In this special bonus episode of The Action Catalyst, Southwestern Talent's Martin De Waal guest hosts, sitting down with Jim Siti, CFO of Operation Smile, as he shares how the global healthcare nonprofit is transforming lives by providing cleft lip and palate care to children in underserved countries while building sustainable local healthcare systems through medical training and education. Siti discusses the challenges of scaling a rapidly growing nonprofit in a post-pandemic world, the importance of strategic financial management, and how leveraging offshore accounting talent, process optimization, and AI-powered tools has improved operational efficiency and mission impact. He also offers valuable insights on nonprofit leadership, financial technology, workforce development, and using automation to reduce manual work so organizations can focus more resources on serving communities. This episode is a must-listen for nonprofit leaders, CFOs, finance professionals, and social impact organizations seeking innovative strategies for growth, operational excellence, AI adoption, and mission-driven success.

Martin De Waal: I'm Martin De Waal, Head of Operations for Southwestern Talent, sitting here with Jim Siti, CFO of Operation Smile. Jim, nice to have you with us. Thank you.

Hello, Martin. Thanks very much for having me. Great to be here.

Martin De Waal: Wonderful, Jim. Tell us about who you are, the organization you work for, how long you've been with them, and what your role is.

Great, thank you. I'm the CFO of Operation Smile. We are a healthcare nonprofit. We are known for taking care of children with cleft lip and palate conditions in lower and middle income countries. The organization was started almost 45 years ago now by a couple by Bill and Kathy McGee. Bill is and was a one of the foremost plastic surgeons, really in the world that did this type of work, and Kathy is his wife, and she's she was a nurse and a social worker at the time, and they lived in Norfolk, Virginia. And in Norfolk, Virginia, there's a large Filipino community, and they they just had a lot of friendships and relationships. And some of their colleagues from the Philippines had told them again in the 80s, that there were a number of children with unrepaired cleft lip and palate conditions, and they weren't likely to receive care where they lived. So they asked the McGees if they and some of their other medical colleagues would take a trip over to the

Philippines and take care of those children. And they thought there would be 10 or 15 of them, and they were prepared to do that once, and then sort of get back to the rest of their lives. And then when they got over there, there were certainly more than 10 or 15. I think there may have been over 100, so they were able to take care of perhaps half of them or slightly less. And they said, "Okay, don't worry about it. We'll come back again in a year, hopefully less, and we'll take care of the other half of the patients, and then we'll get on with the rest of our lives. And so, as you can imagine, they came back, and there was there wasn't 50 more; there was 500 more. So, just you can just roll the tape forward, and that just kept happening. And it turns out that there are actually millions of patients in the world. The rough estimate in lower and middle income countries right now is any given time. There's about 7 million patients in need of some level of care, and way less than

5% of them on the planet are getting the care that they need. So the McGees realized that then, and they started Operation Smile, and the organization has grown. We are active in 35 countries, and then the main element of our strategy is we, in addition to providing clinical care, all of our activities and programs are set up to provide very hands-on training for clinicians in the places where we work, so they can eventually and quickly be able to provide the same level of care on their own and within their own health system. And that's really what our strategy is to strengthen and support hospitals and health systems in the places where we work, so they can be self-sufficient.

Martin De Waal: Well, Jim, I must say it seems that you guys have really grown over the years, and you know, scaling might be a challenge, seeing that you've you've grown. So, yeah, what challenges were you and Operation Smile facing in particular that led you to reaching out and looking for client advisory services.

So scaling up the organization-it's always been a challenge, but in the last five years, coming out of the pandemic, it's become a fairly particular challenge. And the reasons are-and these would be common amongst many or most nonprofits, and certainly amongst the colleagues that I have in the sector-we all sort of say the same things. Our organization grew very rapidly. Our donation base, which I thought would contract during the pandemic, actually grew. People were at home and they were very generous, and so our revenues just went through the roof, which was great. Alongside of that, we, as we were getting back to work, coming out of the pandemic, we sort of tweaked our strategy and refocused our strategy to make sure that we were providing activities that were helping build sustainability in local healthcare systems, and there was just a real appetite for that. And so we were able to now that we had more money coming in, we were able to just ramp up our our

operations and our activities also very rapidly, and that's a good thing, and we're still doing that. The scale challenge, however, comes in because by the nature of our organization, we're a global organization. People did get used to working at home during the pandemic, but then coming out of it, people sort of stayed at home. But then we're also in many different countries, so there's silos just by definition, and that's okay. We can. Through that with communication tools, but it gets more challenging because accounting and operational and planning the systems have grown up in many different locations differently. They don't talk to each other. We end up with sort of a Frankensteined global system that underpins our finance, accounting, operations, etc. So you have folks in silo, teams that are in silos with systems that don't really speak to each other, and then the the staff and the teams that work on them have gotten very used to working on the the technology

and the process situation that's been developed somewhat independently, depending upon where they are. And then when you try to put all that together because you want to support rapid growth, just for all the obvious reasons, that becomes very challenging.

Martin De Waal: That makes a lot of sense. So at Southwestern Talent, we provide offshore talent, specifically financial professionals in the accounting, bookkeeping, payroll space, to partner with organizations like yours who are looking for cost savings and flexibility that allow you to put more money focused towards your mission. We're a proud partner with Operation Smile. How was it that we helped your team further the mission so far?

So for me, when I was faced with this challenge, and we were having there was an accounting shortage a few years ago, and it's still there to some extent, although maybe it's getting a bit better. But there was a real shortage three years ago, and we were experiencing turnover. We weren't able to backfill the roles that we needed, and we were running into real like nuts and bolts operational problems because of this. And so, initially, for that reason, I said, "Well, let's look into outsourcing solutions. And so, I was familiar with this concept. You have a unique situation in South Africa where you have a highly talented, highly trained workforce that is because of the economic situation in South Africa. Perhaps is under deployed locally, so supply and demand kicks in. You have a wonderful supply of talent. The different levels of experience and skill set, we were able to match that all together and start to fill in the gaps that we need, and we were

able to do it really, really quickly. I've found it to be fairly easy and very straightforward, and I'll tell you why that's the case. So a few years ago, but even now, as I mentioned, there was a shortage of accountants. But even if there's not finding and recruiting staff to hire takes a lot of time, and we're all busy. We don't necessarily have time to do that. We have an excellent HR team, but they're also really busy. So there, I'm competing with recruiting resources across the organization, and that's okay. They they can service that very well, but ultimately, me and my team are left to figure out if what people say on their resume is actually true, and then so you go through very extensive interviewing and you do some reference checks. It's helpful, but not that helpful, and it's essentially a gamble. And sometimes it works, and sometimes it doesn't, and everybody's familiar with that. But I get to skip all those problems because you all have already

done all that, so you've already vetted the talent pool, and you have a very well laid out. You have some way to match the skill sets and the experiences with what our specific needs are. Needs are, and you can do that really quickly. And it just wouldn't be possible to do that without that service. The second thing is you can do it really quickly. So generally, like a recruiting process takes months and months, and then you go through many, many candidates, and sometimes you have to start over. And this this is just the nature of it. I get to jump to the head of the line on all of those things. That's really, really important. In addition to that, I don't have to be the HR department now. So like, if if something's not working out in a friendly way, we can make changes. So, all of those things are just much more difficult to do if I'm trying to hire people directly. My goals were and still are to have the right firepower. We want enough capacity to do the things that

we need to do. The things that we care about the most are we really care about the money that donors give us, and we want to spend it really, really well. At the top of our list of OKRs, we say in very plain English, "Spend the money well. Spend the money well means most of it goes to what people want us to do, which is take care of kids in lower and middle income countries. They don't want me to spend tons of it on admin and overhead. I could spend a reasonable amount of it on that, but most of it has to go to the mission. That means the the administrative and the administrative and other support services have to be excellent. So not only do I not want to overspend on them, but I want to get the absolute most out of them because I want to spend the money over here really, really well. So while it's it's it is true that the the I guess because of the currency situation, the strength of the U.S. dollar, and just the economic situation in South Africa, as we mentioned earlier, there

is just an underdeployed talent pool. So just the associated costs with outsourcing through a South African firm are just simply less, like often significantly less than they would be here in the U.S. Well, that gives you two options. Like one is like, hey, I can just spend less on my administrative, finance, accounting, other support, and for some organizations, that's that's what they need to do. They're just trying to cost optimize, and that's good. So that's a good thing. That matters to me too, but it's not the main thing. The main thing is that I want all the firepower we can have because it's been the the staff have been selected excellently and very in line with what our needs are. The fact that the costs are lower means I can just have more of it, and the having more of it means we can support the mission better and faster and with better insights, and that kind of thing. So, for me, when you put all that together, that's really the value prop that we've enjoyed, and I

think is more broadly applicable.

Martin De Waal: Well, that's that's good insights, Jim, and we really appreciate the opportunity to add some great value to you and your team at Operation Smile, as you said, so, the value can be added towards the mission. What would you tell other organizations or non-profits who may be feeling the squeeze on their accounting systems who may be hesitant about offshoring?

So I've had this conversation with colleagues, and the questions tend to come in a few different categories, in no particular order. But the questions tend to come in well. One that we get a lot is I hear a lot is like, are you able to meet the regulations and certifications and just other elements of like regulatory requirements and compliance that are necessary? And for us, that hasn't been a problem. The credentialing and the accreditations coming out of the South African system are world class, so that's not a problem anywhere. You have all that at a world class level. So that's one thing that comes up. A second thing that comes up is not everybody's had a great experience with outsourcing in the past. Depending upon what's happened, just what their career experiences have been. And to that, I would say that's true, and I've experienced that as well. But this does just seem to be different. I can get a human on the phone. I can get you on the phone, and

that's just really helpful. So those are two things that come up in terms of what about the fact that somebody's not here in my office, or the fact that somebody's overseas or many time zones away. Yeah, there is a comfort with somebody being down the hall, but the world has moved rapidly towards working remotely and working from home, I don't think that's changing. And for sure, like the younger generations of staff that are coming up are thinking that way. Teams are just getting more used to that, so it hasn't really been an issue for us. What we have found is that people do seem to be able to mostly work in our time zone, so that's been quite helpful, and then sometimes we've actually we've said, "Hey, let's not do that. Let's use your time zone, and we're going to get a longer workday. And so we do a bit of both. And so if you do that cleverly, like you're you're upping your productivity from multiple levels, because we already are able to afford more capability

and just more people. That's great. And then to the extent that it's helpful to stretch the workday out, that's good too. And sometimes we do both.

Martin De Waal: Good insights, Jim. Thank you for that. I understand you've also been using AI to economize and streamline your operation processes. Tell us a little bit about that.

Yeah. So we did start going through some of the more basic tools and technologies that were out there, and we were immediately able to deploy that into the accounting processes that we had already mapped out really well when we first met with you and your team, so we could know exactly where to plug your folks in, and then then we combined the two. So then the the augmented staffing that had come in, working with our existing staffing, then we started pairing them up with fairly simple agents and tools. I'm talking about like bank reconciliations and things like this that accountants and staff spend hours and hours and days on all of these somewhat manual tasks that are important to get done. They don't provide any strategic value, but it's a real problem if you don't do them. Then you can't do anything strategically because your numbers are wrong. I said we have to go after that. Like we want to spend less time on all of this manual work, and I call that

like qualifying work versus winning work. The qualifying work is process everything quickly, accurately, responsibly, and do that in a way that it can then quickly get into the hands of people who can analyze it because the winning then comes in. So I could spend the money better on the mission, but I can't do that if teams were spending most of their time reconciling accounts, chasing down invoices, receipts. Hey, where'd that number come from? Like that's it. That's that was everything was being discussed. And then 10 minutes before the finance committee meeting. There's let's do a real quick analysis of what's in front of us, and that's obviously not enough time. What I've noticed is by like deploying the combination of like well chosen tools, pairing it up with staffing, like my current staffing plus an expanding level of augmented or outsourced staffing talent. Making sure that everybody's trained really well on how to use them, we're seeing

productivity gains like just through the roof, and I I intend to start quantifying those. One piece of just initial quantification, like when we first looked at our main bank reconciliations, I know that's a really basic thing, but it was in a normal work month. There was about a week and a half of like people time just on that.

Martin De Waal: That's a lot.

That's a lot, and I would like all of that back to do other things with. So, so they've been able to cut the time on that by about 80% which is great. That was just the first place we looked. Now we're starting to deploy that to other tasks that have traditionally been done manually or mostly manually, like the processing of expense reports, the collection of reports from third parties or partners, like we're going to turn this loose in our P 2p work throughout the entire accounting cycle and reporting cycle. There are very well understood handoffs that are manual that require lots and lots of accounting time, and you got to give it to somebody else. Yeah, they've got to reconcile it. It's got to go from this system to that one. That's how you get the 75% plus of your time being spent on all this manual work. That it has to be done, so it's very important. But it doesn't provide you any strategic value. You just lose if you don't do it well. So, like we've

adopted the framework of like there's qualifying work that has to be done very well, but do that as quickly as possible to save more time for the winning work, which allows you to think about your mission and make sure that more money is going to what you care about more efficiently, more transparently, etc.

Martin De Waal: So I think it starts with being open-minded and being receptive to you know towards AI. I think what was those initial steps you know that got you to a point where you decided was it because you don't know what you don't know. So I think it's it's important to do that that audit initially.

Sure. As I mentioned to you, I was pretty skeptical, and I didn't know a whole lot, so I it wasn't an informed skepticism. Regardless, we decided to just start small. We just used like some of the off-the-shelf tools like Copilot and ChatGPT, and I use Shortcut AI a lot. And we just started using those to just do some fairly simple things, like create better budget templates. That's just easier to do in in a tool. Let's try to do some light variance analysis at the end of the month. We'll still do it manually, but then let's just do it over here and we'll compare it. And so there was a handful of things like that that me and a small group of team members that also were just as excited about it and open minded about it as I was. We just started doing that. Yeah, me plus three other people. That's how we got started, and then we started bringing some of our other colleagues in, and you know everybody's a little bit skeptical, but they get over that quickly if

you show them some small wins. So the bank reconciliations is straightforward as that sounds like, but it actually does work and it's easier to do and it does it in a standardized way. Okay, everybody can get their head around that pretty quickly. Then the more like bespoke things that we do, or they'll refer to it as like vibe coding your way through some reconciliations, some variance reports for sure, like financial reporting and putting our narratives together based upon things that I've already written. Like we take we took all of our old documents and we loaded them up, and then we took all of our old analytics and we loaded them up into ChatGPT, into Shortcut, into Claude, whichever tool people are comfortable using, we've tried to adopt Copilot as much as possible because we're we're working a Microsoft environment, and that works for most things, but not everything. And then just getting folks used to it. So we did start slow, and we are continuing

to evolve. The other thing that we do that's really important is we, and accountants and financial professionals are all trained to do this. We just weren't trained to do it in AI. We build error checks, insanity checks into literally everything. And the cool thing about accounting is, if it doesn't balance, you're going to know. Now you need to make sure like you're checking the right things that wouldn't balance. But all of that can be built in AI tools, and then you can just check it manually. Like you can literally check the math, and you can literally check the books, and you can literally go check the bank statement and your cash balances. So it can't really get too out of hand on you if you do it a chunk at a time, and you pay really close attention. I would say like the watch out that I have is like if people can get too comfortable with it too quickly, and then they don't pay attention as much, that would be a disaster because the whole bit about it hallucinates

and makes mistakes. I guess that's true. I haven't really seen that, but to me, the mistakes tend to be like we didn't set it up properly, and then we didn't pay enough attention, and then that's how things could go. I've never seen like the arithmetic be wrong. Yeah. So starting small, doing things a step at a time, verify, trust but verify the whole way, and don't stop paying attention because it does look really professional. And you could be fooled into like, well, this must be right because it looks great. And then if you fall asleep at the wheel a little bit, for sure you're going to have problems.

Martin De Waal: I can just imagine. So, what advice do you have to anyone starting a nonprofit or someone who has a nonprofit in the early stages?

I would say at the early stages, or even just getting started, you have a wonderful opportunity of not building an older system. So, like the the systems that have been around forever, the accounting systems, they're I guess they're they're good for accounting, but they weren't really built for the future. So, QuickBooks, Sage, like these are systems that we use. They're very good. They do good accounting work. Those companies are trying to bring them into the future. I get emails almost every day about their new AI feature. My experience is they're not caught up with the the newer companies that are more AI forward. Then that doesn't mean don't use Sage or don't use QuickBooks. Those are very good tools, but there are new tools that are coming out that you could just take your time to learn about. And the way that it's evolving is like FP and A tools are just different than accounting tools. And so we made the mistake of trying to figure out how to let one

of them do both of those things. And at this point in time, I'm not really seeing that you can do that. But you also don't have to do that. Like you, you can make the decision. Well, my ERP or my general ledger can be my source of accounting truth, and if you set that up properly, and AI can help do that, then you probably don't have any problems for a while. Then there are other tools that are productivity tools or FP and A tools and planning tools that can live alongside of that. And I think if you if somebody is just getting started now, or and even if they're not, even if even if they were where we were a year ago, like take a really hard look at that. It makes sense to do the project of mapping out the processes, writing down what are the things that you really care about, and it might not just be obvious. Like the things that you care about in accounting, like I need to close the books, I need to pay the bills. Those are all important things, but that's not what the

company cares about. Like, if you figure out, like for us, I know getting the money to the right places for the mission on the right schedule to the right people, with the right controls and processes, like those are the winning things. The accounting supports that. So, in taking a look at the accounting and the tools and productivity tools. I would say you need to start with like what do we ultimately care about, and then I'm going to get the money there to support what we care about. And if you skip that part, for sure you're going to get this the second part wrong, which is how do I then address the finance tech stack to support that and all the processes that go with it. And it has to go beyond just closing the books and paying the bills. You got to do that too. Be what comes out the other end to support the mission is generally a different type of information, and that that you have a wonderful opportunity to just think that through now. And it's a little bit confusing

because every day a new tool comes out. I don't really know what to say about that other than to just I'm just reading as much as I can. I'm not making any major changes right away because I I am concerned if I were to go implement something big that it would be antiquated quickly. Yeah, but I don't have to go buy a big system for anything. We're just kind of slowly moving our way forward, and so far we're sticking with the major systems that we have already. A year or two from now, that might not be true. So far, so good.

Martin De Waal: Yeah, and it's it seems that you know with all the tools and the technology at your disposal, it is just a bit easier to start a nonprofit than it was a couple of years ago. I mean, you guys have been around, you know, like for ages. And I think Operation Smile can be very fortunate having somebody like you that's open-minded and receptive to to new tools and AI and at your disposal. So it seems that what you that's what you're saying.

Yes, absolutely.

Martin De Waal: So, what's the best part of your job? What really gets you fired up about what you do?

Oh, well, so we have an excellent mission. So, by doing our work better, by doing finance, accounting, and support work better, that helps other teams raise more money, and the raise more money goes to other teams that can take care of more kids. That they can also train more healthcare workers. They can support more health systems. We can also provide wonderful career and education opportunities for our staff and folks that are interested in it. In this period of rapid growth and uncertainty, that can be scary, but on the other side of that is like, hey, you get to learn a lot of really interesting new stuff that is excellent for your career if you embrace it. It'll be horrible for your career if you don't embrace it. But so just don't do that. You should embrace it, and then the accounting staff and the other teammates that we have, like we say to them all the time because they'll ask questions like, "Hey, is AI going to take my job? Not not if you don't let it.

Like if you learn about it, then it can really grow. So that excites me too. So the good thing about all these items that I've mentioned is like the savings or the benefit like drops like a rock to the bottom line. Like the bottom line can be like literally the bottom line, like the money that we can go spend on what we do for a living and take care of more patients, etc. It also frees up some resources to provide trainings for staff, and you can see that you can see you can see the smile on their face. You can see them enjoying that their work got easier and more interesting. I hear them laughing sometimes. Where like accounting departments are sort of famously quiet, and now it's a little bit more yeah. A little bit more lively because they're having a good time with what they're doing because they're they've been able to automate some of the manual stuff that is just not enjoyable and then in automating that and freeing up their time they're getting to think a little

bit more and they're coming up with creative ways to do other things and it's exciting and that was never true before.

Martin De Waal: That's quite interesting. So if anyone is interested in more information about Operation Smile or learning more about your mission. What can they do?

Yeah, so I mean, we are we we have a great website. I would say look us up online. We're Operation smile.org. We are very prolific in social media. We're kind of everywhere. Yeah. So I would say that's the best way to do it.

Martin De Waal: Well, Jim, thank you very much. We really enjoyed having you here. We thank you for your time, and we're really fortunate and very glad to be part of Operation Smile and to your continued success.

Great, thank you very much.

Martin De Waal: Thank you.