Association Management Companies Are Your Nonprofit's Path To Success
By DON KNOX
Another AMC owner pressed me to write about the latest association-management software, or AMS, merger: the three-way combination of YourMembership, Abila and Aptify, announced earlier this month.
What does this exotic triple merger mean for key users of this software — AMC owners and staff?
Better yet, what does it mean for our clients?
• Will they get better software, higher prices — or both (or neither)?
• Will their preferred software platform stagnate while another property in the portfolio gets needed cash and top-notch developer talent?
• Worst, will our clients be pressed into a forced transition to one of the other platforms? (It happened only five years ago when YourMembership.com acquired Affiniscape’s code and promptly abandoned it.)
No, no, that won’t happen. YourMembership’s JP Guilbault seemed to insist as much in announcing the merger’s result: the new private-equity funded company Community Brands. The “community” in this case is all the associations and governments for whom we toil. The “brands” are the three — soon to be more — platforms occupying this AMS cruise ship.
Oh yes: More AMS platforms will board the U.S.S. Community Brands soon. That’s for a good reason, as good as any other.
Everyone likes money, and most of us could use more of it, which brings to mind the scene in the movie “The Wedding Singer” where Adam Sandler stalks a banker, Kevin Nealon, for a job. Asked his qualifications, Sandler replies, “No, sir, I have no experience but I’m a big fan of money. I like it, I use it, I have a little. I keep it in a jar on top of my refrigerator. I’d like to put more in that jar. That’s where you come in.”
Community Brands is built to put more money into the refrigerator jar of its principal backer, New York-based Insight Venture Partners. Insight is new to owning YourMembership (a nearby fund, Riverside Co., sold YM to Insight only in February). But Insight is not new to owning brands, or batches of brands.
Insight has invested in more than 250 brands, according to its website. Some brands are obscure, but others are quite familiar to AMC owners: Authorize.net, cvent and HootSuite among them.
Some Insight brands themselves own lots of brands. Ministry Brands, an Insight-financed vehicle that proclaims itself “a family of Christian software companies,” possesses 25 software platforms with names like EasyTithe, FaithHighway and HaloPays.
There’s gold in all those brands and, last August, the Wall Street Journal reported, “Ministry Brands LLC, a private equity-backed software provider for faith-based organizations, has retained Bank of America Corp. to explore a sale of the company and expects to garner $1.5 billion or more in the event of a deal.” The news ended up drawing Insight as a backer in Ministry for an “undisclosed amount.” In the process, one of two previous funds exited Ministry but the other kept some of its money in.
Insight has now doubled down on its software-aggregation strategy, investing in YM in February and now Abila and Aptify. But those companies don’t fit Ministry’s mold — thus, we’ll create a new mold: Community.
Insight telegraphed its intentions the day it announced Community Brands. It says it wants to bulk up to compete with publicly traded Charleston, South Carolina-based Blackbaud Inc., or so screamed the headline in YM’s hometown newspaper, the Tampa Bay Business Journal. Guilbault “wants to change the landscape of technology currently serving nonprofits and associations,” the paper said, referencing the mighty Blackbaud in the same paragraph.
My guess is it doesn’t want to compete with Blackbaud so much as be compared to it. Blackbaud, which has four times the sales of the three Community Brands companies (and doesn’t do AMS but is a rock star at nonprofit fundraising software), sports a stock-market valuation of $3.6 billion. A similar valuation makes Community Brands nearly a $1 billion company, and it’s only a few weeks old. That’s a lot of bling on a baby.
This financial sleight of hand may line certain tech investors’ pockets in the short run, but the jury’s out on the question whether the three AMS software providers, now under combined management, will produce better products for their subscribers in the long run.
AMC owners, are you happy now with YourMembership, Abila and Aptify?
If you’re still happy in a year or two, we’ll have our answer. And the money won’t matter.
The author publishes AMC Advantage and is managing director of Civica Associations Conferences and Exhibitions, an AMC in Denver.