your measurement is wrong. when printer ask for 1/8" bleed. it means we add 1/8" allowance on all 4 size. I am a printer so I know this stuff. don't see the PSD file. only show PNG file here. most guys here just enlarging/stretching the size but when your printer prints and trim the paper, you are risking the "A Non-Profit" line getting cut off.
The truth is that the contest holder already wasted much money to get this done. He had an old business card design and wanted to resize it. After that he opened a new contest to make him a brand new business card design. When he finally picked the winner entry, he asked others to resize him. The designer who won that contest don't capable to make the prompt size? It's very ridiculous. I offered the contest holder my services, but he made a choice and he went the hard way. It's his decision. That's my opinion. Have a good day!