more.

Michael Blanton: They're probably not using it for that lunch. Uh, but you could, you could though. Um, yeah. And and I'll add to that. I mean, I think it's a great point, Emily makes, like when you think about nonprofits and we talked about transitions and and staffing and retention in general, just making sure they're getting the most out of their software. Doug, like your points really pointed. Like a lot of people aren't using some of our most capable features. And that's [00:35:30] why they invested in the product originally. So are they committing enough to making sure that they get the, you know, the real value from the technology that they're investing in? Um, they probably need to focus more on that. And so an example of that would be dashboards, right. We have super powerful dashboards. Never been more relevant. You can edit and change them within the finance office without it support on a dime to help address some of the planning. And um, and, um, you know, uh, Evaluations [00:36:00] that need to be happening in the current environment. And a lot of people just don't take that extra time to set up, you know, the additional dashboards or additional reports that could be valuable to them.

Michael Blanton: I think planning is another one that I mentioned, just because of the current environment as well, that the tool that's seen good adoption and a lot of folks have access to it and probably aren't investing enough time in planning tools in general. And I think this is a broader conversation around, uh, planning software. But in a midsize nonprofit today, a lot of folks go invest in planning tools, and [00:36:30] it really ends up being more complicated for them to use than they realize they don't have a full time fpna person. The implementation is significant, and what you get with Sage Intacct planning is something that's pretty familiar to folks who are coming off of Excel. Great ROI, you know, at a price that makes sense, and just being able to leverage that to its full extent. There's capabilities in there to in a board meeting, you know, change quickly some scenario inputs to in assumptions so that you can look in real time. Nobody's using that. And they should be because they're really good [00:37:00] tools.

Matt Lescault: So I'm really glad that you brought up the reporting, because we get a lot of clients that use Intacct reach out to us for services, not necessarily just to implement. And I would say the number one thing that we hear is that nonprofits are still living in Excel to handle reporting, even though it's very that Intacct has very robust capabilities there. Um, and that's probably where I would have gone if asked that question. And so I was really happy to hear that. And I second you on the Sage Intacct planning. Um, you [00:37:30] know, we have a couple people in our on our staff that just focuses on that because of its lack of adoption. Um, it's one of, uh, those modules that are an afterthought because you kind of have to implement it and configure it after you go live. And a lot of times organizations are so deep into just getting used to intacct they forget all about the planning tool. And that's where we we've established some process and work really hard to drive that adoption, because we really do think that there's a lot of value in it. [00:38:00] Um, and a lot of value in having that, that capability for the organizations. So I just second everything you said.

Michael Blanton: Love it. Yeah. And, you know, hopefully folks realize is there's never a more compelling time to be thinking about that right now, especially if you know, you're you're operating in non-profits.

Doug Lewis: That's a that's an interesting segue into one of my, one of my last, last question, Michael, I've been I've been pounding you with questions. So let's just say you have all of these nonprofit leadership that are on the fence about should should I [00:38:30] commit to this Sage product right now with all my funding pressure, my staffing challenges, all this other stuff happening, you know, what would you say if you had every single prospect who's right there on the fence thinking, yes or no, should I do this? What would you say to them right now?

Michael Blanton: I'd say there's never been a better time than now. Um, just kind of something that probably people have said in the past, but uncertainty will continue. [00:39:00] Right. We're in our second, if not more cycles of of major macro events that would not have been predicted. We are seeing trends that are just going to continue in terms of staffing. And those are very, you know, concrete, um, challenges that we'll continue to see. Well, and if we need to be more nimble as an organization and we need to serve more people and we can't staff to hire it there, there is no other option than pursuing and using technology more effectively. Um, and [00:39:30] then I'd show them the concrete proof that we have and why Sage Intacct is a market leader with nonprofits and the value that we can provide. And it's not just for folks coming off of QuickBooks, etc.. You know, as Matt mentioned, a big piece of what we do in nonprofit, probably bigger than in other sectors that we serve, is replacing legacy technology that actually was even built for nonprofits because the accounting tools have gotten that much better. The reporting is that much better. And we have 150 case studies online with hardcore, quantifiable ROI stories [00:40:00] that can demonstrate why folks should make that move. That's probably where I would head with that argument.

Doug Lewis: I mean, I would I would sign that, I would. You said that it's done. So everyone on the fence. You heard it right from the source.

Michael Blanton: You know, I don't carry a quota in this. You know, so I'm probably not the, you know, the best in positioning that. But, um, but, you know, there are other people who deliver that even more effectively than me.

Doug Lewis: No, I like that because, you know, we could always go soft with it, like, oh, y [00:40:30] y you Sage great and all this fun stuff. But, you know, having having that concrete proof I think goes a long way, uh, throughout the sales process. Now, Emily and Matt, the two of you live that sales process, you know, day to day, much, much deeper than I do. So, uh, never a better time. You heard it straight from the source, Michael Blanton, non-related to the Bourbon Blanton, which was a disappointment still. But that's. That's okay, my friend. So, Michael, we always like to cap these things. Want to be respectful of everybody's time. Uh, by the way, I want to applaud all of us for for staying [00:41:00] extremely neutral on the political spectrum throughout this whole conversation in the nonprofit world. Yep. Little, little, little golf claps. Yep. Perfect. Michael, we always end these things with just an awful dad joke. I mean, just bad. Roll your eyes back. Terrible dad joke. I always throw it out to our guest. If you have one on standby, I'd love to hear it. If not, we can. We can throw one out for you.

Michael Blanton: Um. An awful dad joke. I thought a dad joke, by definition, was awful, but I. Let me, um.

Doug Lewis: It [00:41:30] is, it is. And that's why I like to. I like to preface that. I want to make sure that we're not. We're delivering exactly what we're promising with this terrible, just awful dad joke.

Michael Blanton: Well, well, not only am I not funny, but I have four young boys who. So we have, you know, books of of dad jokes. Um, and and they don't laugh at me. So here, um, how about this one? So why did the accountant break up with the calculator? You guys heard this one?

Emily Madere: No.

Matt Lescault: No, I have not.

Doug Lewis: Why did the accountant break up with the calculator?

Michael Blanton: Because [00:42:00] she couldn't count on it any longer.

Doug Lewis: Oh, jeez.

Emily Madere: Okay.

Doug Lewis: All right. That might have been the best guest we've ever had yet.

Emily Madere: That was good.

Doug Lewis: More claps, more claps. Nonpolitical and. And a terrible dad joke. That is phenomenal. I love that, I love that. Uh, Michael, thank you for your time. I appreciate you hopping on board here. Perhaps a couple months down the road when we have much more clarity into everything that's happening moving forward in the nonprofit sector. We can have you back, get some updates, see if [00:42:30] everything's either on fire or going swimmingly. So thank you for joining us, Michael. Appreciate your time, my friend, and look forward to having you back soon.

Michael Blanton: Thank you so much.

Emily Madere: Bye.