Leveling the playing field for the smaller players

For many non-profits and faith-based organizations, tech access and utilization is, well, often a matter of faith. But their ecosystem is ripe with opportunities for innovation and success.

By Steve Reardon, ASG

The non-profit and faith-based communities have often been dealt a difficult hand in the technology sector. With almost no SaaS programs tailored to the specific technological needs of these organizations, these communities are left to develop inefficient workarounds – bolting together multiple programs for day-to-day tasks such as fundraising, CRM management and accounting. However, the non-profit and faith-based technological ecosystem is ripe with opportunities for innovation and success. This opportunity for potential led to the founding of Aplos Software, which is now a portfolio company of Alpine Software Group (ASG), backed by Alpine Investors.

Steve Reardon, ASG

Aplos Software was founded in 2009 when founder Tim Goetz could not find a streamlined, affordable fund accounting software for his church. Goetz recognized the lack of specialized products in the space and saw the opportunity to create a complete offering of service solutions for a range of verticals, including churches, non-profits and K-12 organizations. With the use of an all-in-one platform, non-profit and faith-based communities can operate with an efficiency typically seen in for-profit businesses. With these tools, the organizations can consolidate their program use, engage with trends such as digital giving, and truly focus on the mission for their community and their constituents.

“When we looked at industries that were upended by covid and where our capital could make an impact, the non-profit space was one where we saw a huge opportunity,” said Alpine Investors vice president Patrick Eble. “We wanted to give this technology the kind of growth and resources to scale and in turn, support the customers of this technology doing great work.”

Aplos Software marks ASG’s first platform investment in non-profit CRM and fund management software – a goal-oriented partnership that both parties hope will lead to success and for non-profits and faith-based organizations.

Fixing inefficiencies

The playing field is historically uneven: programs and tools specifically tailored to the operating needs of these organizations are few and far between. In order to compensate, these companies may use several different programs to run their day-to-day operations­— tasks like Customer Relationship Management (CRM), fundraising, event coordination and accounting. These programs do not necessarily “talk” to each other and may not integrate well, which creates a bulky, cluttered digital environment that distracts from core tasks like fundraising.

In addition, non-profits and faith-based organizations require specialized solutions to fit their operational models. For example, several incumbent accounting programs do not support fund accounting, an accounting system used by non-profits to facilitate cash flow from designated donations, grants and endowments.

According to a study conducted by Yale Insights, only 11% of non-profits view their organizations’ technology use as highly effective. This lack of efficiency can bog down and distract from the mission or purpose at hand, preventing these organizations from focusing on their “why.”

Covid drives digitalization

The pandemic has accelerated digitalization and sent many organizations – both  for-profit and non-profit – into an increasingly virtual world. As for-profit businesses wondered how to keep their consumers active virtually, non-profit and faith-based organizations questioned how to continue to engage with their community and constituents.

In 2021, the rate of donations given to non-profits online was around 10% to 15%, a jump from less than 9% in 2019. Seventy-five percent of giving comes from individuals, and as millennials fully enter their income-generating years, they will soon replace baby boomers as a primary fundraising source. As this shift occurs, digital engagement will become more important than ever, and meeting consumers where they are at is critical.

The digitization trend has allowed organizations to survive and continue to serve their communities in the short term. However, the lack of access to management software designed for the non-profit sector remains an obstacle and pushes these organizations behind in comparison to for-profit businesses. However, given the right tools, these organizations are ripe with opportunities for innovation, investment and success.

Partnering for innovation

ASG’s mission is to buy and build market-leading vertical SaaS companies, as well as make long-term investments in people, companies and technology. Aplos’ shared vision of empowering the non-profit and faith-based industry provided the perfect opportunity for ASG to get involved in the space.

“In their pursuit of developing great technology for their customers, the team is relentless and passionate; and it is this commitment to innovation that inspired me to join,” said Anush Vinod, Aplos CEO and former member of the Alpine Investors CEO program.

Although non-profits have traditionally been dealt a difficult hand in terms of technology use, there is hope on the horizon for a more productive, efficient future.

Steve Reardon is the CEO of ASG – a software business that buys and builds vertical SaaS companies and is backed by Alpine Investors.