There are more than 1.5 million nonprofits in the United States, receiving more than $240 billion each year in charitable contributions. They are service organizations and charities whose missions are to meet the social needs of the nation and to improve the quality of life of those they serve.

Yet industry figures show that at least one dollar out of every five that nonprofits collect must be used not in support of the mission but in the effort to raise more funds. Nonprofit software provider Blackbaud says that its goal is to use technology and strategic consulting to help nonprofits operate more efficiently - spending less to raise funds so that they have more money with which to work.

"We offer nonprofits a complete array of products and services, all of them the best-of-breed financial services for the nonprofit sector," said Robert J. Sywolski, who became president and chief executive of the Charleston, S.C.-based company in 2000. "Our goal is to help nonprofits use technology to better manage their financial, fundraising and administrative operations."

"We currently serve more than 12,500 customers in 45 countries, with major concentrations in North America and Europe," noted Sywolski. "And both our markets and our customer base are growing. The number of nonprofit organizations in the U.S. grew by 61 percent in the last decade, and we have added an average of 1,300 new customers per year for the past three years."

Humble beginnings

Blackbaud began as a one-room office above a storefront on Long Island, NY.

At the time, there were three employees, six customers and annual revenue of just $86,000. Today, the company is traded on the Nasdaq, with a 94 percent renewal rate, annual revenues in excess of $118 million and a market cap of $394 million.

Blackbaud serves clients across multiple nonprofit verticals, including health and human services; religious organizations; independent schools; colleges and universities; foundations; arts and cultural groups; environmental and animal welfare organizations; and international and foreign affairs groups. Its global customer base includes such high-profile organizations as the American Red Cross, the Detroit Zoological Society, the Mayo Foundation, the New York Philharmonic, Seton Hall University and United Way of America.

"We have successfully grown the company by meeting the unique needs of our industry with a broad range of highly functional solutions," said Sywolski. "Over the past 25 years, we have grown from a small software developer into an industry leader with offices in Canada, Australia and Great Britain. But I think it is telling that we still have our very first customer, the Nightingale Bamford School."

Blackbaud works with its customers to better identify, target and track current and potential donors, and make better decisions about program activities and future growth - all while tracking the overall health of the organization and maintaining a high level of accountability.

Blackbaud's suite of software applications includes The Raiser's Edge (fundraising management), The Financial Edge (financial management), The Education Edge (student information management for independent schools), The Information Edge (a business intelligence tool) and The Patron Edge (ticketing management). Thirty-five modules provide additional functionality to meet the specific needs of customers.

Nearly 1,000 Blackbaud customers rely on the company's Internet-based solutions to extend their fundraising to the Web and build closer relationships with individuals.

ProspectPoint uses proprietary statistical models tailor-made for individual clients who want to more closely identify a donor's propensity to give, and WealthPoint offers information on an individual's ability to give.

Blackbaud's professional services help clients increase the return on their technology investment, offering counseling on implementation, business process improvement, education services, and ongoing maintenance and technical support, among other things.

"A recent McKinsey & Co. study found that nonprofit organizations could free up an additional $100 billion a year simply by making adjustments to the way they operate," Sywolski said. "So a critical part of the service we provide is to automate the management of the nonprofit, particularly in terms of their fundraising."

"Nonprofits tend not be early adopters of technology, not because they don't want the systems, but because they tend to be under-funded and must struggle to find the funds for their primary mission first," he continued. "We understand this constraint, structuring our solutions to help them build their technology base while also making their operations more effective."

With the company well established in its market, the management team is turning its attention to the goals of product integration and the expansion of its network of accounting and technology resellers.

"We continue to see demand on the financial management side for enhancements to The Financial Edge," said Sywolski. "We are finding ways to combine the power of our programs, to do more with the software once the data is collected. We are making continual enhancements and integrating our offerings with other products like The Information Edge, a business intelligence tool. The goal with this integration is to provide the power to access information once it is collected - and to view it in different ways to meet real-time needs for solutions."

Though Blackbaud primarily works with the internal management team of the nonprofit, there is a growing role for accounting firms as partners in the Business Solution Provider program, which offers training, commissions on software sales, and business consulting opportunities. There are now more than 80 BSP locations nationwide, including a number of top accounting firms. The partnership program has grown by more than 500 percent in the past two years, and is expected to be a critical component of future growth.

Blackbaud is a company that takes great pride in its traditions - its leadership role in the nonprofit accounting industry, its world-class service and support, and its network of resellers. But the tradition it cherishes most is one of personal service.

"We're connected to our nonprofits as volunteers as well as solution providers," said Sywolski. "As a company, we operate summer camps. We provide opportunities for our employees to take vacations to volunteer to work for nonprofits of their choice. In fact, roughly 70 percent of our people actively volunteer with nonprofits."

"We operate one of the largest Toys for Tots campaigns of any company in the nation, and have collected close to 10,000 toys for disadvantaged children over the last three years alone," Sywolski continued. "This is a great company, with great people, and great products. And we care."

BLACKBAUD

Charleston, S.C.

(843) 216-6200, ext. 3300

www.blackbaud.com

Year founded: 1981

Employees: 850

Stock: IPO in 2004; BLKB on Nasdaq

Senior executives: Robert J. Sywolski, president, chief executive; Charlie Cumbaa, vice president of products and services; Timothy Williams, CFO.

Offices: Charleston, S.C.; Glasgow, Scotland; Sydney, Australia.

David McClure is the president of Kent Associates, in Alexandria, Va., an independent testing laboratory and evaluation service.

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