By Todd Cohen
As New Yorkers sifted through the wreckage and confusion wrought by the Sept. 11 attacks, officials at MFY Legal Services six blocks from the World Trade Center were without their Internet connection but at least knew their donor data was secure.
The nonprofit, like a growing number of legal-services groups, had turned to technology to communicate with constituents and raise money – and had opted to manage its donor relations through Indianapolis-based eTapestry, a Web-based service that houses subscribers’ data and relationship-building tools.
“It made all the difference,” says Bobbie Kraus, director of development for MFY Legal Services. In the month after Sept. 11 that MFY Legal Services was cut off from the Internet, Kraus had access to the group’s donor data from her home computer in uptown Manhattan.
MFY is one of roughly 750 legal-services programs that are members of the National Legal Aid & Defender Association, which recently signed a deal with eTapestry that offers discounts to its members.
“Our member programs are becoming more savvy about raising funds,” says Jane Ribadeneyra, the association’s director of member services. “This gives them an easy way of both tracking their donors and being able to take donations online.”
And because the system is Web-based, she says, up-front costs are limited, and data and donor-relationship tools are secure.
Formed three years ago by a former Blackbaud executive and three partners he had worked with at a predecessor donor-software company, eTapestry has emerged as a big player in the increasingly competitive online philanthropy industry.
With 2,000 customers and a steady stream of new services, eTapestry aims to be a kind of Web-based “Swiss Army Knife” for nonprofits.
“For anybody working at a nonprofit, if there is anything they need to make their job easier as far as administrative tools, within reason, we plan to make that part of eTapestry, either developing it internally or working with partners,” says Jay Love, the firm’s CEO and president.
Building on its core donor-relationship-management product, eTapestry also offers online services ranging from pledging and prospect research to managing volunteers.
And new products are in the works for grantseeking and grants-management, data-management for client-services and more extensive contact-management and relationship-management.
Love and three partners launched eTapestry in September 1999 after having worked together at Indianapolis-based Master Software.
Formed in 1982, Master Software marketed donor software known as Fund-Master.
The firm five years later became a division of Boston-based Epsilon Data Management, which New York-based American Express acquired in 1991 and sold in 1997 to Blackbaud in Charleston, S.C.
Love, who worked at Blackbaud for eight months as vice president for sales before teaming up with his three former co-workers, won’t disclose financial data for the privately-held firm, but says it raised $7 million in an initial round of financing and has not needed additional investment.
“We were generating revenue the first month of our incorporation and have regularly increased that,” he says. “We add three to five new customers every single business day.”
He estimates the customer base for eTapestry, which employs 46 people, exceeds the combined clientele of all other firms that offer donor-record-keeping products that are Web-based – and known as “application service providers,” or ASPs.
National nonprofits with chapters or affiliates throughout the U.S. and abroad represent 5 percent of the firm’s customers, nonprofits with $1 million or more in annual revenue represent 40 percent and nonprofits with less than $1 million in revenue represent 55 percent.
That small-nonprofit market, Love says, offers huge potential, both because it represents an estimated 94 percent of the 920,000 U.S. public charities listed on the GuideStar database at guidestar.org — and because smaller nonprofits, even if they use donor databases, typically cannot afford or simply do not use software to manage relationships with donors or communicate with them.
“That was the missing link for many of these nonprofits,” Love says. “They’re not realizing that relationship-management is just as important as static record-keeping.”
eTapestry’s core product is designed to help nonprofits manage relations with donors. That includes generating outgoing email and U.S. mail, recording and processing gifts and pledges and transferring financial reports to the nonprofit’s accounting system.
The most popular add-on module to that core product is eCommerce, used by a third of the firm’s customers. The product integrates a customer’s Web site with eTapestry’s Web-based donor-relationship product to handle online donations and event registrations.
Other modules help customers import names to their donor-relationship system; provide planned-giving calculators offered by PG Calc in Cambridge Mass., and Crescendo Interactive in Camarillo, Calif.; offer online prospect-research tools provided by Target America in Fairfax, Va., and WealthEngine.com in Bethesda, Md.
eTapestry is about to launch tools to help nonprofits search for grants and manage the grantseeking process, as well as a tool to manage client-services data.
“We want to be your window to the world on doing anything a nonprofit office would need to do,” Love says.
The monthly charge for the core product, which customers get for free is they have fewer than 500 donor records, is $30 a month for 500 to 1,000 records, $99 a month for 1,000 to 5,000 records and another $50 a month for every additional 10,000 records. Training costs range from $100 and up.
Each module costs 10 percent of the base service, or $10 a month, whichever is greater.
Depending on which modules they lease, Love says, small nonprofits pay from nothing to $200 a month, mid-sized nonprofits pay from $30 a month to $500 a month and national groups with more than five chapters or affiliates pay from $200 a month to $5,000 a month.