Blackbaud Q3 Earnings Boost Stock Price

Blackbaud announced third-quarter financial results yesterday, reaffirming estimates for 2018 that were revised earlier this month.

Half of the revised outlook on revenue for the Charleston, S.C.-based software and technology firm was from a reduction in one-time services revenue as it shifts to subscription-based recurring revenues.

During its annual bbcon user conference earlier this month in Orlando, Fla., Blackbaud announced a new Cloud Solution for Faith Communities, Cloud Solution for Higher Education, introduced a new Education Management portfolio, and a new partnership with Microsoft with an Integrated Cloud Initiative for Nonprofits.

“We are driving digital transformation in each of the industry segments we serve through the delivery of innovative new cloud software technology, which has expanded the addressable markets for Blackbaud,” President and CEO Mike Gianoni said via a press release announcing financial results for the third quarter ending Sept. 30.

“We’ve been executing a new and more aggressive program to ramp hiring for sales and sales support roles in the third quarter,” Executive Vice President and CFO Tony Boor said. “This is considerable opportunity for Blackbaud to better cover this large market and further improve our sales effectiveness. We’re well underway in the hiring program with the expectation that will begin to see material top-line return on these investments in late 2019 and more fully in 2020,” he said.

Total GAAP revenue was $209.5 million for the quarter, up almost 8 percent over the third quarter of 2017, representing 90 percent of total GAAP revenue. GAAP recurring revenue was up more than 12 percent.

GAAP income from operations decreased 14 percent and non-GAAP income from operations was down 6.4 percent. GAAP net income declined almost 13 percent to $11. 2 million. Non-GAAP net income increased 4.4 percent to $28.4 million and non-GAAP free cash flow declined $1.3 million to $57.8 million.

Blackbaud reaffirmed its 2018 full year financial guidance, after lowering estimates on Oct. 8, anticipating non-GAAP revenue of between $844 million and $854 million, compared to previous guidance of between $870 million and $890 million.

Non-GAAP operating margin of 19.3 percent to 19.6 percent was down from the original estimates of between 20.6 percent and 21 percent. Earnings per share were reassessed at $2.44 to $2.52 from an original $2.75 and $288 per share. Free cash flow is estimated at between $143 million and $147 million.

The stock, which trades on NASDAQ under the symbol BLKB, was up almost 8 percent by late morning to more than $73 per share. It lost about a quarter of its value in late September after spending most of the year trading above the $100 mark.

BLKB hit a 52-week low of $65.51 in trading on Monday, almost half of its 52-week high of $120.35, reached in July. The board declared a fourth quarter dividend of $0.12 per share, payable on Dec. 14 to stockholders of record on Nov. 28.

Oracle NetSuite Expands Pro Bono Tech Help

Oracle NetSuite announced it is expanding its NetSuite Social Impact program, including product donation, pro bono expansion and online community building. The initiative is to help nonprofits move more financial operations to the cloud and away from on-premises software and storage.

“The NetSuite Social Impact program has helped thousands of nonprofits and social enterprises in the last 12 years, but this is just the beginning and there is so much more we can do,” Evan Goldberg, executive vice president of development, Oracle NetSuite, said via an announcement.

The increased investment in the NetSuite Social Impact program of the San Mateo, Calif.-based technology firm is focused on three core areas:

* Suite Donation: To help nonprofits rapidly implement new business systems in the cloud, NetSuite adding to its Nonprofit SuiteSuccess. In addition to the software donation, every Social Impact customer will receive an activation of the solution at no cost. Best practices from NetSuite’s other nonprofit implementations are in the activation.

* Suite Pro Bono: NetSuite is extending the reach of this program to all areas of professional assistance. The expanded program, which includes skilled pro bono and executive coaching, will be delivered by more than 6,000 NetSuite employees, partners and customers in a variety of areas from marketing to financial management. It initially was simply technology engineering but will now include marketing and others aspects of running the organization.

* Suite Capacity: NetSuite expanding its online learning resources to launch aa online community and knowledge center. The extended online resources and educational opportunities will include guidance on leading practices and education that builds confidence, skills and success.

For more information, go to: https://bit.ly/2SmcCSy

Nonprofit Affinity Credit Cards Still Bring Engagement, Cash

Affinity credit cards still work for breast cancer charity Susan G. Koman despite some of the negative buzz about them, according to Christina Alford, senior vice president. SGK’s card is part of a broader relationship with Bank of America. It has brought in $8 million since its launch in 2009 and has included ancillary benefits such as indirect marketing and donor engagement.

Despite these potential benefits, charity affinity credit cards have been the subject of public criticism over the years, numerous reports and news articles pointing at the relatively small per-dollar contribution to the participating charities. Leaders at CharityWatch, a Chicago, Ill.-based watchdog group, have not actively tracked cards, but have generally recognized cards as not being a particularly effective way of supporting organizations.

“If an individual is really interested in maximizing charitable giving and they are relying on an affinity credit card to do that, it probably doesn’t really do that,” said Stephanie Kalivas, analyst.

Kalivas recently took time to review affinity credit card terms and could not find rates better than 0.08 cents on the dollar, she said. That means that if a donor spent $10,000 with the card each year the charity would get just $8. Such low payouts might make cards a solid means of buttressing donors’ philanthropy without much additional thought.

Kalivas suggested that consumers find cards with the best cash-back rates and then take the extra step of donating those dollars directly to charity. “Understand and know your own benefit,” Kalivas said. “Go with the one that makes more funds for you to take the extra step to deliver that money. If you know you won’t remember, maybe [an affinity card] makes sense.”

Alford has heard such pros and cons, but disagrees with the notion that there is a “best way to give.” Allowing supporters to enjoy the same rewards and rates as they would otherwise receive with other credit cards, all while tallying up dollars for the organizations seems to be a win-win.
“I don’t know of a better way for people to engage without really thinking about it,” she said.

Komen has found particular success in marketing cards to participants of its 3-Day events. Supporters willing to walk 60 miles in three days are fair bets to be willing to use a credit card emblazoned with the organization’s pink ribbon, according to Alford. Little else has changed with the organization’s marketing of the card, aside from increased focus on digital and social-media marketing. Supporters can now activate cards by texting KOMEN to 42690.

Banks tend to pave the paths for the cards and Alford said that there is no indication that the cards or the strategy associated with them will change in the coming years. “There’s no magic 8-ball,” she said. “For us, it’s about providing deeper levels of engagement.”

That engagement includes a larger partnership with Bank of America. The financial giant, in addition to partnering on the card, has funded mission work, engaged customers during Breast Cancer Awareness Month, and sponsored events across the country, including Race For The Cure.

The Komen card has also built a dedicated following. Komen’s target supporter audience tends to be women between the ages of 35 and 55, the precise demographic that typically makes the bulk of household retail purchases. The intersection makes for a “beautiful alignment,” Alford said.

Cards also allow supporters to publicly display their support and also have the indirect marketing benefit of creating conversation starters at the checkout line. Anecdotally, Alford said that she is often asked about her card while getting rung up at the store.

“It does the marketing for itself when you use it,” she said. “That, to us, is one of the values.”Nonprofit Affinity Credit Cards Still Bring Engagement, Cash

Blackbaud Stock, Revenue Projections Drop

Revenue estimates for the year at Blackbaud will miss by as much as $36 million causing the stock, already under pressure, to drop yesterday to a 52-week low.

Executives blamed a slowing in the transition to subscription services and its associated recurring revenue, as well as softness in the United Kingdom and how students pay their tuition.

Blackbaud’s stock opened today at $78 per share (BLKB-NASDAQ), up slightly from its low of $69.62, which is down 30 percent for the past three months. The slide continued, down to $74.54 by 10:15 a.m.

The stock’s 52-week high was $120.35.

The Charleston, S.C.-based software and technology firm announced non-GAAP revenue of between $844 million and $854 million for the year, compared to previous guidance of between $870 million and $890 million. The non-GAAP operating margin dropped to between 19.3 percent and 19.6 percent from 20.6 percent to 21 percent. Earnings per share was reassessed to between $2.46 and $2.52 per share from $2.75 and $2.88 per share.

In a call with analysts, Blackbaud officials said the reasons for the reductions were three-fold:

* Reduction in one-time services revenue resulting from the business model transformation toward subscriptions-based recurring revenues. It represents roughly half of the updated change in outlook;

* Reduction in transaction-based revenue associated with recent shift in trends in consumer behavior within the United Kingdom; and,

* A shift in the mix of payment methods within the company’s Tuition Management business, and fewer, major one time-events during 2018.

Blackbaud Releases Student Experience Cloud Product

You can never get a donor started too soon. That’s the intention of an implementation of a Blackbaud product targeted to get higher ed students giving and fundraising while still on campus.

Blackbaud unveiled its Cloud Solution for Higher Education today during its annual bbcon 2018 user conference in Orlando, Fla. It’s an adaptation of its commercial solution for private K-12 schools, said Tim Hill, president and general manager of Blackbaud’s higher education division. The Cloud Solution for Higher Education include enables universities and colleges to advance their institutions with increased revenue, deepen alumni engagement and enhance community outreach, connect departments and students, and improve the student and alumni experience through high-impact lifecycle management, according to Hill.

The Education Management portfolio includes student information, recruiting and enrollment management, school website systems and learning management, enabling institutions to build a connected campus.

The challenge for schools, said Tiffany Crumpton, director of marketing for the higher education division, is to develop programs that resonate with students, “outreach to those students to give even small amounts on a regular basis.” The plan is to use predictive modeling to get students chatting up alumni for gifts, particularly on the phone, she said.

The Cloud Solution for Higher Education combines fundraising and relationship management, analytics, financial management, grant and award management, and marketing with the new education management capabilities.

Blackbaud also announced the addition of the following solutions for higher education:

  • Blackbaud Stewardship Management:  This software helps to collect quality impact statements and share them with donors. Blackbaud Stewardship Management enables education institutions to collect communication from scholarship beneficiaries and provide it to donors, providing personalization and connectivity at scale.
  • Blackbaud Guided Fundraising: Made possible by Blackbaud’s acquisition of Reeher in May 2018, Blackbaud Guided Fundraising provides automation, and project management capabilities for annual giving teams to scale a multi-channel, person-to-person fundraising strategy. It enables coordinated phone, email, SMS, direct mail, and online payments. Students can engage with donors directly via personalized messaging across multi-channel communications streams while ensuring effective engagement through algorithm-driven predictive segmentation and real-time donation processing.

To learn more, visit Blackbaud’s Cloud Solution for Higher Education Institutions.

Tech Firms Targeting Nonprofits Secure Millions In Funding

Two more fledgling fundraising technology companies recently secured private capital to finance growth in the next year.

iDonate, an 8-year-old online fundraising firm that got its start with a focus on noncash donations, announced it secured $10 million Series A funding.

OneCause, formerly BidPal, announced that it closed on $4 million of new growth financing to continue to accelerate development of its mobile fundraising platform, including online giving, event management, mobile bidding and peer-to-peer social fundraising.

iDonate will “augment its platform with the next generation of donor-centric features,” and accelerate growth in enterprise donor engagement through new personalized connections, analytics dashboards and peer-to-peer giving, according to an announcement. The Dallas, Texas-based firm, which touts itself as the “all-in-one platform for engaging donors,” will unveil new capabilities in the fourth quarter and increase staff.

Launched in 2014 with $3.5 million in equity funding, iDonate has 20 employees and expects that number to rise as a result of the funding, with additions in sales, marketing and development. Features to be released during the fourth quarter of 2018 and first quarter of 2019 will include data analytics upgrades and “significant upgrades to both peer-to-peer and donor engagement functionalities.”

PerformanceEdge Partners (PEP), a Scottsdale, Ariz.-based venture capital firm focused on small, medium-sized and software-as-service (SaaS) businesses led this round of funding. Additional funding also came from existing and new investors, including the Miles Foundation in Forth Worth, Texas.

iDonate reports more than 700 nonprofits clients and strategic channel partners, such as LifeWay, that are marketing to more than 50,000 churches, according to CEO Ray Gary.

The online platform includes multiple giving channels, including web, peer-to-peer, text and event, as well as noncash giving and chapter and affiliate fundraising.

PEP is a business acceleration firm that was launched in 2008 for SaaS technology companies that provides investment capital and management services to high-growth businesses, specializing in small and medium-sized businesses.

The $4 million for OneCause was led by Chicago-based MK Capital, with participation from Allos Ventures and a new investor, WinTrust Ventures, according to a press release announcing the investment.

Indianapolis, Ind.-based OneCause has about 110 employees and 2,400 clients after its acquisition this past spring of Great Feats in Austin, Texas, which was founded in 2014 by former executives at Convio.

“There has been explosive growth in the nonprofit software industry and an increasing demand for year-round fundraising solutions that help nonprofits expand their reach beyond the ballroom,” Kirk Wolfe, general partner with MK Capital, said via the press release.

OneCause had gone by the name BidPal until a rebrand this past January, keeping the name BidPal for its mobile bidding product. The company announced in December 2016 that it raised $6 million equity, also led by MK Capital and Allos Ventures, to accelerate product development and business expansion. The funding went to hire 26 full-time employees last year, including senior leaders in product development, sales and finance, credited with expanding SaaS subscriptions by 35 percent during 2017.

OneCause CEO Steve Johns said the company has seen record growth this year, with software subscriptions up almost 40 percent over 2017. Since it was founded in 2007, OneCause has helped nonprofits raise $1.5 billion for their causes and connect with 1 million donors annually.

Tech Impact, Idealware Set Merger Plan

Two providers of nonprofit technology education and training will become one in a merger announced today that will become effective Oct. 1. Tech Impact and Idealware will combine business operations over the next year.

The two nonprofits have been independent leaders in nonprofit technology capacity building for more than a decade and expect a merger will be able to provide greater scope of service and support to organizations. Tech Impact provides nonprofit technology solutions and operates IT training programs for underserved youth. Idealware provides “independent, researched technology resources for the social sector.”

Under its own program and branding, Idealware will continue to offer free webinars, online courses, and on-demand learning experiences taught by Idealware expert trainers while Tech Impact will continue to offer free technical webinars taught by staff experts. By merging, the nonprofits expect to be able to provide a greater scope of service and support, “giving nonprofits coordinated access to a wide range of impartial technology education, publications, and services,” according to an announcement on the deal.

Tech Impact has long viewed Idealware as an essential capacity builder in the sector and has sponsored several Idealware publications over the years, according to Patrick Callihan, executive director of Tech Impact. “We couldn’t be more excited to welcome the Idealware team into the Tech Impact family and are eager to expand our service offerings and continue our mission of helping nonprofits do more good in the world,” he said in announcing the merger, which was months in the making.

“We knew that, in order to make a quantum leap in our impact, we would have to partner with organizations that share our goal of unlocking the power of technology for social good,” said Karen Graham, executive director of Idealware, via the announcement. “This merger gives us a chance to do that,” she said in an email to supporters.

The merged organization will be known as Tech Impact and will maintain all current offices. Tech Impact’s global headquarters is located in Philadelphia, with offices in Delaware, Washington, D.C., and Las Vegas, Nev. Idealware is based in Minneapolis, Minn. Idealware will continue to use its name and brand as a program of Tech Impact. Graham will be director of the Idealware program, reporting to Callihan, who will continue as executive director of Tech Impact.

Graham doesn’t expect any dramatic changes to current research and training programs and the organizations are exploring possibilities to offer new programs together.

Idealware reported total revenue of $512,101 in 2016, the most recent year available, and net assets of $28,210. Tech Impact reported revenue of $5.6 million and net assets of $2.6 million in 2017.

Online Survey Shows Donors Like To Give There

Online giving through a credit card or debit card is the preferred method of giving by donors worldwide, consistently near 50 percent or more, regardless of generation, size of gift or geography.

The 28-page Global Trends in Giving Report (givingreport.ngo) was released this week, sponsored by the Reston, Va.-based Public Interest Registry (PIR) and researched by Nonprofit Tech for Good.

More than half of donors worldwide (54 percent) said that they prefer to give online with a credit card or debit card and it was the preferred option by a wide margin. No other option was preferred by more than about 1 out of 10 donors:

  • 11 percent, direct mail/post;
  • 11 percent, cash;
  • 10 percent, bank/wire transfer;
  • 9 percent, PayPal;
  • 4 percent, mobile app/wallet; and,
  • 1 percent, text message.

The preferred method of online giving was consistent across Millennials, Generation X and Baby Boomers. Online giving by credit or debit also was fairly consistent across gift sizes, ranging from 45 percent for major donors ($10,000 or more) to 57 percent among small donors ($101 to $1,000). By geography, online giving was still the preferred method by almost half of donors but lowest in South America and Europe (46 percent).

The second edition was based upon a survey of more than 6,000 donors worldwide, conducted and promoted entirely online between April 23 and June 30. Results only represent views of respondents who read Arabic, English, French, Portuguese, or Spanish; have Internet access; and use email and/or social media. The report examines the impact of gender, generation, ideology, religion, and donor size upon giving and volunteerism, summarizing “donor data across six continents about how online and mobile technology effects giving.”

The preferred method of being thanked for a gift was, by far, email, with almost 7 out of 10 donors. About 14 percent of donors preferred a print letter while the remaining options all registered less than 10 percent:

  • 6 percent, text message;
  • 5 percent, print postcard;
  • 4 percent, social media message; and,
  • 2 percent, phone call.

Only about 1 in 5 donors are more likely to give if they are offered a gift. About 68 percent of those who responded said they view it as a waste of money while 36 percent said they don’t need or want a gift. About 6 percent cited the environment impact of the gift.

Almost half of donors worldwide (45 percent) are enrolled in a monthly giving program. About 40 percent of Millennials were enrolled in monthly giving compared with 49 percent of Generation X and Boomers.

Social media (29 percent) and email (27 percent) were the communication tool that most inspires giving, according to donors. A website (18 percent) and print (12 percent) were less likely to inspire giving, followed by television ad (6 percent), phone call (3 percent) and radio ad (3 percent). Rounding out the bottom of the list were a messaging apps and text message (1 percent each).

When it comes to specific social media, more than half of donors (56 percent) cited Facebook as the channel that most inspires giving. About 1 in 5 pointed to Instagram, which is owned by Facebook, followed by Twitter at 13 percent. YouTube was cited by 6 percent of donors and LinkedIn by 4 percent, followed by WhatsApp, 2 percent and Google+, 1 percent. Other channels all registered less than 1 percent, including Pinterest, Reddit and Tumblr.

Slightly more than two out of five donors said they donated to crowdfunding campaigns that benefit individuals. Almost half were associated with medical expenses (27 percent) or family medical emergencies (17 percent). Some 17 percent were for social enterprise startup costs, followed by education costs (12 percent) and disaster relief (10 percent). Less common were crowdfunding contributions toward volunteer expenses (8 percent), veterinary expenses (6 percent), and funeral expenses (3 percent).

About 16 percent of those who give to crowdfunding in campaigns said they donate less to nonprofits due to their financial support of such campaigns.

One-third of donors worldwide give tribute gifts to family and friends, primarily (43 percent) as a memorial, but about 1 in 4 on the occasion of a birthday but 24 percent cited an unspecified “other.” About 1 in 10 gave on the occasion of a religious holiday, followed by 3 percent for a wedding, 2 percent on a new baby, and 1 percent for graduation. Fourteen percent of donors worldwide have created an online, peer-to-peer fundraising campaign.

Females (35 percent) were more likely than males (21 percent) to give tribute gifts. Baby Boomers (41 percent) also were more likely to give as tribute than Gen X (31 percent) and Millennials (26 percent).

Nonprofit Tech In Italy Not Molto Bene

It appears that American charities are not the only ones having trouble with going digital. According to Italia Non Profit, leaders are having trouble getting their arms around digital’s potential, yet it still plays an important role at organizations. Italian nonprofit leaders were asked a series of questions via an online questionnaire by Italia Non Profit.

The results showed that 40 percent of board members do not have a clear vision of what digital can do, slightly more than one-third (34 percent) use it but don’t have a plan in place. Just 23 percent of the respondents said that digital is incorporated into their complete program.

And, just like in the United States, search engine optimization (SEO) and cybersecurity remain a mystery for many Italian nonprofits, although email messaging and social media seem to be under control. Some 56 percent of employees said that increasing digital skills has a positive impact on fundraising, and 39 percent on advocacy.

The biggest challenges for both charity professionals and consultants however were not being adequately prepared for digital fundraising, SEO, data management and privacy issues, and how to engage new audiences.

And, just like in the U.S., putting the technology in place is a challenge with 40 percent citing a lack of funding and another 37 percent requiring staff with better skills. For more on this, go to https://italianonprofit.it/

6 Tips For Raising Money Via Text

Building affinity with supporters is always important but especially if your organization wants to do it via text message.

During a session titled “Can You Really Raise Money Through Text Messages?” (#18NTCtextmethemoney) at NTEN’s annual Nonprofit Technology Conference held this spring in New Orleans, charities that have dipped their toe into the text messaging pool offered their insights.

Among the panelists were Luz Hernandez, online campaign manager for Food & Water Watch; Ellen Pascale, manager, mobile marketing, at Humane Society of the United States, and Meredith Begin, mobile strategist at Upland Mobile Messaging, formerly Mobile Commons.

To build supporter engagement and cultivation by text, Hernandez stressed that most messages sent be signed by the same person and be consistent and align with the organization’s other channels. And for crying out loud, text like a human and not like a bot. Respond promptly to replies, ideally within 24 hours.

Text messaging is just like any channel in that segmentation and testing are vital. For instance, send sustainers fewer messages generally and especially avoid sending them one-time asks. Be sure to remove people who don’t accept MMS (Multimedia Messaging Service) when sending photos or GIFs. And, if your organization uses peer-to-peer texting, lists can overlap.

    Among other tips the panelists offered when it comes to text messaging with supporters were to:

  • Include a donate link in the initial text
  • Create trackable links
  • Use source codes
  • Keep broadcast texts to one text message
  • Always introduce your organization
  • Make websites and all web forms mobile friendly