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May 30, 2008

Technology Company Merger: What Does It Mean for Fund Raisers?

The news that Blackbaud, the nation’s largest provider of fund-raising software, plans to purchase Kintera, a struggling competitor, is attracting concern among some nonprofit officials.

The anonymous fund raiser who writes the blog Don’t Tell the Donor writes that while Blackbaud’s “press release seems almost giddy, I’m not so sure nonprofits will be thrilled that their viable options for major providers continues to shrink. If I was a shareholder in Blackbaud, I would be concerned that $46-million is too much to pay for a provider that seemed destined to go out of business anyway.”

Shareholders do have reason to be concerned according to one financial company. Market analysts at William Blair & Company downgraded Blackbaud’s status, notes the financial site New Ratings.

“In a research note published this morning, the analysts mention … that Kintera has a weak record of delivering shareholder value and has been incurring losses for a long time. Kintera has substantial net operating loss carry forwards of $10-million on a net present value basis, which might reduce the purchase price to $36-million.”

What do you think? How will this change affect the technology options available to nonprofit groups? Share your thoughts by clicking on the comment link below.

Friday May 30, 2008 | Permalink

Comments

1. Blackbaud seems more strategic than intent on providing nonprofits with varying types of fundraising/donor management software packages. Today, there’s less choice than ever. For instance, if you are a small to medium sized nonprofit, despite having great fundraising aspirations, you may not need a very major donor – strong software package, such as Raiser’s Edge – but it is of a certain quality (e.g. all of the features your organization does need are there – but with more than you might need – but will definitely pay for). If Blackbaud was providing a few donor management software or fundraising choices at various price points that would be great. They don’t (anymore). It forces small to medium organization to consider building their own solutions (via Access) or worse, do things with less sophistication such as manage donors on Excel.

   — Arlene Spencer    May 30, 02:27 PM    #

2. Blackbaud’s strategy is based on providing a broad spectrum of the best solutions possible to serve the needs of all nonprofits, whether they are a small to mid-size organization using eTapestry (where very small organizations can use the software for free if they have less than 500 users), or a wide spectrum of high-touch organizations using The Raiser’s Edge for major donors, or large national and international organizations using Team Approach or Blackbaud Enterprise CRM for high-volume fund raising and marketing. Similarly, the Sphere platform will enable nonprofits to do high-volume events and team fund raising through “Friends Asking Friends” while Blackbaud NetCommunity offers an option for high levels of stewardship and CRM-driven online experiences, powered by The Raiser’s Edge. We are committed to maintaining options that are as unique as the nonprofits we serve.

   — Jerry Zink    May 30, 04:49 PM    #

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