March 5, 2007 | Categories Donor Management, Nonprofit News, Nonprofit Technology

Upheaval in the NonProfit Marketplace

Editor’s Note: A lot has changed since this post was written

Since this post was written, Blackbaud purchased Kintera and Convio/Getactive too. DonorPerfect remains independently owned, privately held, has not accepted venture capital funds and has acquired multiple market and philosophically aligned companies (Agena Informatique (now DonorPerfect Canada), ReadySetAuction and DonorMagic to name a few). It is always interesting to look back at previous industry news in the Fundraising and Nonprofit Software space to see how much has changed.

Wow, there’s been a lot of news about software vendors serving nonprofits. In the last month we had:

• Convio buys GetActive
• BlackBaud buys Target
• Kintera’s CEO Resigns

Convio Acquires GetActive

Convio’s move to merge GetActive probably makes a lot of sense. Both companies offered, for the most part, similar Web Content Management solutions for medium to large non profit organizations. GetActive focused on advocacy type clients, while Convio strength lies with web fundraising tools. Personally, I’ve had excellent interactions with both companies, and wish them the best in their merger. It won’t be easy, and the buzz is that they will have some work to do to make sure they are known as ConActive and not “GetConned“. Again, I’ve got faith they will be able to pull it off.

Blackbaud Buys Target Software / Analytics

As for Blackbaud’s purchase of Target Software and Target Analytics- it probably makes sense too. Blackbaud has been traditionally strong for some larger organizations. Of course, I’m a bit prejudiced – though there are many times when DonorPerfect is a better solution, Blackbaud does make sense for some nonprofits as well. However, they lacked a top tier product, one that was capable of handling the largest of organizations (i.e. those organizations with millions of donors). They get access to this market with Target and it was obviously important because they paid through the nose for it- to the tune of $60 million (plus another $2.4 million in potential bonuses, but who’s counting?). This is a pretty incredible number, as it represents more than 2X sales for Target and this multiplier is much higher than when they bought Campagne Associates/GiftMaker Pro last year (for only $6 million).

Kintera’s CEO Resigns

Finally, Harry Gruber resigned from Kintera. This was probably a good move as well in the fact that you didn’t have to do much research on the Internet to find that he had some detractors. Combined with the fact that Kintera’s stock dropped from a high of ~ $17.50 to ~$1.70 as of today and has lost 118 million dollars (not a typo!) since they became public makes this decision easier. Again, we have some joint clients, but it’s been difficult to integrate with Kintera because their software seems to change all the time. I hope they are able to turn it around as there are a lot of organizations depending on them.

Will DonorPerfect Sell Out?

So where does that leave DonorPerfect? Are we going to be the next takeover target?

I really, really don’t think so. Though we get offers all the time, we really have no reason to sell or merge. We have a rapidly growing client base, and we’ve been consistently profitable for over 20 years. Unlike other companies in our space, we have never been dependent on Venture Capital (VC) money, so there is no pressure to sell or go public. (Companies that accept VC money typically have to pay back that money after 7-10 years by selling, going public or filing for bankruptcy and liquidating.)

In fact, here at DonorPerfect we’re thinking about acquiring businesses that share our philosophy and approach – if you know of any, drop us a line!