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By Todd Cohen Seeking Big Donors The dominant software-maker for foundations is consolidating its products and expanding them to help financial institutions work with foundations. The goal is to develop products that work seamlessly together and help foundations, charities, donors, advisers and financial institutions work with one another in raising, investing, managing and giving away charitable dollars. "We're focusing on helping our customers grow by allowing them to have strategic synergies and leverage other technology and organizations to help them grow," said Dave Dietrich, vice president of strategy and product development for MicroEdge/NPO. A key strategy is to team up with organizations whose products, marketing or alliances can broaden the charitable reach and services of their customers. Current projects include:
MicroEdge/NPO also hopes over the long-term to integrate its systems
with solutions for financial advisers and investment professionals produced
by its parent, San Francisco-based Advent Software. Advent serves more than 60,000 financial advisers and investment professionals at 6,500 financial institutions with products that handle portfolio accounting and the flow of data between portfolio managers and custodial record-keepers. In the wake of that merger, Blackbaud sold its grants-management division to MicroEdge, a combination that doubled the firm's customer base to 800 grantmaking-foundation clients. While the merger spurred additional growth, said Ephy Torenberg, MicroEdge's CEO and president, the company was looking for new ways to meet growing demand for software to serve charities that increasingly were both raising money and giving it away. In the mid-1990s, he said, new donors who wanted to be more involved in philanthropy helped fuel demand for greater accountability and discipline both in grantmaking and fundraising. "Today, more and more organizations are doing both in a more professional way," he said. To tap the growing market the new generation of wealth was creating, he said, MicroEdge decided in 2001 to merge with NPO Solutions, a firm in Concord, N.H., that makes back-office software for community foundations. "We were looking for opportunities to service more clients from
the philanthropic world," he said. MicroEdge, which employs 80 people in New York City, reported its 1,700 clients account for 60 percent of private foundations with assets more than $100 million, 40 percent of those with assets more than $50 million, 20 percent of those with assets under $50 million, and 20 percent to 25 percent of corporate foundations. MicroEdge/NPO Solutions now is working to integrate its various products so all its customers can use them. One strategy, for example, is to develop software that lets financial-services firms like Merrill Lynch "deputize" their professional advisers to help community foundations raise money by connecting them with the advisers' wealthy clients. To help do that, MicroEdge/NPO has teamed up with Atlanta-based Magner.Network, which provides financial advisers with "front-end" tools such as Web sites that help them learn about and sell complex products such as donor-advised funds, said Torenberg. The goal is to ensure that community foundations benefit from strategic relationships with financial-services firms and a flow of data to serve the foundations' stewardship role in serving donors, said Dietrich. MicroEdge/NPO also has reached a tentative agreement with the Technology Steering Committee, a syndicate that has raised $4 million to improve its back-office technology for community foundations. While details still are being worked out, the project will include developing an "open interface" and "common platform" that will allow Web-based improvements to be made to existing accounting systems at community foundations without changing the systems themselves, moving data between those systems and financial institutions, and developing systems to help community foundations manage relationships with their customers. Network For Good Philanthropy Web portal Network for Good generated more than $32 million in online giving during the two years since it launched, its president said. After handling $2.1 million from its launch in mid-November 2001 through December of that year, the portal raised $16.9 million in 2002 and expected to raise $17 million in 2003, said President Ken Weber. Through Oct. 1, 2003, he said, the portal handled 67,000 gifts from 56,000 unique donors making donations to more than 11,000 nonprofits, with the average gift totaling $150. Those totals reflect "significant growth" among smaller donors, Weber said. That growth is particularly important, he said, because the portal is less focused on larger donors who tend to make their gifts more efficiently through traditional means such as check-writing. To help cover processing costs, Network for Good on Aug. 1 instituted a 3 percent fee that generated $56,349 through October. Much of the growth in the use of the site has been driven by nonprofits that add a Network for Good "Donate Now" button on their own sites, Weber said. In the first nine months of 2003, he said, Network for Good also matched 49,000 volunteers with specific volunteer opportunities through its own site and another it created and maintains for the USA FreedomCorps Volunteer Network. Network for Good also opted in August to pay $2.9 million owed to its donors by San Francisco-based PipeVine, a bankrupt nonprofit. PipeVine was created by United Way of the Bay Area, that processed donations for it and for Network for Good, United Way of King County and more than a dozen corporations, mainly in the Bay Area. "We decided to pay that money out ahead of recovering any of it," Weber said. The California attorney general and a receiver he appointed are investigating the demise of PipeVine. Todd Cohen is editor and publisher of Philanthropy Journal, an online newspaper at www.philanthropyjournal.org.
He can be reached at tcohen@ajf.org |
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