Jan 18, 2012

Talkin' Blackbaud Blues

I’ve been following the online discourse (e.g. NTEN-DISCUSS, Information Systems Forum, Progressive Exchange and Nonprofit SalesForce) around Blackbaud’s announced acquisition of Convio.

As some express optimism and positive spin about that merger, I feel the need to speak up on behalf of the organizations and activists we serve. Please pardon me if I sound a tad strident, these thoughts have been years in the making.

Aspiration exists to help nonprofits gain access to the software tools they need to meet the mission and magnify their positive impact. We are passionate about free and open solutions that give social justice organizations greater control of their long-term technology destiny. Anyone who follows nonprofit software understands how hard it is for 501c3’s to acquire and maintain affordable, friendly tools to manage fundraising and constituent relationships.

I’ve watched with concern as Blackbaud and Convio have assimilated competitors, including GetActive, eTapestry and the karmically-challenged Kintera. This latest development continues an unhealthy pattern of market consolidation.

Blackbaud makes tens of millions of dollars in annual profits by charging nonprofits usurious rates for mission-critical software.

Their sales tactics and licensing terms are among the most aggressive and ruthless I have seen, even in my hardest-core Silicon Valley days.

And their executives receive multi-million-dollar cash and equity compensation packages.

I understand the counter-argument is that their tools help raise funds and manage information to achieve impact, and those tools are indeed powerful. Not to mention “free-market” capitalism is good for yadda yadda yadda.

But I don’t buy any of that as a legitimate rationalization for greed.

For-profits should not thrive at the expense of nonprofits. People should not get rich selling products and services to charities, nor by selling the vehicles that deliver the same. Some might argue such business success manifests an American Dream, but from where we stand it is closer to a nonprofit nightmare. And one that is not done unfolding before our eyes.

Blackbaud’s profits and executive compensation represent donated and granted monies not put toward nonprofit mission and positive social change.

A talking point in the analyst call for the Convio acquisition focused on how soon Blackbaud would be a $500M company.

Is that what we want our nonprofit software vendors focused on? And are they going to achieve that goal by providing more affordable tools in a less competitive market? I think not.

Loss of consumer choice is never a good thing. Loss of consumer choice that favors Blackbaud truly scares me. We don’t need any more monopolies.

Here’s to diversity, freedom and choice in nonprofit software markets.

Here’s to affordable, open, integratable tools that empower orgs, users, and movements, not that enrich vendors, executives and investors.

Let us not resign ourselves to anything less.

"This event and these people give a hope that good things can happen."

Participant, Dev Summit
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