What changed in this filing

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Item 1. Business

2021-02-23 compared with 2020-02-20 · 137 added, 116 removed, 267 unchanged (49% of the section changed)

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We are the world’s leading cloud software company powering social good.

Serving the entire social good community—nonprofits, foundations, companies, education institutions, healthcare organizations and individual change agents— we connect and empower organizations and individuals to increase their impact through cloud software, services, expertise and data intelligence.

Blackbaud brings more than three decades of leadership to this sector:

Serving the entire social good community—nonprofits, higher education institutions, K–12 schools, healthcare organizations, faith communities, arts and cultural organizations, foundations, companies and individual change agents—we connect and empower organizations and individuals to increase their impact through cloud software, services, data intelligence and expertise.

Blackbaud brings nearly four decades of leadership to this sector:

since originally incorporating in New York in 1982 and later reincorporating as a South Carolina corporation in 1991 and as a Delaware corporation in 2004, our tailored portfolio of software and services has grown to support the unique needs of vertical markets, with solutions for fundraising and CRM, marketing, advocacy, peer-to-peer fundraising, corporate social responsibility, school management, ticketing, grantmaking, financial management, payment processing and analytics.

Our solutions are designed to meet the needs of virtually all types of organizations in the social good community, from major global institutions to small charities to individuals.

At the end of 2019 , we had over 45,000 customers located in over 100 countries.

We are deeply proud to play a part in our customers’ success in their missions to provide healthcare and cure diseases, advance education, preserve and share arts and culture, protect the environment, support those in need and more.

At the end of 2020, we had over 45,000 customers located in over 100 countries, with millions of users.

Market Overview

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Worldwide there are millions of social good organizations including nonprofits, foundations, companies, education institutions and healthcare organizations.

Billions of individuals are also active participants in the social good community by donating funds, volunteering their time, advocating for a cause or otherwise engaging with social good organizations.

Billions of individuals are also active participants in the social good community by donating funds, volunteering their time, advocating for a cause, receiving services from or otherwise engaging with social good organizations.

Our estimated current total addressable market ("TAM") is greater than $10 billion.

This includes expansions into new and near adjacencies in 2019, including our Cloud Solution for Faith Communities, our expanded Cloud Solution for Higher Education, as well as our acquisition of YourCause Holdings, LLC ("YourCause") on January 2, 2019.

Traditional methods of fundraising and organizational management are often costly and inefficient

Many social good organizations use manual methods or stand-alone software applications not specifically designed for fundraising and organizational management for institutions like theirs.

Many social good organizations use manual methods or software applications not specifically designed for fundraising and organizational management for institutions like theirs.

Such methods are often costly and inefficient because of the difficulties in effectively collecting, sharing and using donation-related information.

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• Manage and develop complex relationships with large numbers of constituents;

Advocate for policies and behaviors that advance their cause or institution;

2020 Form 10-K

Blackbaud, Inc.

• Advocate for policies and behaviors that advance their cause or institution;

• Communicate their accomplishments and the importance of their mission online and offline;

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Companies, grantmaking institutions and foundations also face unique challenges

Companies, grantmaking institutions and foundations, face their own unique challenges, including the need to:

Companies, grantmaking institutions and foundations, face their own unique challenges in their social good efforts, including the need to:

• Quantify and improve the impact of their grants;

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Our key strategies for achieving this objective are described below.

Delight Our Customers

We intend to make our customers' experience with us effective, efficient and satisfying from their initial interest in our solutions and services through their decision to purchase, engage with customer support and utilize solution enhancements.

We continue to focus on initiatives aimed at improving the consistency and quality of user experience across our offerings.

We also continue to evolve the way we package and sell our offerings to provide high quality and value combined with flexibility to meet the unique needs of our existing and prospective customers.

For example, we have increased the number of our cloud solutions sold under a subscription pricing model, which can make it easier for customers to purchase our solutions.

In addition, we are continuing to integrate value-adding capabilities such as payment services, analytics and business intelligence into our suite of solutions to better address our customers' needs with comprehensive offerings.

We will continue to focus on providing the highest level of solution support, enhancing our existing solutions and developing new solutions and services designed to help our customers be more effective and achieve their missions.

2020 Form 10-K

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It is also enabling our growing ecosystem of partners who are also passionate about social good, to extend and expand the capabilities available to our customers.

For the first time in the history of the Company, beginning in 2019, there are now significantly more outside developers developing on our platform than Blackbaud engineers.

During 2020, we continued making critical investments in research and development and increased our engineering hiring during the fourth quarter.

We also released the Blackbaud Marketplace during 2020, offering curated third-party apps, enabling organizations of all types and sizes to discover new ways to amplify their impact by enhancing their best-of-breed Blackbaud solutions with specialized capabilities like connecting bidders at fundraising auctions, tracking branded merchandise purchased in an online store or texting volunteers about an upcoming event.

The customers we serve require vertical specific business solutions to automate their operations.

In October 2019, we announced the general availability of Blackbaud Church Management™, which is already transforming the faith community technology landscape.

We now serve congregations in more than half of the 50 U.S.

states, representing all different sizes and spanning more than 13 denominations.

Bringing this solution to market is a significant step toward addressing several challenges in the faith market and a substantial opportunity for Blackbaud.

We are seeing positive momentum as more functionality continues to be released, market awareness is increasing and win rates are improving.

We are also seeing momentum continue to build in our Higher Education Vertical where Blackbaud powers 24 of the top 25 private U.S.

colleges as ranked by Forbes.

A year after introducing the Cloud Solution for Higher Education, we continue to drive innovation and introduce solutions taking full advantage of the rapid innovation, modern user experience and enhanced capabilities made possible by our Blackbaud SKY platform.

We extended our industry proven Education Management portfolio up market to small-scale higher education institutions.

We are seeing strong sales momentum and look forward to seeing these customers begin to go live in 2020.

We also recently introduced talent management capabilities as part of the Cloud Solution for Higher Education, providing institutions the first online performance tracking tool for fundraising leaders and managers, enabling transparency, proactive management and peer gift officer benchmarking.

Throughout 2020, we have remained focused on driving value and outcomes for our customers.

We reprioritized and expedited product enhancements to support our customers' needs, especially in light of COVID-19 and the continued shift to virtual, digital-first operating models.

For example, we released fitness tracking integration in Blackbaud’s peer-to-peer fundraising portfolio, a new virtual prayer wall enabling congregants at houses of worship to share and respond to prayer requests online, text messaging capabilities for scholarship directors and higher education institutions to ensure no funds were going unutilized and expanded the global capabilities of YourCause CSRConnect making it easier for companies to bring employees across geographies together in support of causes around the world.

Blackbaud Peer-to-Peer Fundraising powered by JustGiving continues to gain traction.

Since the U.S.

launch in early 2019, over 1,000 customers have signed up to use the solution and roughly half of these organizations are net new customers to Blackbaud.

During 2020, we migrated everydayhero customers over to Blackbaud Peer-to-Peer Fundraising powered by JustGiving and sunset the everydayhero product as we continue to rationalize our portfolio while continuing to delight our customers with innovative cloud solutions.

Drive Sales Effectiveness

We have been investing in sales and marketing to better address our market opportunity with a focus on adding additional sales headcount, improving productivity and putting a greater focus on adding net new logos.

One way we are equipping our growing salesforce to be more effective is by investing in the necessary technology and resources to efficiently drive an increased number of quality leads and better cover our large addressable market.

We have grown our lead generation teams, which we call business development representatives, to support our growing sales teams.

We have simultaneously increased the productivity of our business development representatives with the implementation of a leading sales engagement technology platform, enabling our teams to generate more prospects, and convert those prospects into sales opportunities.

We are entering 2020 with an improved ratio of business development representatives to account executives, and the lead generation from the team has increased substantially as a result of these changes.

We have also implemented software tools to enhance our digital footprint and drive lead generation across the company.

For the first time ever, we are taking a multi-touch attribution approach to measuring the effectiveness of our marketing campaigns to drive efficiency in our go-to-market efforts and improve returns on our marketing dollars.

We have been investing in sales and marketing to better address our market opportunity with a focus on digital lead generation.

One way we are equipping our salesforce to be more effective is by investing in the necessary technology and resources to efficiently drive an increased number of quality leads and better cover our large addressable market.

We have implemented software tools to enhance our digital footprint and drive lead generation across the company.

We are taking a multi-touch attribution approach to measuring the effectiveness of our marketing campaigns to drive efficiency in our go-to-market efforts and improve returns on our marketing dollars.

This is just one of many examples of how we are optimizing our structure, tools and processes to better address our large vertical market opportunities.

We have made significant strides in laying the foundation to develop a highly productive and scalable operating model, which included significant organizational structure changes as we centralized many back-office functions and aligned our go-to-market efforts by vertical.

This transformation is now behind us, putting us in a position to drive productivity across our vertical sales teams.

2019 Form 10-K

Blackbaud, Inc.

In January 2019, we acquired YourCause, which positions us as a global leader in corporate social responsibility and employee engagement technology.

One third of Fortune 500 companies trust Blackbaud as their CSR technology partner, and in 2019 alone, YourCause solutions processed over $1 billion dollars in donations and grants which benefited over 170,000 social good organizations.

In the year since the acquisition, we have fully integrated YourCause's administrative functions into our global centers of excellence and expanded the sales team to fuel what is already a fast-growing business within the company.

Our TAM now stands at over $10 billion, and we remain active in the evaluation of opportunities to further expand our addressable market through acquisitions and internal product development.

We have also taken lessons learned throughout 2020 and re-evaluated elements of our go-to-market strategy with a digital-first mindset and we have a significant opportunity to leverage the investments into digital to reduce our customer acquisition cost and increase our sales velocity, ultimately, driving a more scalable and cost-effective go-to-market model.

We did not complete any acquisitions during 2020 as we have remained vigilantly focused on supporting our customers and employees during this time.

We remain active in the evaluation of opportunities to further expand our addressable market through acquisitions and internal product development.

We believe we have significant opportunities in front of us as we are less than 10% penetrated into a total addressable market of over $10 billion.

Improve Operating Efficiency

We are also focused on operational efficiency to strengthen the business and position us for long-term success.

During 2019, we continued executing a comprehensive workplace strategy to better align our organizational objectives with our geographic footprint.

We designated Charleston, South Carolina, Austin, Texas, London, United Kingdom ('U.K.") and Sydney, Australia as our hub locations, and we have leveraged a more flexible office strategy to replace and upgrade some of our former offices and expand our footprint into new locations for customer-facing roles.

Most recently, we moved our London offices into a new flexible workspace marking a significant milestone in the integration of our Blackbaud Europe and JustGiving teams.

In 2019, we largely completed this optimization effort, and we will continue to evaluate our footprint in alignment with our global workplace strategy.

During 2020, we pivoted to place a greater emphasis on profit in alignment with the balanced approach management takes to operating the business.

As a result of the pandemic, our near term visibility into revenue growth was impacted and we took certain actions early on to ensure our liquidity (see Note 2 to our consolidated

2020 Form 10-K

Blackbaud, Inc.

financial statements in this report for a discussion of some of these actions) and shifted more of ou r focus to profitability.

Our employees switched to working fully remote at the onset of the pandemic and the business continued operating smoothly.

This caused us to re-evaluate our workforce strategy and when employees return to the office, we will have more employees working remotely either part-time or full-time, even within our hub locations.

As a result, we revisited our real estate strategy with a focus on optimizing our footprint for the future of work at Blackbaud, including the purchase of our LEED (Leadership in Energy & Environmental Design) Gold certified global headquarters facility in Charleston, South Carolina ("Global Headquarters Facility") and exit of certain office leases globally, as we will not need as much of an office footprint going forward.

Our aim is optimizing our office utilization, improving our geographic sales coverage and enhancing our employees' daily experience to improve productivity and effectiveness.

Attract Top Talent and Actively Engage Employee Base

Delight Our Customers

We continue to focus on initiatives aimed at improving the consistency and quality of user experience across our offerings.

We also continue to evolve the way we package and sell our offerings to provide high quality and value combined with flexibility to meet the unique needs of our existing and prospective customers.

For example, we have increased the number of our cloud solutions sold under a subscription pricing model, which can make it easier for customers to purchase our solutions.

We will continue to focus on providing the highest level of solution support, enhancing our existing solutions, extending our solutions through open APIs and developing new solutions and services designed to help our customers be more effective and achieve their missions.

Attract and Retain Top Talent and Actively Engage Employee Base

Our higher purpose is to help good take over the world, and we have incredible customers whose missions make the world a better place.

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Collaboration, innovation and high standards are core to our culture and help to enable the great work we do.

We strive to hire the best employees and provide a workplace where their talents and potential are realized.

Our employees' engagement is a focus of every leader at Blackbaud, and we continually work to understand what matters and to make our workplace better.

We believe people with a passion for purpose can have a unique and fulfilling career experience on our team.

Our leaders are committed to our employees' personal and career development and continually work to improve the training and tools provided to their teams.

We strive to hire and retain the best employees and provide a workplace where their talents and potential are realized.

For additional information, see “Human Capital Resources” below.

Drive Strength in Our Sector as an Industry Thought Leader

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The research and reports the Blackbaud Institute produces serve to strengthen the social good community as a whole.

In 2019, we announced our partnership with One Million by One Million ("1Mby1M") to launch the Social Good Start-up Challenge focused on tech start-ups on a mission to solve problems that matter to the social good community.

We also announced The Explorer by Blackbaud Institute, the premier online knowledge base for information and statistics about social good.

sgENGAGE, our blog and podcast, provides free best practices resources that drive impact across the social good community, as well.

Last year, we announced our partnership with One Million by One Million ("1Mby1M") to launch the Social Good Start-up Challenge focused on tech start-ups on a mission to solve problems that matter to the social good community.

In 2020, we announced we’ve expanded this initiative into the Blackbaud Social Good Startup Program, a year-long accelerator designed to support innovative startups with the potential to impact the ecosystem of good.

In alignment with our commitment to diversity in the tech community, we focused our January 2021 cohort on founders from underrepresented backgrounds.

Last year, we also announced The Explorer by Blackbaud Institute, the premier online knowledge base for information and statistics about social good.

Content is updated regularly and is provided free of charge to the public as a part of Blackbaud’s give-back philosophy.

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Solutions and Services

We offer the social good community comprehensive cloud solutions to advance their missions, backed by our data intelligence services, which deliver insights powered by, what we believe is, the world's most robust philanthropic data set.

Our solutions can be combined with a range of consulting, training and professional services, maintenance and technical support, as well as payment processing, analytic and business intelligence services.

We offer the social good community comprehensive cloud solutions to advance their missions, backed by our data intelligence services, which deliver insights powered by what we believe to be the world's most robust philanthropic data set.

Our solutions can be combined with a range of payment processing, analytic and business intelligence services, consulting, training and professional services, as well as maintenance and technical support.

The Blackbaud portfolio is delivered primarily through cloud solutions tailored to the unique needs of vertical markets, offering fundraising and relationship management, marketing and engagement, financial management, grant and award management, organizational and program management (such as education management, church management and ticketing), social responsibility, payment services and analytics.

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Blackbaud Peer-to-Peer Fundraising, powered by JustGiving provides world-class technology and innovative tools to connect people with the causes they care about.

By making giving more simple, social and rewarding, JustGiving helps all causes, charities and people in need to reach more people and raise more money.

everydayhero® is a cloud solution designed to meet the peer-to-peer fundraising needs of nonprofits' supporters.

It is a leading donor acquisition tool and helps nonprofits connect with a younger, more online-focused generation of donors, a first step in helping nonprofits develop long-term relationships with their supporters.

By making giving more simple, social and rewarding, this platform helps all causes, charities and people in need to reach more people and raise more money.

Blackbaud Guided Fundraising™ and Blackbaud Volunteer Network Fundraising™ can work together or independently to help higher education institutions meet their advancement targets and development campaign goals.

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Blackbaud Volunteer Network Fundraising helps institutions manage volunteer fundraising campaigns with tools for project management, communication and reporting.

2019 Form 10-K

Blackbaud, Inc.

Marketing and Engagement

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It includes tools to build online fundraising campaigns as part of an organization's existing website or as a stand-alone fundraising site.

Donation forms, gift processing and tools for communicating through web pages and email give our customers the essentials for building sustainable donor relationships.

Donation forms, gift processing and tools

2020 Form 10-K

Blackbaud, Inc.

for communicating through web pages and email give our customers the essentials for building sustainable donor relationships.

Customers can also purchase additional modules including Blackbaud Luminate Advocacy ™ , which combines online marketing tools and legislative data to mobilize supporters and influence policy-makers.

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It provides nonprofits with easy-to-use, fully integrated features and functionality such as email marketing, donation forms, event registrations and dashboard metrics.

Blackbaud Attentive.ly™ is a cloud portal enriched with data that allows marketers to drive engagement with their organization or institution by providing social media insights.

It can be used as a stand-alone application or integrated into Blackbaud’s fundraising and marketing applications, helping marketers reach new audiences and shape meaningful conversations online.

Blackbaud School Website System™ is a content management system that gives schools the flexibility to build and edit webpages, with easy access to content types including photos, videos, downloads, text and more.

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The solution helps ease the burden for administrative staff by offering invoicing, payment processing, customer service, enhanced communication with parents and later payer follow-up services.

Blackbaud Financial Aid Management Aid™ offers schools the ability to accept online, customized applications for financial aid and to make better financial aid decisions with a proprietary Hobbies, Interest and Lifestyles ("HIL") profile.

Blackbaud Financial Aid Management™ offers schools the ability to accept online, customized applications for financial aid and to make better financial aid decisions with a proprietary Hobbies, Interest and Lifestyles ("HIL") profile.

The HIL profile provides in-depth information on an applicant, delivering to the school a way to make more informed decisions on how they distribute financial aid awards.

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This leads to improved awarding, reporting, compliance, communication and stewardship.

2019 Form 10-K

Blackbaud, Inc.

Organizational and Program Management

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Developed with direct input from our customers, Blackbaud Learning Management System gives teachers the tools to meet the demands of a modern private school.

2020 Form 10-K

Blackbaud, Inc.

Blackbaud Enrollment Management System™ is an enrollment management system that simplifies a school’s admissions process.

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Social Responsibility

YourCause™ is a cloud platform for employee giving, volunteering, and communication used to support corporate philanthropy by building meaningful connections between corporations, employees and nonprofits.

YourCause® Grants Connect® and YourCause CSR Connect® are cloud solutions for employee giving, volunteering, and communication used to support corporate philanthropy by building meaningful connections between corporations, employees and nonprofits.

After implementing YourCause solutions, customers typically show significant growth in volunteers, donations, engagement and more.

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overall ability to attract employees and customers alike by strengthening a company's reputation.

Eight million people can currently engage with YourCause's solution, which processed more than $1 billion in donations and grants during 2019 and has coordinated, tracked and rewarded more than 42 million volunteer hours for its customers.

Payment Services

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Organizations can also set spend controls for individual cardholders, track business expenses across the organization and ensure that policies are being enforced—all managed online and integrated with Blackbaud Financial Edge NXT.

2019 Form 10-K

Blackbaud, Inc.

Our analytics offerings provide comprehensive solutions for donor acquisition, prospect research, data enrichment and performance management, enabling nonprofits to define effective campaign strategies and maximize fundraising results.

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We embed the value of Intelligence for Good directly in our solutions through SKY Intelligence®.

2020 Form 10-K

Blackbaud, Inc.

Our analytics offerings include subscription solutions and services within the following areas:

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Customer Success

Our Customer Success organization is responsible for managing the business and technical relationship with our customers.

Their mission is to develop and foster relationships within all levels of the customer organization to build more demonstrated value in our solutions and services.

Our Customer Success organization is responsible for managing the post-sale relationship with our customers, starting at onboarding and continuing through the customer lifecycle.

Our Customer Success team develops and fosters relationships within all levels of the customer organization to build more demonstrated value in our solutions and services, while helping customers achieve their desired outcomes.

Customer Success Managers work to proactively communicate to drive overall satisfaction and retention of our customer's business.

At every point of communication, they work to collect and analyze actionable information that can be used to make their experience positive and consistent.

They work to collect and analyze actionable information, whether that is through direct customer relationships or through aggregated analytics that drives future one-to-one or one-to-many interactions.

Their goal is to partner with customers to ensure that they are fully engaged and have an advocate within Blackbaud who works to meet their needs.

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Most customers that purchase our solutions also enroll in one of our support and maintenance programs.

For all of our cloud subscription solutions, customer support is automatically included as part of the solution with no additional charge.

For all our cloud subscription solutions, customer support is automatically included as part of the solution with no additional charge.

Customers enrolled in the programs enjoy fast, reliable customer support, receive regular software updates, stay up-to-date with regular communication and have unlimited, around-the-clock access to support resources, including our extensive knowledgebase and forums.

Customers who enroll in upgraded support and maintenance plans receive enhanced benefits such as call support priority and dedicated support resources for an additional charge.

2019 Form 10-K

Blackbaud, Inc.

Professional and Managed Services

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In addition, we apply our industry knowledge and experience, combined with expert knowledge of our solutions, to evaluate an organization's needs and consult on how to improve a business process.

We provide a variety of onsite, instructor-led online and on-demand training services to our customers relating to the use of our solutions and application of best practices.

2020 Form 10-K

Blackbaud, Inc.

We provide a variety of onsite, instructor-led online and on-demand training services to our customers relating to the use of our solutions and application of best practices, including our highly-rated Blackbaud University curriculum, through which customers can achieve certifications on Blackbaud software, which can serve as important catalysts for professional growth in the nonprofit industry.

Our instructors have extensive training in the use of our solutions and present course material that is designed to include hands-on lab exercises, as well as course materials with examples and problems to solve.

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We conduct marketing programs to create brand recognition and market awareness for our solutions and services.

Our marketing efforts include participation at tradeshows, technical conferences and technology seminars, publication of technical and educational articles in industry journals, preparation of competitive analyses and the use of software tools to enhance our digital footprint and drive lead generation.

Our marketing efforts include participation at trade shows, technical conferences and technology seminars, publication of technical and educational articles in industry journals, preparation of competitive analyses and the use of software tools to enhance our digital footprint and drive lead generation.

Our customers and strategic partners provide references and recommendations that we often feature in our advertising and promotional activities.

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These companies promote or complement our solutions and provide us access to new customers.

2019 Form 10-K

Blackbaud, Inc.

Corporate Philanthropy and Volunteerism

Blackbaud operates under a fundamental belief that the world would be better if good took over.

The company is an active participant in the ecosystem of good, working to drive positive change both through what we do as a business and how we serve individually.

We offer an array of philanthropy programs aimed at engaging our employees as agents of good, including matching gifts, competitive grants that honor excellent examples of volunteerism, employee-led grants committees, skills-based volunteerism initiatives, as well as science, technology, engineering and mathematics focused community programs.

Blackbaud attracts people who are committed to service, with 89% saying our focus on nonprofits was a driver in their decision to join the company, 89% actively serving as volunteers and 25% serving on a nonprofit board or committee.

The market for software and related services in the philanthropic industry is competitive and highly fragmented.

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However, once basic needs are met, programs unique to social good organizations like fundraising, gift and grant management, and peer-to-peer activism require highly specialized tools to configure and transform general business software to match the complexities of the industry.

These specialized applications have a higher barrier of entry as they require industry insight to accurately articulate the business workflow that generates the requirements that are translated into code for software products.

These specialized applications have a higher barrier of entry as they require industry insight to accurately articulate the business workflow that generates the requirements for software products.

Moreover, because social good organizations rely heavily on relationships with and among their supporters, integration of systems drives value beyond mere efficiency.

Hence, we believe our insight, the full spectrum of our current solutions and our ability to deliver on future solutions makes us a strong competitor.

We expect to continue to see new entrants as focus on social investment solutions increases to satisfy Millennial and Gen Z donors, the barriers of entry continue to decline with natively cloud solutions, and social good organizations rely intrinsically on technology to manage emerging revenue channels and increasingly complex operations.

We expect to continue to see new entrants as focus on social investment solutions increases to satisfy Millennial and Gen Z donors, the barriers of entry continue to decline with natively cloud solutions and social good organizations more readily require digital transformation of business processes and data-driven decision making.

2020 Form 10-K

Blackbaud, Inc.

Our competition falls into four primary categories:

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These products generally do not satisfy the needs of nonprofits from end-to-end as they were not designed to support the specific needs of nonprofits during the original architecture, design, and requirements elicitation phases;

therefore, we believe that because these products were not originally designed for nonprofits, they are not yet capable of meeting market needs without significant customization.

The significant customization required to transform general business products into nonprofit solutions often requires the use of consultants to guide the implementation, without which, leave the adoption of general business software

2019 Form 10-K

Blackbaud, Inc.

limited to very basic operations and simple needs.

therefore, we believe that because these products were not originally designed for nonprofits, they are not yet fully capable of meeting market needs without significant customization.

We believe our solutions compete successfully against general business software as a nonprofit’s needs grow more complex.

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The platform’s service-oriented architecture organizes application features into independently deployable services and then leverages these self-contained services as integrated capabilities across our solution portfolio.

This enables rapid innovation with high quality and high availability and lets Blackbaud evolve services over time at asymmetric paces as tech trends and tools emerge.

Blackbaud SKY prioritizes customer value and speed of delivery.

This enables rapid innovation with high levels of reliability, availability and security, and lets Blackbaud evolve services over time at asymmetric paces as tech trends and tools emerge.

Blackbaud SKY prioritizes customer value, including risk management, and speed of delivery.

It enables rapid releases, scalable and high-quality services, and speedy time to market.

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SKY API enables developers to augment Blackbaud solutions with industry-standard REST APIs, standards-based authentication protocols, and a best-in-class developer experience.

SKY UX allows developers to create applications with the same consistent, cohesive user interface as Blackbaud’s native solutions using an open source framework that implements Blackbaud design patterns and provides guidelines and tooling for the entire application lifecycle.

SKY UX allows developers to create applications with the same consistent, cohesive user interface

2020 Form 10-K

Blackbaud, Inc.

as Blackbaud’s native solutions using an open source framework that implements Blackbaud design patterns and provides guidelines and tooling for the entire application lifecycle.

These tools enable Blackbaud customers to benefit not just from the innovation of Blackbaud’s own large team of developers, but also from an exponentially larger community of partners and third-party developers.

The development strategy for all Blackbaud cloud solutions emphasizes:

• Flexibility:

Customers can extend our component-based architecture to accommodate changing demands without modifying source code.

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The architecture of our applications allows us to easily add functionality or integrate with third-party applications to adapt to customer needs and market demands.

• Scalability:

Scalable architecture and the performance, capacity and load balancing of our customers' industry-standard web servers and databases ensure that applications can scale to meet the needs of large organizations.

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To protect our intellectual property, we rely on a combination of patent, trademark, copyright and trade secret laws in various jurisdictions, as well as employee and third-party nondisclosure agreements and confidentiality procedures.

We maintain many trademarks, including, but not limited to “Blackbaud,” “Raiser's Edge NXT” and “Luminate.” We currently have three active patents on our technology and have two pending patent applications.

We maintain many trademarks, including, but not limited to “Blackbaud,” “Raiser's Edge NXT” and “Luminate.” We currently have one active patent on our technology and have two pending patent applications.

Human Capital Resources

As of December 31, 2020, we had over 3,100 employees, none of whom are represented by unions or are covered by collective bargaining agreements.

We are not involved in any material disputes with any of our employees, and we believe that relations with our employees are strong.

We benefit from an engaged and driven employee base motivated to join the company by our higher purpose, which is "to help good take over the world." Our purpose attracts talented, competitive applicants, with 92% of employees saying our focus on social good organizations was a driver in their decision to join the company.

This differentiator not only builds stronger employee engagement, but it helps us to provide a higher level of service to our customers across the social good community, with 92% of employees reporting that they actively serve as volunteers and 23% serving on a nonprofit board or committee — direct experience that enables them to better serve our customer base.

Blackbaud also attracts talented employees through effective and targeted recruiting strategies.

In 2020, Blackbaud announced the launch of a new workforce strategy, allowing for many employees to have the option to work from other geographic locations within the country of the position, helping to expand the pool of qualified applicants for roles.

Employee engagement is a focus at Blackbaud, and we continually work to understand what matters and to make our workplace better to attract, develop, and retain talent.

Every manager at Blackbaud is required to take a multi-course "Engagement Labs" training designed to equip them with the practical skills to ensure their teams are highly engaged.

We assess and measure progress on engagement and growth opportunities at the individual level through quarterly check-ins and a global career framework that guides employee progression on both management and individual contributor career paths;

we also assess engagement on the team and company level through regular employee surveying.

We enable employees to have opportunities for career development through on-demand and company-led trainings.

Our compensation framework is designed so that employees are compensated equitably and competitively, including through base salary, variable pay, equity awards and benefits.

We also seek to support the whole person, through benefits that support wellness and financial health.

Ultimately, we believe that Blackbaud is an excellent place to work due to our active participation in the Ecosystem of Good®:

we govern our business ethically, contribute to causes and communities that matter to our employees through corporate philanthropy, we pursue sustainability, and we work every day to ensure our workplace is supportive, inclusive and engaging.

We offer an array of philanthropy programs aimed at engaging our employees as agents of good, including matching gifts, competitive grants that honor noteworthy examples of volunteerism, employee-led

2020 Form 10-K

Blackbaud, Inc.

As of December 31, 2019 , we had 3,611 employees, none of whom are represented by unions or are covered by collective bargaining agreements.

We are not involved in any material disputes with any of our employees, and we believe that relations with our employees are satisfactory.

grant committees, skills-based volunteerism initiatives, as well as science, technology, engineering and mathematics focused community programs.

Our commitment to diversity, equity and inclusion supports our efforts to attract, develop and retain a high-performing employee base.

In September 2020, we welcomed our first Diversity and Inclusion Officer, as part of our strategy to further accelerate our diversity, inclusion and belonging efforts, while continuing to strengthen relationships with our people and the communities in which we operate.

This new leadership focus will amplify and accelerate the significant initiatives already in place at Blackbaud, including:

ongoing unconscious bias workshops;

respect in the workplace training for all employees and enhanced training for managers;

business networking affinity groups, including veterans, LGBTQ employees, women in technology, women in sales, African American employees and employees interested in sustainability.

For a discussion of seasonal variations in our business, see “Management’s Discussion and Analysis of Financial Conditions and Results of Operations — Seasonality” in Item 7 in this report.

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The following table sets forth information concerning our executive officers as of February 15, 2021:

President and Chief Executive Officer

Executive Vice President and Chief Financial Officer

Executive Vice President and President, General Markets Group

Executive Vice President and President, Enterprise Markets Group

Senior Vice President and General Counsel

Name Age Title

Gianoni 60 President and Chief Executive Officer

Boor 58 Executive Vice President and Chief Financial Officer

Gregoire 53 Executive Vice President and President, Enterprise Markets Group

53 Executive Vice President and Chief Products Officer

Mooney 62 Executive Vice President and President, General Markets Group

Olson 57 Senior Vice President and General Counsel

McDearis was designated by our Board of Directors as an executive officer as defined in Rule 3b-7 of the Exchange Act effective January 1, 2021.

Gianoni joined us as President and Chief Executive Officer in January 2014.

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Gianoni was Executive Vice President and General Manager of CheckFree Investment Services, which provided investment management solutions to financial services organizations, from June 2006 until December 2007 when CheckFree was acquired by Fiserv.

From May 1994 to November 2005, he served as Senior Vice President of DST Systems Inc., a global provider of technology-based service solutions.

From May 1994 to November 2005, he served as

2020 Form 10-K

Blackbaud, Inc.

Senior Vice President of DST Systems Inc., a global provider of technology-based service solutions.

Gianoni is a member of the Board of Directors of Teradata Corporation, a publicly traded global big data analytics company.

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He holds an AS in electrical engineering from Waterbury State Technical College, a BS with a business concentration from Charter Oak State College, and an MBA and an honorary Doctorate from the University of New Haven.

2019 Form 10-K

Blackbaud, Inc.

Boor joined us as Executive Vice President and Chief Financial Officer in November 2011 and served as our interim President and Chief Executive Officer from August 2013 to January 2014.

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He holds a BS in Accounting from New Mexico State University.

Gregoire joined us as Executive Vice President and President, Enterprise Markets Group in April 2018.

Prior to joining us, Mr.

Gregoire was Group President of the Financial Institutions Group at Fiserv, a global technology provider serving the financial services industry, from March 2014 until February 2018.

He joined Fiserv in December 2002 and served in other key leadership roles including Division President and Chief Operating Officer, Card Services, and Senior Vice President of Product and Network Strategy.

Gregoire is also a veteran of the United States Army, where he served as Lieutenant in the Corps of Engineers and was awarded three Army Commendation Medals.

He holds a BS from the United States Military Academy at West Point, and an MBA from the F.W.

Olin School of Business at Babson College.

McDearis has served as our Executive Vice President and Chief Products Officer since October 2016.

He joined us in August 2014 as our Senior Vice President of Global Product Development.

Prior to joining us, Mr.

McDearis was the Chief Information Officer at Manhattan Associates, Inc., a technology leader in supply chain and omnichannel commerce, from August 2012 to July 2014.

He was responsible for leading a global IT organization in strategy development, organization development, portfolio and project management, software and infrastructure engineering, service delivery and operations.

Prior to that, Mr.

McDearis served as Chief Technology Officer for the Enterprise Technology Group and other key leadership positions at Fiserv (formerly CheckFree), a global technology provider serving the financial services industry, from October 1996 to August 2012.

McDearis serves on the Board of Directors for the USS Yorktown Foundation.

He also served on the Board of Directors of the Technology Association of Georgia ("TAG") from 2011 to 2016 and as Vice Chairman of the Board in 2014.

He holds a BS in Management from The Georgia Institute of Technology.

Mooney has served as our Executive Vice President and President, General Markets Group since January 2010.

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He holds a BS in Finance from Seton Hall University, and an MBA in Finance from Georgia State University.

Gregoire joined us as Executive Vice President and President, Enterprise Markets Group in April 2018.

Prior to joining us, Mr.

Gregoire was Group President of the Financial Institutions Group at Fiserv, a global technology provider serving the financial services industry, from March 2014 until February 2018.

Gregoire is also a veteran of the United States Army, where he served as Lieutenant in the Corps of Engineers and was awarded three Army Commendation Medals.

He holds a BS from the United States Military Academy at West Point, and an MBA from the F.W.

Olin School of Business at Babson College.

Olson joined us as Senior Vice President and General Counsel in September 2008.

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Prior to joining us, he was an attorney with Alcatel-Lucent USA, the U.S.

2020 Form 10-K

Blackbaud, Inc.

subsidiary of France-based Alcatel-Lucent (now owned by Nokia Corporation) that designs, develops, and builds wireline, wireless, and converged communications networks, from July 1997 to September 2008.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business