Blackbaud: Nonprofit Fundraising Out of the Box
Unlike its customers, Blackbaud is unabashedly out to make money. The company boosted net income 60% in the first nine months of 2005 by peddling financial management software to nonprofit organizations, including churches and other faith-oriented groups.
Blackbaud has two core applications: The Raiser's Edge fund-raising system, which tracks data such as donor information and pledge amounts, and The Financial Edge accounting package. The company takes a cookie-cutter approach, tweaking those applications for different nonprofit sectors, including schools, hospitals, museums and churches. For example, alumni associations can opt for a reunion-management add-on.
Key to Blackbaud's success, say its customers, is that it delivers software that works right out of the box. "In the nonprofit world, I don't have the skill set or the budget to build a system like this," says Tim Kobosko, vice president of information services for the U.S. Naval Academy Alumni Association and Foundation.
The 25-year-old company also has a roster of 13,000 customers to back up its claims. "They have a proven record of working with other nonprofits," says Paul Vitanza, director of fund-raising for the Catholic Diocese of Dallas.
The University of North Florida converted from its older fund-raising system to Blackbaud's in six weeks. Rod M. Grabowski, the university's associate vice president for development, says software from a bigger vendor like Oracle would have required extensive customization to provide things Blackbaud includes as pre-built functions. For example, The Raiser's Edge includes a wizard that steps someone through processing a donation.
But sometimes the one-size-fits-most model misses the mark. For example, the World Gospel Mission tracks 2,500 individual fund-raising projects for its 350 missionaries and support staff worldwide, whereas The Raiser's Edge is geared to handle about a dozen large campaigns. "Some of their paradigms don't track to our fund-
raising style," says Tim Rickel, the organization's vice president of communications, though he adds that Blackbaud has been very receptive to customer feedback.
Charlie Cumbaa, Blackbaud's vice president of products and services, acknowledges that the company's top challenge is establishing expertise across diverse nonprofit sectors about such nuances in business processes. Blackbaud, he says, is hiring more sales and services personnel with experience in different nonprofit fields.
"Being an expert in how a given nonprofit operates," Cumbaa notes, "is a different skill than understanding the internal workings of our software."
BLACKBAUD OPERATING RESULTS*
Total assets $141.64M
Stockholders' equity $63.21M
Cash and equivalents $20.70M
Long-term debt None
Deferred revenue $60.95M
Shares outstanding 45.02M
Market value, 11/25 $714.93M
**as of Sept. 30, 2005, Except as Noted