March 22, 2001 | Read Time: 2 minutes
By NICOLE WALLACE
The consolidation of companies that specialize in helping charities use the Internet is continuing. In recent months, a number of online-giving companies have gone out of business — most notably Charitableway — and several giving portals, including CharityCounts and Givenation.com, have been sold to other companies. Now, CharitEx, a New York company that provides online cash-management services to charities, has announced that it intends to buy eContributor.com, a Washington online-giving company, in a combined cash and stock deal.
The acquisition is scheduled to be completed next month. The combined company will be based in New York, with regional offices in Washington and Philadelphia, and have 40 employees. Trey Richardson, chief executive officer of eContributor, will be in charge of the company’s Washington-area operations and its services for advocacy and political organizations.
CharitEx was founded in April 2000 by Peter Martino, former president of XRT, a company that provides cash-management software systems to corporations.
Mr. Martino uses the example of annual pledges paid in monthly installments to illustrate the service that his company provides. Using a traditional paper processing system, donors would receive an invoice each month, which they then would have to mail back to the charity with a check or their credit-card information — resulting in at least 24 pieces of mail changing hands over the course of a year. The CharitEx system allows a charity to set up an automatic debit system using a donor’s credit card or checking account.
By combining the information about such pledges and other payments coming in, says Mr. Martino, the system allows charities to accurately forecast their cash flow, and use that information to make decisions about short-term investments or even to borrow money against future streams of income.
Three days after announcing its planned acquisition of eContributor, CharitEx said it had formed an alliance with Public Financial Management, a company that provides asset-management services to state and local governments. CharitEx says that the partnership will allow its client organizations to make the most of their cash flow by taking advantage of short-term investments offered by Public Financial Management.
