JustSelling – the Blackbaud/JustGiving merger

On Monday I suspect a lot of fundraisers were, like me, checking that it wasn’t April 1 as the headline ‘Blackbaud to acquire JustGiving’ flashed across their news feed. Why did this happen? And should we have been so surprised after all? I suspect not. First off, a quick recap on the parties concerned: JustGiving – founded in 2001 by Anne-Marie Huby and Zarine Kharas, who have remained in charge ever since, JustGiving has arguably become the way most British people are most likely to engage with fundraising online. More than £3Bn has now been raised through the site, accelerating dramatically over the past 5 years (the £1Bn milestone was only reached in March 2012). Blackbaud was founded in New York in 1981 by Anthony Bakker, to deliver a student billing solution for private schools in the new age of the microcomputer. This solution developed into The Raiser’s Edge, and now Blackbaud is one of the largest suppliers of fundraising database software, with a particular stronghold in the higher education market, and a complex portfolio of overlapping products. They now describe themselves as ‘the world’s leading cloud software company powering social good’. And I believe that right there, and in the history of Blackbaud in particular, lie the roots of this acquisition. Past acquisitions Blackbaud has a history of making significant acquisitions in the online fundraising market. We just haven’t seen much of it in the UK because non US clients only account for a small proportion of Blackbaud’s business.  Their first major acquisition was eTapestry, an online fundraising database known for its ease of use for small charities, in 2006. This was followed in 2008 by Kintera – a supplier of a more powerful cloud-based CRM and online giving solution. Most recently in 2012 they acquired Convio, who were then their main competitor for online fundraising tools in the US. So US fundraisers in particular have grown familiar with the experience of software solutions they use becoming part of the Blackbaud suite of products. But arguably, despite these significant acquisitions, Blackbaud’s biggest success to date in the online fundraising space has been in thought leadership. Thanks to the evangelism of key figures like Steve McLaughlin and Chuck Longfield, the company has provided a steady stream of data driven insight around charitable giving, and online giving in particular, to the nonprofit sector. But the products have often failed to offer reliable and easy functionality for Blackbaud’s customers to capitalise on this insight. Blackbaud NetCommunity is a case in point. Envisaged as a one stop shop online community management, CMS and email marketing system, it fell into the trap delivering all three adequately, rather than one exceptionally well. It is mainly used by higher education customers, who value its seamless integration with The Raiser’s Edge, but struggle to build best-in-class online giving environments using it. In fairness to Blackbaud, they have made significant improvements to NetCommunity in recent years, and with their acquisition of Australian peer to peer giving site Everyday Hero in 2011 to compete with JustGiving, Blackbaud finally started to deliver online giving functionality to charities that was universally well received. Data, income and thought leadership So, Blackbaud’s acquisition of JustGiving makes perfect sense in the light of their history. JustGiving has also been famed, not just for the sheer amounts raised via the platform, but for its leverage of the vast quantities of data flowing through the site to deliver actionable insight for fundraisers. Jonathan Waddingham has been their version of McLaughlin and Longfield put together. JustGiving were one of the first to spot the dramatic swing away from desktop to mobile, and were vocal evangelists for the development of responsive design for online giving. They have a large team of data analysts who have not only spotted the trends but worked within the company to deliver user interface enhancements that capitalise upon them. Just the kind of people Blackbaud wants. Because, as various commentators have pointed out, Facebook is coming to town. Facebook has been JustGiving’s primary source of referrals for some time. Its new Facebook Donate suite of tools essentially replicates JustGiving’s peer to peer based model, within Facebook. And if JustGiving has a large team of behavioural psychology savvy analysts, Facebook is essentially one giant behavioural psychology experiment. They are capable of innovating and iterating in the online giving space in a way that has not yet been seen. To survive this onslaught, Blackbaud needs to cannon up. Criticism of success And what of Anne-Marie Huby and Zarine Kharas? Why would they sell JustGiving now? Well, evidently the company is at the height of its success. And being part of the Blackbaud product family gives JustGiving access to far more development capital and resources, and a much wider global reach, than they do currently. But if I were them, I’d probably have another reason too. It must be galling and wearing to have founded a site that has delivered so much, to so many charities, and yet receive so little thanks and so much opprobrium. Every time the JustGiving site works precisely the way it has been designed and resourced to, and delivers a staggering fundraising response in a short space of time, there is a corresponding call for JustGiving to waive their fees. It is a classic illustration of the mixed up mindset about what is required to deliver effective fundraising, highlighted so well by Dan Pallotta in this ubiquitously referenced TED talk. Now the PR department in Charleston can deal with all that, and I’m sure Huby and Kharas will be very happy with that outcome.    Adrian Salmon is Vice President at Grenzebach Glier and Associates.  

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