Salsa, DonorPro Announce Deal

November 5, 2015       Mark Hrywna      

A long rumored deal between Salsa Labs and DonorPro has been consummated, with the two firms announcing what they are calling a merger. The combined companies will be called Salsa Labs and will retain offices in their current locations of Bethesda, Md., and Wexford, Pa., near Pittsburgh.

Salsa shareholders will have a majority stake in the blended firm, said Scott Stouffer, chief executive officer of Salsa. Donna Myers, president of DonorPro, will become chief operating officer of Salsa and will be based in Wexford.

Salsa is a provider of an advocacy software and platform. DonorPro is a constituent relationship management system (CRM). The two products will integrate to create one solution but they will also be available à la carte. DonorPro is cloud-based.

Product branding and pricing has not yet been determined. Salsa has just shy of 60 employees and DonorPro has 35. All are expected to remain with the firm.

Financial terms of the deal were not disclosed. Salsa has previously received multiple rounds of venture funding. It received $5 million in venture funding in 2014 led by Edison Ventures. It included the largest-ever investment by the Maryland Venture Fund (MVF). As part of the MVF funding, Salsa Labs moved its headquarters to Maryland and expanded its product with a target toward small nonprofits.

Edison remains a central component of the combined companies as primary lead investor, said Stouffer, who declined to provide details regarding the financial arrangements.

It was known throughout the nonprofit technology world that Salsa had been seeking a deal for at least a year, to either be acquired by a firm with a strong CRM platform or to acquire such a platform. Combining an advocacy component with CRM is the evolving technology pattern for fundraising, advocacy, donor management and communication with constituents.

The companies combine for 3,000 clients but have just four in common, according to Myers. She explained that the typical client has from 2,000 donors up to 100,000 with revenue between $1 million and $25 million. The firm does have a handful of clients with greater revenue and larger databases, she said. “This is a tremendous opportunity,” she said of the lack of client overlap.

Managers of the two firms have been talking since the spring, said Stouffer. The conversations started being whispered about during the Association of Fundraising Professionals’ annual conference in March. Stouffer said much of the time since has been spent ensuring that corporate cultures were a match, that customer profiles were compatible and that there was data sync.

Myers said the combined product line would focus on affordability, usability and giving clients a map of how to successfully use the tools. “Supporters want to be communicated with on their terms and on their turf. They simply will not respond to ‘one-size fits all’ messaging,” said Myers.

Stouffer said it’s about building expertise on best practices into the technology because the existence of smaller to mid-sized organizations is being threatened by larger organizations with the financial ability to deliver sophisticated engagement strategies.

“It has gotten very polluted out there,” said Stouffer. Knowing a donor, donor prospect or advocate “is more than knowing behavior,” he said, adding it’s about providing exceptional content across various media for engagement.

During the next several months, the focus for the combined organization will be on integration and product development with an emphasis on intuitive, user-friendly interfaces and mobile accessibility. The organization will also be launching new education tools to help nonprofit professionals understand their data and take action.