By Todd Cohen
Jay Love, who has headed two nonprofit software companies that became industry leaders before being sold to industry giant Blackbaud, is starting a new company that aims to compete with Blackbaud for small and mid-sized nonprofits.
The new company, Bloomerang, is developing software designed to help nonprofits reach, retain and manage their relationships with donors.
Love, who in August joined Avectra as senior vice president, is partnering with the McLean, Va.-based software company on his new venture, which will be based in Indianapolis.
He will continue to lead the nonprofit practice for Avectra, which provides constituent relationship management software for membership-based associations and nonprofits.
Avectra will focus on larger nonprofits while acting as the marketing partner and global reseller of Bloomerang, which will target smaller nonprofits, or those with annual revenue of up to $3 million, and share leads with Avectra for mid-sized nonprofits, or those with annual revenue from $3 million to $10 million.
Love estimates that market represents 95 percent of registered nonprofits in the U.S.
He says he had secured private investment of roughly $2 million for Bloomerang and plans with his investors to own and operate the company for the long-term.
Rob Signorelli, who was chief architect at eTapestry, a company that Love started in 1999 and that was sold to Blackbaud in 2008 for $25 million, will serve as chief technology officer for Bloomerang.
Adrian Sargeant, a fundraising consultant and visiting professor at Indiana University, is advising Bloomerang and has licensed his research and theories on donor retention and loyalty to the company, Love says.
Many nonprofits lose 40 percent of their donors every year, he says.
The new software, which is being tested in November and December and launched in January, will include a dashboard and will generate reports that feature a rating scale that indicates the “level of engagement” for every name in the client’s database, segments those donors, and suggests actions to increase the retention of donors in each segment.
For a fundraising appeal a Bloomerang client is planning, for example, the software will recommend the nonprofit send a different letter to a long-time donor than the one it sends to a prospective donor.
Sargeant estimates that increasing the retention rate of donors by five percentage points can double the lifetime value of donors in a nonprofit’s database, Love says.
Love’s first nonprofit software company was Master Software, which he served as CEO from 1984 until it was sold to Blackbaud in 1997 for about $11.5 million.
He then served as vice president of sales for Target Software, which with its sister company Target Analysis Group was sold to Blackbaud in 2005 for $60 million.
He next started eTapestry, and most recently served as CEO of Social Solutions, which provides case management software for nonprofits.
Love says Master Software was sold in 1987 to Epsilon Data Management, which without his knowledge sold the company to Blackbaud in 1997.
And he sold eTapestry because his institutional investors wanted a return on their investment, he says.
He and other investors in Bloomerang, he says, are “investing in this for the long term.”