By Todd Cohen
Network for Good in Bethesda, Md., and Groundspring in San Francisco merged in December to create a nonprofit technology group that plans this summer to release a suite of online fundraising and communications tools for nonprofits.
The combined organization, to be known as Network for Good, also will customize for nonprofit use the web-based database that San Francisco-based salesforce.com already provides for more than 400 nonprofit clients, said Bill Strathmann, CEO of Network for Good.
Before they agreed to merge, he said, Network for Good and Groundspring each was working independently with salesforce.com to integrate their products with its database.
The merged Network for Good initially will have an annual budget of roughly $4 million, compared to $5 million combined for the two organizations, and expects by the end of 2006 to have reduced operating expenses by 15 percent to 20 percent, Strathmann said.
The combined staff total 24 people, four fewer than before the merger.
Joseph Mouzon, executive director and chief operating officer of Groundspring, will remain in San Francisco and serve as executive director of nonprofit services for Network for Good.
Network for Good also expects its earned income will cover 90 percent to 100 percent of its budget by the end of 2008, up from 50 percent in 2005, he said.
“This is going to be a faster path to financial sustainability and, ultimately, self-sufficiency, and at the same time increase our ability to help nonprofits,” he said.
Founded in 2001 by AOL, Cisco Systems and Yahoo!, Network for Good at networkforgood.org lets individuals make online donations to more than 1 million nonprofits and, through its DonateNow feature, lets nonprofits receive donations on their own websites.
Overall, it has delivered more than $86 million in donations to more than 20,000 nonprofits.
Groundspring, founded in 1999 by the Tides Foundation, serves more than 2,000 nonprofits and has helped raise more than $18 million through its own DonateNow service.
In 2005 alone, the two groups processed $42 million, including more than $32 million processed by Network for Good, with more than $17 million for disaster relief.
In 2006, the combined Network for Good expects to process more than $20 million, Strathmann said.
While Network for Good serves more customers, he said, it has offered more limited features for online giving than has Groundspring.
Nonprofits can customize the Groundspring online-giving tool but not the Network for Good tool, for example, to match the look and feel of their own websites, or to seek donations at specific dollar levels, he said.
And unlike Network for Good, Groundspring offers an EmailNow tool that nonprofits can integrate with the DonateNow feature to send mass email messages linked to the online-giving tool.
In addition to campaign appeals, the email tool can be used for advocacy and information.
Not part of the merger is another Groundspring product known as ebase, a desktop database for nonprofits to manage donor data.
Available at ebase.org, the product will be provided by a new nonprofit based in Helena, Mont.
Network for Good will continue to offer training services that Groundspring provided on the effective use of the internet for fundraising and communication.
The new suite of tools also will include an online-donation feature Network for Good acquired in 2004 from DirectHelp in Norwalk, Conn., including a “wish list” that lets nonprofits post their specific needs on their websites.
Network for Good has charged its nonprofit clients a transaction fee equal to 3 percent of donations, while Groundspring has charged a 3 percent transaction fee plus monthly subscription fees ranging from $15 to $25, and DirectHelp charged a monthly fee of $50.
Strathmann said a fee structure for the new suite of tools had not been set but would range from one-tenth to one-third the cost nonprofits would pay commercial providers for similar tools.
While Network for Good and Groundspring serve more than 6,500 nonprofits with their online fundraising tools, he said, the target market for the new suite of tools will be the nearly 1 million small and mid-sized nonprofits in the U.S.