Operating a nonprofit that acts like a manufacturer strained operations for the growing charity.
Arts education has been on the decline in primary and secondary schools in the U.S. for years. Art in Action, a nonprofit focused on art education for children, is working towards changing that narrative.
The creativity nurtured by vigorous art instruction is a key component of tomorrow’s workforce. Art in Action aims to spur those creative skills by offering art curriculum, course materials and training to students across the country.
Art in Action (opens in new tab) was founded in 1982 by Judy Sleeth, a concerned parent who had enrolled her child in kindergarten only to find no art instruction available. Judy began by creating her own art lessons and teaching them to the class, and then growing to other local schools through word-of-mouth.
Today, Art in Action reaches 85,000 students in 32 states, with over half those students in Title 1 schools in low-income communities. Art curriculum packages can be purchased by schools, parent volunteers, or even corporations wanting to sponsor art curriculum.
For most of its history, to support its operations, Art in Action used desktop accounting software that handled basic accounting functions - but not much else. The organization dealt with some unique complexities, as it functioned much like a manufacturer.
“Because we are delivering boxes of art supplies and training materials to schools, those boxes need to be accounted for in the same way a manufacturer performs accounting by client, by job, or by site. You have to segment out all income and expenses attributed to a given entity,” said Christian Edoria, VP of operations and finance at Art in Action.
Edoria was initially brought in as a contractor to Art in Action to oversee the company’s bookkeeping and financial reporting. As he delved into the organization’s business processes, he found numerous gaps that were hindering Art in Action’s growth.
“Our previous accounting software wasn’t capable of many of the accounting functions we needed, so I ended up exporting a lot of data to spreadsheets and manipulating it myself,” he said.
Without being able to perform allocation accounting common in the manufacturing industry, Christian was on his own when it came to creating tax reporting for donor letters, audit statements and metrics demonstrating the efficacy of Art in Action’s programs. On top of that, slow invoicing and accounts receivable processes created customer delays and poor cash flow, and Art in Action had zero visibility into the cost of art boxes.
“From a customer placing an order to shipping it out of our warehouse could take up to 2 weeks, because of a backlog from our CRM to the previous accounting software,” said Christian. “We have 42 combinations of art bundles and we didn’t know what each one cost.”
At the same time these workflow gaps were surfacing, Art in Action revealed some hefty goals: the organization wanted to reach 200,000 students and accurately measure the efficacy of their art programs.
Art in Action needed to get a handle on industry-specific accounting requirements, streamline processes, and meet aggressive goals. It chose and launched the NetSuite platform in September of 2018.
Allocation tracking in NetSuite proved to be the most powerful functionality for Art in Action, as most of its process gaps could be addressed as a result. Today, Edoria can enter allocation percentages directly into NetSuite and pull custom reports, with no external manipulation required.
That means getting donor letters out faster, closing the books 10-15 days sooner than before, and easily tying income and expenses to art bundles to demonstrate program effectiveness.
And inventory tracking helped to address the warehouse order backlog and drive greater visibility of art bundle costs. Orders now ship within 48 hours and bundle prices are readily available.
“As soon as a sales order is entered it goes directly to the warehouse team. Faster shipping means we get cash faster,” said Christian. “And with an awareness of bundle costs, we can work to reduce prices to serve more students.”
Art in Action has taken advantage of Oracle NetSuite Social Impact’s Suite Pro Bono activities including the Hackathon 4Good and Buildathon 4Good events. The organization was able to learn valuable ways to improve their work flows with NetSuite employees at the most recent Buildathon 4Good held in Redwood City where they were matched with NetSuite employees to support their mission.
“We were having trouble tracking orders that were built, but not yet fulfilled. As a result of working with our Buildathon 4Good team, we were able to create a clear, efficient process on tracking orders. “The Suite Pro Bono team has made a significant impact on our production process,” commented Christian at the end of the day.
With more time, confidence and flexibility in their accounting data and operational systems, Art in Action is poised to focus on their singular goal: reaching students in need with high-quality art curriculum.
“With NetSuite, everything was intuitive and exactly where I thought it would be,” Edoria said. “The ability to customize fields made the process of addressing our unique requirements that much easier.”
Learn how other nonprofits like Art in Action improved business outcomes using NetSuite.
