The Future of Nonprofit CRM Use
I love finance. I love corporate finances, in particular. And something interesting happened in the last few weeks. Blackbaud, the Charleston South Carolina-based technology and CRM firm, announced its financial results for the full year-end 2021. While most of the release isn’t pertinent to most reading this, if you’re a follower of nonprofit issues and challenges, there was one financial figure we should pay attention to.
In the report, the Blackbaud CEO announced the 2020 data breach is estimated to cost the company $25-$35 million in legal fees and settlements in 2022. Moreover, these costs are after the company exceeds its insurance limits sometime during the first quarter of 2022. While I’m no expert, I’ve never seen a CEO or CFO overestimate the amount of liability that comes from a class-action lawsuit. Uniformly, they always want to paint a “rosier picture” than one might think. The breach has caused a dramatic downturn in the stock of Blackbaud, which is down about 30% since just the end of the third quarter, September 2021.
Why is this important? I have written and spoken about the breach in the past. It’s my belief that more and more nonprofits are going to pull away from Blackbaud and find other alternatives for their databases. I have several clients who have had members of the compliance office and/or legal counsel just order them to find solutions, regardless of the cost of converting to a new system. Also, at a certain point, the insurance money/coverage is going to run out. All of this does not bode well for Blackbaud.
In addition, there have been many new startup companies introducing CRM‘s or database tracking systems for donors, some very inexpensive. And then there’s the elephant in the room: SalesForce.
In the end, I still believe Blackbaud is going to run into enormous financial trouble. The liability involved with the breach is still unknown. State Attorney Generals have been preoccupied with Covid-related issues as well as social issues. But it only takes one or two states Attorney Generals, looking to make a name for themselves, to begin a process that could be the beginning of the end.
I know Raiser’s Edge. I know it quite well. I function in it incredibly effectively, both as my time as a practitioner and now as a consultant. I don’t want to have to learn other software if I don’t have to. But I think we’re all going to have to at some point.
