StarSoft Technologies, a three-person Spokane firm, has managed to grab a small niche within a niche segment of the great big software industry.
That segment is software applications that help churches and nonprofit groups manage donor lists, member enrollments and contribution histories, plus slice and dice the data for any kind of purpose.
Like every segment of the commercial software pie, this one is populated be a few giant companies and a few tiny competitors, like StarSoft.
“The big giant in this area is Blackbaud,” says StarSoft President Scotte Meredith. “We’re just a little blip on their screen,” he says. Blackbaud, based in South Carolina, has more than 600 employees and offices in Scotland, Canada and Australia.
Blackbaud, traded on the Nasdaq stock exchange, had sales of close to $120 million last year. StarSoft expects sales of about $130,000 this year, said Meredith.
But being small has its advantages. StarSoft pays practically nothing to operate out of a remodeled garage in a quiet North Spokane neighborhood. Even that’s a big step up from the crowded basement where Meredith, Sales Vice President Kristi Murray and Chief Programmer Aaron Kangas huddled before moving this year.
The company, which has been in business for 11 years, has two primary products. One is DonorWorks, which helps nonprofits manage and track information. The companion product is ChurchWorks, which does the same tasks for church leaders.
StarSoft has about 250 customers, from a few small churches in Spokane to a private diplomat’s school in Rome. It sells to a broad cross-section of groups: colleges, hospitals, agencies, public radio and TV stations, museums and arts groups.
About 80 percent of its sales to date, said Murray, have been to nonprofits. And most of those sales have come from Web-based marketing, where users can download StarSoft’s product, test it and then buy it.
Like most Davids successfully fighting Goliaths, StarSoft tries to pick off new customers one at a time.
Meredith said he tries to find ways to give customers a side-by-side demo of what DonorWorks can do, versus the tools sold by Blackbaud.
“More often than not, they’ll say we give them more features and for far less than what they would pay for the other company product,” he said.
Murray said StarSoft also strives to provide quick customer support. Murray and Kangas are plugged into the phone when they’re inside the company garage, taking calls from customers who are having technical issues.
“I’ve arranged to be here early on a Saturday morning to make sure a customer gets an answer to a problem,” Murray said.
The three workers also know they’re developing software for average people. They don’t develop new features for DonorWorks or ChurchWorks that only will run on the latest, niftiest computers. “We develop for closet ware,” said Meredith, noting that many small and midsized churches and nonprofits are using donated PCs or machines that date back six or more years.
The largest single customer to date, noted Kangas, has been University Presbyterian Church in Seattle. It has about 40 computers all using ChurchWorks.
A lot of its ChurchWorks sales occur with independent community churches, many of them making the big move from paper-based member management to software automation. One example is Shiloh Hill Fellowship, a north Spokane congregation with more than 600 members.
Until a few years ago the church relied on the slow process of tracking members through papers arrayed in file folders. It switched to ChurchWorks and now uses the program to handle tasks that would have taken huge amounts of time, said administrative assistant Anna Johns.
“We have five pastors, and whenever they need a list of contacts, or need to send out correspondence, we just use the database (in ChurchWorks),” Johns said.
Also, when a group will be meeting at the church, “I just select the group, like our Wednesday women’s group, indicate we need nametags, (and) it just prints them out,” said Johns.
Nonprofits have grown increasingly sensitive to the ability to track money contributed by supporters, said Meredith. DonorWorks gives quick and responsive summaries of key data for the group’s full list of donors.
“You can use it to automate messages at given times throughout the year,” he said, or customize it so that it keeps track of donors who make the largest contributions.
“That gives the administrators a good handle on who the group’s top contributors are, and helps with plans to communicate with those donors and make sure that they’re given careful treatment,” he said.
The upswing in the economy, happily, is also being seen among nonprofits nationwide, Meredith said. He plans to add a full-time salesperson in the next several months. That addition, with an increased focus on selling to the more than 1,200 churches and nonprofits in the Spokane-North Idaho area, could lift the company’s sales to $180,000 next year, he predicted.
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