CXO

How Virtuous Software built the Salesforce for nonprofits

Nonprofits are a fairly underserved market in tech. Startup Virtuous Software wants to provide powerful tools for nonprofit needs.

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One of the Virtuous Software dashboards.
Image: Virtuous Software

Take a minute and think about the deluge of enterprise software companies providing tools such as enterprise resource planning (ERP) and customer relationship management (CRM). Traditional businesses have nearly unlimited options when it comes to choosing the right solution.

For nonprofits, it's a different story. Lack of resources and few options means that most organizations are relying on old, outdated software or using services that don't necessarily line up with their initiatives.

For example, tools like Salesforce are great for sales teams, but the fundraising process for nonprofits is different than closing a sale. Virtuous Software has built a nonprofit CRM to provide the relational intelligence needed to build relationships with donors and raise money for your organization.

Virtuous Software founder and CEO Gabe Cooper started a software consultancy 10 years ago with some friends and half of their customers were nonprofits. Later in the life of the consultancy, they began working with even more nonprofits and the impetus of Virtuous Software was seeing those nonprofits struggle with tools that weren't optimized for what they were trying to do.

Giving is fundamentally a relational and emotional experience, Cooper said. There's no real set amount for giving, so donors can set the cost based on how moved they are by the cause. And, while fundraising is different than sales or marketing, there are some ways to track why people give.

"Think about the last five places where you gave money," Cooper said. "If you think about those last five places, I can guarantee you that in all five cases it's because you knew somebody at that charity, either that worked there or volunteered there, or that it was a charity that's in your local community, or that it's a cause that affects your family or friends directly."

The product is a web-based platform that displays relevant information for fundraising goals and individual givers.

Users view separate dashboards for giver management, gift management, and notifications, among others. The tools collects and analyzes data to help them manage relationships with givers throughout the process.

"Their relational tools allow you to understand your donors and where you have common interests, based on publicly available information as well as the information gathered over the relationship as it's been built," said Tj Abood of Access Ventures, and investor in Virtuous Software.

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Virtuous Software founder Gabe Cooper with investors from Access Ventures.
Image: Access Ventures

Users can see how they're connected to givers geographically or by social network. Using this data, the dashboard will suggest next steps with each giver based on financial data and relational data. So, Virtuous Software will suggest when to ask for a gift, and what amount, but it could also suggest you invite someone to a fundraiser or informational meeting.

Mike Slominski, a managing partner at Apex IT Consulting and a beta customer, said that Virtuous Software offers a much more robust solution that what his company was using previously, as it provides more ways to measure engagement and a better user interface.

"We're going to have our board members use the tool to help manage their assigned constituents, so a simple UI was must," Slominski said. "Virtuous nailed it!"

For the backend, the team went with .NET to help with scalability, Cooper said. Most of it is proprietary, but they rely on other products like Chargify to handle billing, and Constant Contact or MailChimp for email.

"We're not ashamed to lean on the 'best of the best' in the marketplace," Cooper said.

Virtuous Software is on the Azure platform. It also integrates with Quickbooks and has iDonate as a strategic channel partner. They have an Android app designed for executive directors and major donors, Cooper said, and they are currently working on an iOS app.

The company is targeting nonprofits between with $500,000 to $1 million in revenue or, what Cooper calls the "SMB" of nonprofits. He predicts most organizations will have three to four users and pay an annual license fee. Average annual costs for that scenario is around $10,000 a year. That market covers about 160,000 organizations as potential customers, but Cooper said they'll scale up to work with bigger organizations in the future.

As they seek new customers, Abood said, it's important that they are able to provide a smooth move to the platform.

"The biggest challenge that they have is creating a seamless transition from the existing CRM tool — migrating data, building out the platform — so that it doesn't create a burden on the nonprofit," Abood said.

Early on, the founders spent about a year and roughly $400,000 of their own money building the platform. They recently raised a small seed round of $700,000, led by Access Ventures, to cover marketing and sales. Cooper said they will be adding another team member and spending the rest of the money on customer acquisition.

Virtuous Software launched with a capped beta but, as of now, the company is publicly launched.

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About Conner Forrest

Conner Forrest is a Senior Editor for TechRepublic. He covers enterprise technology and is interested in the convergence of tech and culture.

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