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Estimated reading time: 2 minutes, 29 seconds

Blackbaud Readies Financial Analysis Tool

blackbaud_logoNonprofit vendor Blackbaud is testing an application that will be used to provide financial analysis for nonprofit organizations and give them the ability to compare their operations against those of their peers. The product is in the middle of an early adopter program and would likely be sold as an add on to the company's applications such as the Financial Edge.

While the financial analysis tool could appeal to users of any of Blackbaud's products, it would also appeal to "as an entrance to Blackbaud for those who don't use any of our products," says Jeffrey Sobers, product marketing manager for Blackbaud's financial solutions. He notes that during the early adopter program, the Charleston, S.C.-based company is developing its strategy and pricing.

The application would apply ratios to results and provide analysis. "Along with the ratios and the results, we will be providing text that provides some context and some graphics," says Andrew Payne, product line manager for the same set of applications. The primary use is for presenting analysis to a company's board of directors, and would also likely be used for donor and funder presentations.

Ratios used would include some unique to the nonprofit space such as program efficiency ratio, which is the percentage of program service expense compared to total expense. Organizations could break down and track expenses and analyze revenue, such as studying revenue mix year to year. The application would also analyze unrestricted contributions compared to unrestricted fundraising expenses, along with calculating gross program margin and operating margin.

Data for benchmarking comparisons with peers is being supplied through a third party and would not only enable organizations to compare themselves to companies that are usually considered peers, but to those who might not be as obviously similar. Payne noted a nonprofit may not behave the same way as peers within its sector and "may want to be compared against what the IRS might deem their peer group to be or they may want to be compare against what might appear to be an unrelated sector because the fundraising behavior."

While information would generally be available online, Sobers says there is also "quite a bit of utility" in being able to download reports in PDF format for board meetings.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
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