Canadian software developers are doing well by helping others do good.
They're selling or licensing applications to charities, enabling them to manage their donor and volunteer databases, process their online transactions and create planned giving strategies.
Charities used to be laggards in high tech, generations behind in their computer hardware and dependent on volunteers to design their websites. Now, however, they've become niche markets for sophisticated software programs that improve their administrative efficiency and allow them to market their causes better.
"It's so nice to be a part of so many people doing so many good things," says Sharon Batsch, partner of the Edmonton-based software firm The Batsch Group. "Our role is to help them do the things they need to do quickly and efficiently so that they can continue to build their programs and offer their services."
Batsch first conceived of a database-management system for charities when she lived in Winnipeg in 1989 and worked for the Manitoba Lung Association.
When she moved back to her native Alberta, she rebuilt the software as a generic program called @EASE. Her firm now has seven employees, and she says revenue is growing by least 20 per cent annually.
Batsch's 100 clients are predominantly in Canada. They include Stollery Children's Hospital Foundation, Calgary Volunteer Centre, Fort Edmonton Park, the Edmonton Public Library and Parkinson's Society of Alberta.
"We're very well known in the West, and trying hard to move into Ontario," she says.
Batsch charges non-profits $8,995 to buy @EASE software, plus an annual support fee of $1,500. There is also a lease-to-own option at $330 per month.
"It's not the cheapest, but it's reasonable," says Batsch. "By bringing clients on to our software from other packages they were using over the last five years, we have indirectly contributed $150,000 back into the fund-development community through fees they didn't have to pay."
She emphasizes the speed and convenience of @EASE. "Our personal goal is to help our charities have high-quality management of information at the snap of a finger, giving them the ability to react on a timely basis. With other packages, you're so inundated with grunt work."
@EASE is a knowledge-based tool and doesn't process online donations. Some clients, however, accept donations through their website, and import them into @EASE.
Clients can save and retrieve donors' giving history, identify prospects for planned giving, track sponsors and participants for special events, and manage proposals for foundation grants.
The contact-management system covers members, volunteers and media - "everyone who's important to the charity."
Whereas Batsch specializes in software for data management, Vancouver-based GiftTool markets products for online transaction processing. The firm earns 70 per cent of its revenue from the charitable sector, but also serves small businesses and associations.
GiftTool was founded in 1999 by its president, Kjartan Mather, a software developer who was asked by a friend setting up a non-profit to critique the website.
Mather saw the possibilities for adapting e-commerce to the charity sector's needs, Now, GiftTool has "not quite" 1,000 clients, says CEO Sabina Jaenisch.
Clients include the Canadian Parks and Wilderness Society, the Heart and Stroke Foundation of B.C. & Yukon, the Ontario March of Dimes, the New Brunswick Public Libraries Foundation, Dr. Peter AIDS Foundation and Amazon Watch.
GiftTool provides hosted applications for membership management, online donations, event-participant registration and a pledge-a-thon tool for special events.
Clients pay a one-time setup fee of $150 per application, discounted when they subscribe to two or more at once. GiftTool also charges a monthly fee of $25 for online donations, plus a rate of 99 cents per transaction, which is discounted for larger volumes.
The pledge-a-thon module enables individuals or teams participating in a fundraising event to create and update their own websites, send e-mail appeals to friends and easily measure progress according to their fundraising goals.
When GiftTool goes head-to-head with U.S.-based software vendors, "there are some inherent advantages to being located in Canada, versus the U.S.," said Jaenisch.
Non-profits are more insulated from government snooping in Canada, where a court order is required to access donor data. If a charity lodges its donor data with a U.S. software supplier, the Patriot Act permits U.S. officials to access that data.
"That's not usually an important issue for most of our audience," says Jaenisch, "but for a Canadian organization doing political fundraising, it may not want to hold its data in the U.S."
PlanGiv, based in Kingston, Ont., offers a full range of gift-planning products and services to Canadian charities.
In 1996, PlanGiv Consulting Services and U.S. software developer PhilanthroTec developed Gift Planning Assistant (GPA), the first Canadian software program for the creation of planned gifts.
Planned gifts are essentially donations that involve estate planning, financial planning or asset-distribution strategies. "The future in fundraising is in major gift planning," said PlanGiv president Ian Fraser. "But if there are 80,000 charities in Canada, only the first 1,000 are likely prospects, because the other 79,000 are too small or rely on other fundraising methods."
PlanGiv has marketed GPA as an adjunct to its consulting services, licensing it to about 100 clients - mainly hospitals, universities and other large non-profits - for a fee of $995. Typically, a charity's planned-giving officer inputs data about the donor, the beneficiaries, the type of property and the giving technique into the program.
GPA then provides life expectancies, annuity rates, and combined federal/provincial tax rates, and it does calculations for the separate Quebec return.
The software then designs a five-page document complete with assumptions, gift diagram, financial and tax calculations, benefits to donor and charity.
Fraser said the software is not currently being marketed, pending the launch of a new version in early 2008.
Recent changes in federal legislation made the existing product's treatment of listed securities and gift annuities obsolete.
Toronto-based Income Manager provides an all-in-one integrated fundraising and data-management system for non-profits.
President Michael Baldwin had been a professional fundraiser for two decades when he wrote a software program in 1997 to give small and medium-size charities the same opportunity for computerization of their records that hospitals, universities and other large non-profit institutions were enjoying.
Income Manager has 600 clients. Located mostly in Canada, they include the Canadian Liver Foundation, Big Brothers Big Sisters of Canada, Boys and Girls Clubs of Canada, the Greek Community Centre of Toronto and the Dolphin Research Centre in Florida. Revenue is growing at 20 per cent annually, says Baldwin.
The company charges $1,395 for the complete software package to be installed on a client's local area network (LAN).
For the past two years, Income Manager has also offered an online hosted package for a fee of $75 per month.
While the product has been aimed at small and medium-sized non-profits, the firm is now developing a web-based product to market to larger institutions.
"We don't want to give up our bread and butter, but we do want to move into the higher-end sector," said Baldwin.
For charities with multi-branch networks throughout a province or across the country, he said, "it's important to be able to centralize their data in one database server, so that they can view the data holistically. There are all kinds of benefits to doing this, but then there's the challenge of security at the user level. The product we're developing will address that."
Toronto-based Cornerstone provides services to charities as well as enterprises. When the firm was founded in 1987 as a list brokerage, charities were among its first clients.
The firm quickly expanded into list management and list processing and eventually became what it says is Canada's largest prospecting and database-management resource.
Cornerstone set up a separate fundraising-services unit in 1995 to process donations, on and offline, and manage donor databases for non-profits. "We're an outsource services provider rather than a software provider," said Susan Oliver, vice-president of marketing.
The firm uses its own proprietary software, rather than selling or licensing it, to clients for transaction processing and database management.
Cornerstone's fundraising-services unit has 40 to 45 charities, including the Heart and Stroke Foundation of Ontario, Canadian Diabetes Association and Multiple Sclerosis Society of Canada.
The list-brokerage unit has 100 charities as customers. "Non-profits are a significant part of our client base," says Oliver, but she declined to reveal what proportion of the firm's revenues they generate.
Cornerstone also refuses to provide specific pricing details, saying the fees for its services vary according to each customer's needs and volumes.
"Non-profits are very sensitive to their donors and how their donations are being spent," says Oliver.
"They're under great scrutiny and they want to make sure they're getting the best price for the services they're buying."
(Sheldon Gordon can be reached at gordon@businessedge.ca)
