Stock Prices of Vendors to Charities Getting Battered
Yesterday I read an article in the Nonprofit Times about the stock prices of several public companies who work with nonprofits that are struggling. Ostensibly they are struggling because of the meltdown in the subprime mortgage market. Actually, except for the possible exception of Blackbaud, I think many of the companies listed might be struggling regardless of the present economic woes.
Blackbaud is another story. They clearly took a hit a month ago when Jefferies & Co. analyst Ross MacMillan speculated that because of the recession, nonprofits would be spending less and therefore Blackbaud would close less business, etc… “Given the outlook for more potential weakness in giving, we think non-profits are slowing the rate of spending on technology.”
Obviously, it’s a complicated issue. I’m not sure that our clients are seeing giving slow down that much. But assuming nonprofit giving does slow down, I agree that overall technology spending would decrease (especially spending on technology infrastructure) but I would hope that technology spending on fundraising and relationship building tools would not slow. After all, these are the tools that an organization needs most in a difficult economy.
Of course, this is just another reason why open source is such a beautiful model for nonprofits in any economy. Admittedly, open source software is not “free”. For instance, an enterprise class open source CRM like Orange Leap needs implementation services and ongoing support in order to get the greatest value from it. But, because an organization doesn’t have to write that big up front check for license fees, they can spend the money needed to implement software correctly and still save 40% to 60% over comparable closed and proprietary software.