September 16, 2004 | Read Time: 4 minutes
In the past 18 months, Kintera, a San Diego company that helps charities raise money online, has gone on a buying
binge — swallowing up more than a dozen other companies and organizations that offer technology services to nonprofit groups.
The acquisitions, which have helped Kintera inch closer to profitability on expected sales of $23-million to $27-million this year, represent part of the ambitious plans of the company’s founder, Harry E. Gruber, a medical doctor who started Kintera four years ago after helping to create five other companies.
Dr. Gruber’s aggressive moves in the nonprofit field — which he describes as the first wave of acquisitions he plans to make — have left some observers and at least one of his competitors wondering how he will integrate so many varying interests into his young company’s culture.
“I don’t believe you can integrate all the technologies and products and people that Harry is trying to put together,” says Gene Austin, president of Convio, an Austin, Tex., software company that helps charities use the Internet to improve their fund-raising efforts. “I’ve been in the technology business long enough to know that what he’s trying to do is a very tough thing.”
Buying Expertise
Dr. Gruber, however, thinks his approach is the right one. He says he is not just acquiring companies and their clients — but adding employees who, in some cases, have far more experience in the nonprofit industry than he or some of the employees who helped found Kintera. And rather than dissolving the companies he acquires, he says, he allows many of them to continue offering their services to the nonprofit field.
But every acquisition is different, he says. Kintera drops the names of some businesses it acquires, absorbing the products and services they offered — but in many cases, keeping the employees from the previous companies. The table below shows the acquisitions Kintera has announced in the past two years.
The companies that Kintera has acquired have provided a range of online, consulting, and other services to hundreds of nonprofit organizations, including arts and cultural institutions, colleges and universities, environmental organizations, foundations, and local United Ways.
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Company
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Date purchased
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Amount paid
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2003 revenue
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What company does
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Sampling of current and former clients
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Kamtech Information Systems
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August 2004
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$310,000 and 102,619 shares of restricted common stock
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Approximately $1.8-million
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Produces a computer tool to help nonprofit groups identify prospective wealthy donors and still operates under its own name
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Museum of Contemporary Art, in Los Angeles; Nature Conservancy; Purdue University
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KindMark
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August 2004
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$139,000 and 57,691 shares of restricted common stock
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$500,000
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Develops technology products to help nonprofit groups and corporations run on-the-job campaigns and will change its name to Kintera Directed Giving
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Charles Schwab Corporation Foundation, Electronic Data Systems
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BNW Software
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August 2004
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$281,000 and 22,000 shares of restricted common stock
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Approximately $500,000
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Develops facility-management software for colleges, universities, and community centers and still operates under its own name
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University of California at Los Angeles, Johns Hopkins University
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Carol/Trevelyan Strategy Group
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March 2004
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About $5-million in restricted Kintera stock and $250,000 cash
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Approximately $5.2-million
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Provides online advocacy consulting and other services for more than 200 clients and still operates under its own name
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Amnesty International USA, Natural Resources Defense Council, Rock the Vote
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|
Prospect Information Network
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March 2004
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$3.4-million in restricted stock, and assumed approximately $230,000 in lender debt
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Approximately $4.5-million
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Produces a computer tool designed to help charities identify wealthy donors and still operates under its own name
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American Red Cross, Proctor Academy
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Virtual Sprockets
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October 2003
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Not disclosed
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Not disclosed
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Helps organizations use their Web sites to communicate with donors; no longer operates under its own name
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American Civil Liberties Union, America’s Second Harvest
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Little Tornadoes
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October 2003
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Not disclosed
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Not disclosed
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Develops Web sites and provides consulting services to nonprofit organizations but no longer operates under its former name
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Carnegie Endowment for International Peace, March of Dimes
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Donation Depot
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May 2003
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Not disclosed
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Not disclosed
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Provides computer tools to help more than 100 customers raise money online but no longer operates under its former name
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Southeast Missouri State University, United Way of Santa Barbara County (Calif.)
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Involve Inc.
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February 2003
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Not disclosed
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Not disclosed
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Offers software services to help charities improve their marketing efforts and organizational efficiency but no longer operates under its former name
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International Fund for Animal Welfare, People For the American Way
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