What changed in this filing

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Item 1. Business

2023-02-24 compared with 2022-03-01 · 157 added, 158 removed, 266 unchanged (54% of the section changed)

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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 (CSR) and environmental, social and governance (ESG), 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.

During 2021, we had nearly 40,000 customers with contractual billing arrangements and nearly 100,000 customers that paid Blackbaud through transactional fees.

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

During 2022, we had more than 40,000 customers with contractual billing arrangements and nearly 100,000 customers that paid Blackbaud through transactional fees.

Through our customers and our solutions, Blackbaud supports millions of users and we connect millions of supporters to over 150,000 organizations and causes in over 100 countries.

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Market Overview

The social good industry is significant, spanning far beyond philanthropy, and our addressable market is substantial and growing

Worldwide there are millions of social good organizations including nonprofits, foundations, companies involved in corporate social responsibility and ESG, 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, receiving services from or otherwise engaging with social good organizations.

Our estimated current total addressable market ("TAM") is greater than $20 billion.

This includes our acquisition of EVERFI, Inc.

("EVERFI") in December 2021, as described in Note 3 to our consolidated financial statements in this report.

EVERFI is an international technology company driving social impact through education to address the most challenging issues affecting society ranging from financial wellness to mental health to workplace conduct and other critical topics.

EVERFI's educational solutions reach both adult and K-12 learners.

To date, EVERFI has reached more than 45 million learners globally.

The social impact market is significant, spanning far beyond philanthropy, and our addressable market is substantial and growing

There are millions of organizations globally focused on social impact including nonprofits, foundations, companies involved in corporate social responsibility and ESG, education institutions and healthcare organizations.

Billions of individuals also engage by donating funds, volunteering their time, advocating for a cause, receiving services from or otherwise engaging with social impact organizations.

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

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

Many social impact 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.

Furthermore, general purpose software applications frequently have limited functionality for the unique needs of our customer base and do not efficiently integrate multiple databases.

Some social good organizations have developed proprietary software, but doing so is expensive, requiring on-site technical personnel for development, implementation and maintenance.

2021 Form 10-K

Blackbaud, Inc.

Some social impact organizations have developed proprietary software, but doing so is expensive, requiring on-site technical personnel for development, implementation and maintenance.

The nonprofit industry faces particular operational challenges

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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;

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

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• Provide a wide array of programs and services to individual constituents and beneficiaries;

2022 Form 10-K

Blackbaud, Inc.

• Improve the data collection and information sharing capabilities of their employees, volunteers and donors by creating and providing distributed access to centralized databases.

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Companies, grantmaking institutions and foundations also face unique challenges

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

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

• Quantify and improve the impact of their grants;

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• Cultivate new and existing donors.

Our objective is to maintain and extend our position as the leading provider of cloud software and services for the global social good community, supporting our customers' missions from securing resources and managing their operations, to delivering their programs and measuring their impact.

Our objective is to maintain and extend our position as the leading provider of cloud software and services for the global social impact community, supporting our customers' missions from securing resources and managing their operations, to delivering their programs and measuring their impact.

Our key strategies for achieving this objective are described below.

2021 Form 10-K

Blackbaud, Inc.

Execute on our Four-Point Growth Strategy

During 2021, we continued to execute our four-point growth strategy targeted to drive solution and service innovation, quality enhancement, increased operating efficiency and improved financial performance:

Execute on our Four-Point Strategy

During 2022, we continued to execute our four-point strategy targeted to drive solution and service innovation, quality enhancement, increased operating efficiency and improved financial performance:

Expand Total Addressable Market ("TAM")

In December 2021, we doubled our TAM when we acquired EVERFI, an industry leader in global social impact technology.

In December 2021, we doubled our TAM when we acquired EVERFI, Inc.

("EVERFI"), an industry leader in global social impact technology.

Adding EVERFI advances our position as a leader in the rapidly evolving ESG and CSR spaces and offers cross-selling and upselling opportunities through complementary product offerings with YourCause® solutions.

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Lead with World Class Teams and Operations

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 also taken lessons learned throughout the pandemic 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.

Delight Customers with Innovative Cloud Solutions

This strategy reflects our relentless focus on driving value and outcomes for our customers through our solutions.

Blackbaud SKY®, our platform for cloud innovation, is a core tenant of this strategy and continues to power an elevated level of innovation by our engineers.

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.

During 2021, we continued making critical investments in research and development.

Through our commitment to giving customers the flexibility to benefit, not just from Blackbaud's innovation, but the innovation happening outside of our walls, we developed more tools designed to create new capabilities that extend Blackbaud solutions.

We now have over 6,000 non-Blackbaud developers registered in our ecosystem and we have seen substantial growth in the Blackbaud marketplace, where over 6,500 organizations have found a curated app to help them work smarter.

Some of the use cases we have seen in the market include:

an app that integrates Shopify with Raiser's Edge NXT® and a new API integrating YourCause with Workday, enabling our customers to easily connect employee data into the YourCause platform for more effective employee engagement.

We have also enabled non-developers with low-code or no-code tools, such as our Microsoft Power Platform connector, to build automated workflows with our APIs without having to be seasoned developers and we continue to innovate as online gifts become a greater share of our customers' total donations.

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

In 2021, we released a variety of enhancements enabling them to maximize their time, team, and relationships, including substantial updates to Blackbaud Grantmaking and a significant release for accounts receivable functionality in Blackbaud Financial Edge NXT® is now with early adopters.

This strategy expands upon our previous strategies to drive sales effectiveness and improve operating efficiency to include improving overall company performance as measured by the Rule of 40 (see discussion of Non-GAAP Financial Measures below).

During 2022, we announced a series of strategic organizational updates to streamline our business operations and become even more customer centric.

We created three new roles:

Chief Operating Officer, Chief Commercial Officer and Executive Vice President of Corporations.

We believe these new roles will:

ensure consistency in our approach to the customer experience;

further streamline and simplify our go-to-market efforts to maximize our outcomes as a global company;

and further align our YourCause and EVERFI offerings and continue our investment in being the partner of choice for corporations focused on social responsibility and impact.

Additionally, we took steps to better align our workforce with our strategic priorities, including further elimination of open positions as well as the difficult decision to reduce our workforce (see additional discussion regarding our workforce reduction below).

We also appointed three new members to our board of directors, providing not only new business perspectives but also adding important skills in cybersecurity, enterprise software, digital transformation and global operations.

2022 Form 10-K

Blackbaud, Inc.

Delight Customers with Innovative Cloud Solutions

During our annual user conference, bbcon, we shared how our purpose-built solutions bring together the capabilities essential to our customers in managing their data, making their teams more productive, motivating their audiences to act, and ultimately driving outcomes.

During the third quarter, we acquired Kilter, an intuitive, gamified, activity-based engagement app.

We will initially pair Kilter with our Blackbaud TeamRaiser solution to serve nonprofits by expanding the ways they can engage with their supporters to prepare for their existing fundraising walks, runs and rides, and to create new types of engagement opportunities that are not tied to a specific date or place.

Kilter will also provide a unique solution with YourCause CSRConnect platform for companies as employers take a more active role in supporting their employees’ health and wellness pursuits across their remote and distributed workforces.

Focus on Employees, Culture and ESG Initiatives

During the first quarter of 2021, we elevated a specific strategy focused on our employees, culture and ESG initiatives.

This is not new for us.

It is something that is in our DNA and is a big advantage as we look to attract and retain top talent.

This is evident in our 2020 social responsibility report, which was released in April 2021.

We are fully committed to continuing to create a diverse and inclusive environment at all levels of the organization.

Early in 2021, we established an ESG Steering Committee with our CEO as the executive sponsor, and Board of Directors involvement.

During the first quarter of 2021, we also joined the United Nations Global Compact.

Building on our culture of innovation, we launched a new ideation initiative called "Imagine Week," inviting employees across the globe to pitch their ideas directly to the executive leadership team.

Employees at every level and length of tenure in the company made proposals ranging from fundraising to customer service improvements.

These ideas are making their way into our go-forward plans.

In addition, we recently decided, effective in December 2021, to permanently close our fixed office locations (with the exception of our global headquarters facility in Charleston, South Carolina) to align our real estate footprint with our transition to a remote-first workforce.

We may enter into arrangements for smaller more flexible workspaces where necessary.

This decision did not include EVERFI's office locations.

During 2022, we announced that we achieved carbon neutrality for 2021.

This is a goal we have been striving towards and our shift to a remote-first workforce enabled us to accelerate our timeline.

Since 2019, Blackbaud has reduced its global real estate footprint by 50%, energy emissions to run office space by 63% and employee commute emissions by 75%.

With a multi-pronged climate strategy, Blackbaud is focused on reducing emissions, using energy efficiently and investing in environmental projects for a more sustainable future.

We shared more about our ESG strategy on our Corporate Social Responsibility website during the second quarter.

Our mission driven culture has been in our DNA since inception and is very attractive in a competitive labor market.

We continue to foster a diverse and inclusive environment focused on employee engagement and connectedness with our remote-first workforce strategy.

We have a significant role to play in driving advances in the social impact space, and we are proud of the strong corporate culture we have built and continue to cultivate in today's environment.

Delight Our Customers

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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.

Driven by this purpose, our employees work knowing they make a real difference.

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

Our employees are energized by our opportunity to fuel social impact.

Collaboration, innovation, authentic passion for the customers we serve and high standards are core to our culture and help to enable the great work we do.

We strive to hire, develop and retain the best employees and provide a supportive and inclusive environment where their talents and potential are realized.

During 2021, we expanded our workforce strategy to become "Remote First" which signals Blackbaud's goal to attract talent globally.

In 2021, we formally went Remote First as a company which signals Blackbaud's goal to attract talent globally.

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

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In our over 40 years of operation, we have gained significant insight into the overall market and industry segments in which we operate.

We produce a wide range of thought leadership resources, including blogs, monthly indices and white papers, which provide insights and guidance to the social good community.

We produce a wide range of thought leadership resources, including blogs, monthly indices and white papers, which provide insights and guidance to the social impact community.

We also participate in and convene a number of industry forums, where we exchange views and engage with industry and government leaders.

Our annual user conference, bbcon ® , serves in part as a forum to offer thought leadership to our customers, as do other market-specific user conferences, events and customer gatherings.

The Blackbaud Institute for Philanthropic Impact (the "Blackbaud Institute") brings together leading experts in philanthropy to develop and share leading-edge research and insight that accelerates the impact of the social good community.

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

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

In 2020, we announced 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.

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

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

2022 Form 10-K

Blackbaud, Inc.

In 2020, we announced Blackbaud Social Good Startup Program, a year-long accelerator designed to support innovative startups with the potential to drive social impact.

In alignment with our commitment to diversity in the tech community, we emphasize supporting founders from underrepresented backgrounds.

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 to be the world's most robust philanthropic data set.

We build the essential software that frees customers to focus on what matters most:

delivering impact.

With powerful data intelligence and expertise inside, and an ever-growing network of partners and developers outside, our software is the foundational infrastructure that expands what's possible for anyone dedicated to purpose-driven work.

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.

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, education management, ticketing, social responsibility, payment services and analytics.

Our specific solutions and services include:

Fundraising and Relationship Management

Blackbaud Raiser's Edge NXT® is our flagship cloud fundraising and relationship management solution.

Blackbaud Raiser's Edge NXT is the first and only cloud fundraising and relationship management solution that is all-inclusive, fully integrated with data, analytics, marketing tools, payment processing and tailored user-specific experiences.

Blackbaud Raiser's Edge NXT is, we believe, the most advanced technology available to nonprofits seeking to operate more efficiently and raise more support for their missions.

Fundraising and Engagement

Blackbaud Raiser's Edge NXT® is our flagship fundraising and relationship management solution.

Raiser's Edge NXT is the first and only cloud fundraising and relationship management solution that is all-inclusive, fully integrated with data health, analytics, email marketing, donation forms, event management, payment processing and process automation to create tailored, user-specific experiences.

Built on our Blackbaud SKY Platform, Raiser's Edge NXT is, we believe, the most advanced technology available to nonprofits seeking to operate more efficiently and raise more support for their missions.

Raiser’s Edge NXT includes access to Blackbaud Online Express™, a simple, efficient, cloud-based fundraising and marketing tool designed for smaller nonprofit organizations.

Blackbaud CRM™ is a comprehensive, configurable fundraising and relationship management solution.

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This technology provides a system that is simple to maintain, efficient to operate and is intuitively easy to learn without extensive training.

Blackbaud TeamRaiser® is the industry’s most comprehensive cloud solution designed specifically for event fundraising.

Powering thousands of events each year, Blackbaud TeamRaiser allows nonprofits’ supporters to create personal or team fundraising web pages and send email donation appeals in support of events such as walks, runs and rides.

Blackbaud Luminate Online®, delivered in the cloud, helps our customers better understand their online supporters, make the right ask at the right time and raise money online.

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.

Blackbaud TeamRaiser® is the industry’s most comprehensive cloud solution designed specifically for peer-to-peer event fundraising.

Powering thousands of events each year, TeamRaiser allows nonprofits’ supporters to create personal or team fundraising web pages and send email donation appeals in support of events such as walks, runs and rides.

JustGiving® from Blackbaud® is one of the world's leading social platforms for giving.

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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.

Blackbaud Guided Fundraising is used by institutions seeking to manage all the details behind the sophisticated, person-to-person solicitation strategies that drive fundraising results.

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

2022 Form 10-K

Blackbaud, Inc.

Marketing and Engagement

Blackbaud Luminate Online®, delivered in the cloud, helps our customers better understand their online supporters, make the right ask at the right time and raise money online.

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.

Blackbaud Online Express ™ is a simple, cloud fundraising and marketing tool designed for smaller nonprofit organizations using Blackbaud Raiser's Edge NXT.

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

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.

It allows users to share material and contribute content across an entire school community.

Blackbaud Fundraiser Performance Management™ is a multi-pronged solution that combines easy to use data-driven software for fundraisers and managers, predictive modeling insights, and high-touch strategic consulting.

Built for higher education institutions, healthcare and large nonprofit organizations, the SaaS tools increase transparency into fundraising performance, and direct fundraiser and talent manager action.

Both fundraisers and leaders benefit from the tailored consulting to address weaknesses and enhance strengths to comprehensively improve the fundraising team performance.

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

Blackbaud Guided Fundraising is used by institutions seeking to manage all the details behind the sophisticated, person-to-person solicitation strategies that drive fundraising results.

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

Blackbaud Altru® is a cloud solution that helps arts and cultural organizations consolidate admissions, membership, fundraising, merchandise, marketing and more, giving users a comprehensive view of their supporters.

By helping general admissions arts and cultural organizations gain a clear, 360-degree view of their organization, it enables them to operate more efficiently, engage and cultivate patrons and supporters, streamline external and internal communication efforts, and reduce IT costs.

Blackbaud Altru contains tools for constituent and membership management, program sales, retail sales and ticketing, volunteer management and events management.

It also has sophisticated reporting functionality and tools to manage marketing, communications and fundraising.

Financial Management

Blackbaud Financial Edge NXT® is the first-of-its-kind cloud accounting solution for nonprofits that is intuitive, fully integrated, and built the way nonprofits need it on our modern Blackbaud SKY cloud platform.

Blackbaud Financial Edge NXT is advanced technology with powerful reporting tools to help accounting teams drive transparency, stewardship, and compliance while enabling them to seamlessly manage transactions and eliminate manual processes.

It seamlessly integrates with Blackbaud Raiser's Edge NXT to simplify gift entry processing and relates information from both systems in an informative manner to eliminate redundant tasks and manual processes.

Blackbaud Financial Edge NXT provides nonprofit organizations with the means to help manage fiscal and fiduciary responsibility, enabling them to be more accountable to their constituents.

It seamlessly integrates with Raiser's Edge NXT to simplify gift entry processing and relates information from both systems in an informative manner to eliminate redundant tasks and manual processes.

Financial Edge NXT provides nonprofit organizations with the means to help manage fiscal and fiduciary responsibility, enabling them to be more accountable to their constituents.

Blackbaud Tuition Management™ benefits schools by giving administrators better access to financial data and payment services, and by giving parents more ways to remit tuition payments.

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Grant and Award Management

Blackbaud Grantmaking™ is a cloud solution built with core functions that provide comprehensive grant making capabilities, but with many additional capabilities and features, such as visual dashboards.

It has a modern user interface, is user friendly and can be highly personalized.

Blackbaud Grantmaking™ is a modern cloud solution, built on our Blackbaud SKY Platform, that supports the end-to-end grantmaking process from application through review and resolution.

Blackbaud Grantmaking provides core functionality to efficiently disperse funds, maintain compliance with due diligence requirements and measure and demonstrate impact.

The system has collaborative tools to help strengthen relationships with grantees and other community partners.

Coupled with Blackbaud Outcomes™, funders and nonprofits are empowered to collaborate around their intended outcomes and work together to achieve impact.

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

Organizational and Program Management

Blackbaud Student Information System™ makes it easy for schools to manage schedules, transcripts and GPAs.

A new Student Information System that works directly with Blackbaud Learning Management System™, Blackbaud Student Information System simplifies the process of sharing student data and academic records securely.

2022 Form 10-K

Blackbaud, Inc.

Education Solutions

Blackbaud Student Information System™ makes it easy for schools to manage schedules, transcripts and GPAs.

Blackbaud Learning Management System™ is a learning management system that makes it easy to manage, connect, and share information with students, parents, and an entire school community.

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Blackbaud Enrollment Management System helps admissions teams and prospective families manage and track their progress, from inquiry and application through acceptance and enrollment.

Blackbaud Altru contains tools for constituent and membership management, program sales, retail sales and ticketing, volunteer management and events management.

It also has sophisticated reporting functionality and tools to manage marketing, communications and fundraising.

Blackbaud Church Management™ is a comprehensive, end-to-end cloud solution to manage church operations, relationships with congregants, and essential financial management needs.

With Blackbaud Church Management, faith communities can track gifts and tithing, assimilate new members, directly communicate with congregations through multiple channels, enable members to make online and mobile contributions, manage small groups and volunteers, implement secure child check-in, conduct background checks, provide bulk tax statements, manage facilities, and more.

Faith communities can also add other Blackbaud capabilities from the new Cloud Solution for Faith Communities as their needs scale all through one integrated experience.

It allows users to share material and contribute content across an entire school community.

Social Responsibility and ESG

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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.

2021 Form 10-K

Blackbaud, Inc.

Data Intelligence

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These services either integrate with or are already integrated into our software solutions to give our customers a comprehensive view of their supporters and the market and provide information essential to making well-informed operating decisions.

2022 Form 10-K

Blackbaud, Inc.

Blackbaud’s Intelligence for Good® is our unique, comprehensive approach through which we combine artificial intelligence, analytics, big data, and expertise to deliver high-impact data intelligence.

This powerful approach enables social good organizations to transform data into insights and outcomes.

This powerful approach enables social impact organizations to transform data into insights and outcomes.

Data Intelligence is the Blackbaud portfolio of solutions and services that use data science and AI to turn customer data into valuable insights that inform decision-making and help them achieve their goals efficiently.

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Insights are extracted by combining customer data with licensed and proprietary data before leveraging advanced AI capabilities and expertise from Blackbaud’s dedicated team of data scientists.

Some examples of constituent insights include:

numerical scores that predict the likelihood of a constituent making a gift to a customer, wealth screening software that allows customers to screen their affluent constituents against publicly available records to build detailed wealth profiles and persona cluster segmentation that sorts constituents into groups based on shared traits with guidance for how to craft targeted messaging for each group.

Examples of constituent insights include:

predictive modeling that gives numerical scores indicating the likelihood and capacity of a constituent making a gift, wealth screening software that uses publicly available records to build detailed wealth profiles of constituents and persona cluster segmentation that groups constituents based on shared traits with guidance for optimizing messaging to each group.

Performance solutions help customers to assess their fundraising performance across donor segments, benchmark themselves against peer organizations and understand industry trends.

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Customer Success

Our Customer Success organization is responsible for ensuring our customers are able to achieve their desired outcomes through Blackbaud solutions, starting at onboarding and continuing through the customer lifecycle.

Our Customer Success organization is responsible for ensuring our customers achieve their desired outcomes through Blackbaud solutions, 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.

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Customer Support

For our cloud subscription solutions, access to Customer Support is included as part of the solution with no additional charge.

Customer Support provides assistance to customers using Blackbaud Solutions, helping them understand the capabilities of their subscription, including how to navigate their subscription and answering related questions for core concepts of features and functionality.

Benefits, such as priority routing or additional support channels, are continuously enhanced.

Customers enrolled in the programs enjoy fast, reliable customer support, receive regular software updates, stay up-to-date with regular communication and can leverage a unified customer portal for quick and easy access to these resources.

Customers also have around-the-clock access to support resources for mission-critical needs.

Customers also are empowered with self-help resources such as Knowledgebase articles, user guides, Blackbaud Community, our on-demand library of enablement sessions and have around-the-clock access to support resources for mission-critical needs.

2022 Form 10-K

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Professional and Managed Services

Our expert consultants, and those in our partner program, provide data conversion, implementation and customization services for each of our software solutions.

Our expert consultants, and those in our partner program, provide implementation, optimization, data conversion and customization services for our software solutions.

These services include:

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• Website design services;

• Outcome-based and prescriptive services.

In addition, we, and our delivery partners, 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, 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.

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

This includes our highly-rated Blackbaud University curriculum.

Blackbaud University provides certifications for our products and industry best practices.

These certifications serve as important catalysts for professional growth in the nonprofit industry.

Our instructors and designers have deep knowledge in the social impact arena and in the use of our solutions.

Instructor-led courses are designed to include hands-on lab exercises, as well as course materials with examples and problems to solve.

We have updated our methodology for counting customers to better represent our current offerings and our growing population of customers with contractual billing arrangements and customers that pay us through solutions usage or transaction fees, some of which are in lieu of contractual billing arrangements.

During 2021, we had nearly 40,000 customers with contractual billing arrangements and nearly 100,000 customers that paid us through transactional fees.

Through our customers and our solutions, we support millions of users and we connect millions of supporters to over 150,000 organizations and causes in over 100 countries.

Our largest single customer accounted for less than 0.2% of our 2021 consolidated revenue.

During 2022, we had more than 40,000 customers with contractual billing arrangements and nearly 100,000 customers that paid us through transactional fees.

Through our customers and our solutions, we support millions of users and we connect millions of supporters to nearly 150,000 organizations and causes in over 100 countries.

Our largest single customer accounted for approximately 0.9% of our 2022 consolidated revenue.

Sales and Marketing

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These sales and marketing professionals are primarily located throughout the United States, the U.K., Canada and Australia.

As of December 31, 2021, we had 330 direct sales employees.

As of December 31, 2022, we had approximately 290 direct sales employees.

Our marketing organization, which includes brand, digital, content, product, event and demand generation marketing and corporate communications, develops and launches multi-channel campaigns designed to create brand recognition and market awareness for our solutions and services.

Through the Blackbaud Institute, we also give back to the social good community by developing in-depth research and thought leadership content to help to drive better outcomes for their organizations with data, technology and expertise.

Through the Blackbaud Institute, we also give back to the social impact community by developing in-depth research and thought leadership content to help to drive better outcomes for their organizations with data, technology and expertise.

Our digital demand generation motion focuses on targeted account-based marketing plays, as well as intent-based programs including paid search, retargeting, social and content syndication programs.

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The market for software and related services targeting philanthropic-focused for-profit and nonprofit organizations is competitive and highly fragmented.

For certain areas of the market, entry barriers are low, as general tools for small businesses can usually be configured to manage the most basic marketing, contact management, and accounting needs of social good organizations.

In parallel, as software development evolves from a highly-complex tradecraft with nuanced understanding of architectural patterns and discrete languages, to click-to-code and drag-and-drop development with natively cloud-based infrastructure, it becomes easier for competitors to quickly spin up basic applications to solve common nonprofit problems.

However, once basic needs are met, programs unique to social good organizations like the stewardship of relationships critical to major gift fundraising, the cultivation and management of gifts and grants, the multi-level networking required for peer-to-peer activism and the sensitive data behind critical programs run by healthcare and education institutions ensure the ongoing need for highly specialized tools.

However, once basic needs are met, programs unique to social impact organizations like the stewardship of relationships and partnerships critical to major gift fundraising, community and employee education;

the cultivation and management of gifts, grants and K12 digital education sponsorship;

the multi-level networking required for peer-to-peer activism and employee engagement;

and the sensitive data and reporting behind critical programs run by and for healthcare and education institutions ensure the ongoing need for highly specialized tools.

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.

Moreover, because social impact 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 future solutions make 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 more readily require digital transformation of business processes and data-driven decision making.

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

Our competition falls into four primary categories:

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In addition, our open platform allows integration to specialized applications so the opportunity for disruption from these competitors is minimized.

• Vertical-specific solutions are offered by competitors seeking to meet the enterprise-wide needs of a specific sub-segment of the social good community.

• Vertical-specific solutions are offered by competitors seeking to meet the enterprise-wide needs of a specific sub-segment of the social impact community.

Typically, these solutions are offered by vendors who may offer either a point solution or integrated suite of products used by a vertical.

We believe we compete successfully against these competitors through a combination of our integrated suite of offerings within verticals where we compete, offering solutions with market leading robustness as well as the scale, reach, and reputation of our organization.

We believe we compete successfully against these competitors through a combination of our integrated suite of offerings and nationwide community networks within verticals where we compete, offering solutions with market leading robustness and reporting as well as the scale, reach, and reputation of our organization.

• General business software vendors , such as Microsoft, Oracle and Salesforce.com, compete with us in certain areas of our business.

While there is a growing trend toward social investment that is prompting philanthropic solutions from these general business vendors, most do not have a complete nonprofit specific focus and, therefore, do not offer or intend to offer nonprofit-specific versions for outside sales.

However, there is a subset of general business software competitors who have introduced nonprofit-specific versions of their products.

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Technology and Architecture

Blackbaud SKY forms the foundation of our technology strategy.

The SKY platform consists of several key building blocks including cloud operations, developer tools, data intelligence and core services.

The SKY Engineering System, architecture and integrated core shared services empower our developers to create highly available and easy-to-use cloud capabilities that surface to our customers as modern, effective, purpose-built functionality within most current products as well as new solutions.

The best-in-class infrastructure of SKY 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.

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

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

Blackbaud SKY also provides a toolset for customers, partners, and developers to create and deploy self-contained services within the Blackbaud SKY ecosystem.

Our technology strategy consists of several key building blocks including cloud operations, developer tools, data intelligence and core services.

We leverage multiple clouds in our architectures (including AWS and Azure) and have both single and multi-tenant solutions.

The best-in-class infrastructure enables rapid innovation with high levels of reliability, availability and security, and lets Blackbaud evolve services over time at independent paces as tech trends and tools emerge.

Blackbaud also provides a toolset for customers, partners, and developers to extend the Blackbaud SKY ecosystem.

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.

Additionally, the Blackbaud Marketplace features a curated list of applications that can help amplify an organization's impact in the Social Good sector.

Blackbaud customers can discover applications in the Marketplace that extend new capabilities to their Blackbaud solutions.

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:

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

2021 Form 10-K

Blackbaud, Inc.

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 and retains talented, competitive applicants, with 91% of employees saying the fact that Blackbaud operates in a socially responsible manner is important to them.

This differentiator not only builds stronger employee engagement, but also helps us provide a higher level of service to our customers across the social good community, with 72% of employees report that they continued to volunteer during the pandemic despite its unique challenges and one in five serve on a nonprofit board or committee—direct experience that enables them to better serve our customer base.

We benefit from an engaged and driven employee base motivated to join the Company by our work to support organizations and individuals driving social impact.

Our purpose attracts and retains talented, competitive applicants, with approximately 90% of employees saying the fact that Blackbaud operates in a socially responsible manner is important to them.

This differentiator not only builds stronger employee engagement, but also helps us provide a higher level of service to our customers, with almost 70% of employees reporting that they continued to volunteer during the pandemic despite its unique challenges and one in seven serve on a nonprofit board or committee—direct experience that enables them to better serve our customer base.

Blackbaud also attracts and promotes 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 and internal career progression.

In 2021, we expanded our workforce strategy to become permanently "Remote First" which signals Blackbaud's goal to attract talent globally.

In 2020, Blackbaud announced the launch of a new workforce strategy, allowing for employees to have the option to work from home or other geographic locations within the country to further support the overall well-being during the COVID-19 pandemic.

In 2021, we formally went Remote First as a company which expanded our pool of qualified applicants for roles and internal career progression and signals Blackbaud's goal to attract talent globally.

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.

In 2021, nearly every employee at Blackbaud participated in "the Blackbaud Way" — a training designed to connect employees with Blackbaud's mission, values and expectations for our customers and Company culture for the best experience for all.

Employee feedback on this experience was overwhelmingly positive.

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.

Every manager at Blackbaud is required to take a multi-course

2022 Form 10-K

Blackbaud, Inc.

"Engagement Labs" training designed to equip them with the practical skills to ensure their teams are highly engaged.

During 2022, all employees participated in a new, expanded Respect at Work training.

We assess and measure progress on engagement and growth opportunities at the individual level through quarterly check-ins, which focus on impact and learnings, 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 as well as "Ask Anything" sessions with senior leaders and dedicated "live" Q&A sessions in our company-wide All Hands meetings.

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

we also assess engagement on the team and company level through regular employee surveying as well as "Ask Anything" sessions with senior leaders and dedicated Q&A sessions in our company-wide All Hands meetings.

We enable employees to have opportunities for career development through on-demand and company-led trainings in our internal DevelopU platform.

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 overall 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 also seek to support the whole person, through increased benefits and focus on well-being.

Ultimately, we believe that Blackbaud is an excellent place to work because we are energized by our opportunity to fuel social impact and committed to running our business in a way that amplifies the difference we make in the world:

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

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

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:

This new leadership focus has amplified and accelerated the significant initiatives already in place at Blackbaud, including:

ongoing workshops on creating an inclusive culture;

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

affinity groups, including veterans, LGBTQ employees, women in technology, women in sales, Black employees, employees interested in sustainability and, our newest team, those employees with a disability.

and affinity groups.

We now have 14 employee-led affinity groups, including, but not limited to those that represent veterans, LGBTQ+, women in technology, women in sales, Black employees, those interested in sustainability and those with a disability.

During 2022, Blackbaud achieved carbon neutrality and committed to new, transparent ESG reporting.

Blackbaud was recognized by Newsweek as one of America's Most Responsible Companies 2023, by Quartz as one of the Best Companies for Remote Workers and was named to Forbes' list of America's Best Employers 2022.

Additional information related to our human capital strategy can be found in our 2021 Social Responsibility Report, which is available on the Corporate Social Responsibility section of our website.

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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.

2021 Form 10-K

Blackbaud, Inc.

Working Capital

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The SEC maintains an Internet site that contains these reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov .

2022 Form 10-K

Blackbaud, Inc.

Information About Our Executive Officers

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Boor 60 Executive Vice President and Chief Financial Officer

Gregoire 54 Executive Vice President and President, U.S.

McDearis 54 Executive Vice President and Chief Products Officer

Mooney 63 Executive Vice President, Strategy and Corporate Development

Benjamin 51 Executive Vice President and Chief Commercial Officer

Gregoire 55 Executive Vice President and Chief Operating Officer

McDearis 55 Executive Vice President and Chief Technology Officer

Mooney 64 Executive Vice President, Strategy and Business Development

Olson 59 Senior Vice President and General Counsel

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From May 1994 to November 2005, he served as 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.

Gianoni is a member of the Board of Directors of Teradata Corporation, a publicly traded global big data analytics company, and has been Chairman of the Board since February 2020.

Gianoni has served on several nonprofit boards across several segments, including relief organizations, hospitals and higher education.

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

Benjamin has served as our Executive Vice President and Chief Commercial Officer since July 2022.

He joined us as Executive Vice President and President, International Markets Group in April 2018.

Prior to joining us, Mr.

Benjamin was Senior Vice President and General Manager at Box, a cloud content management platform for businesses, from October 2016 to March 2022.

Prior to that, he was Vice President of Global Services at British Telecom, a multinational telecommunications holding company, from October 2007 to September 2016.

Prior to that, he was at Guardian Media Group, a mass media company owning various media operations company, where he served as Divisional Chief Operating Officer, among other leadership roles, from June 1995 to September 2007.

He holds a BA in European Business from London Metropolitan University and an MBA from The Manchester Metropolitan University.

2022 Form 10-K

Blackbaud, Inc.

Gregoire has served as our Executive Vice President and President of U.S.

Gregoire has served as our Executive Vice President and Chief Operating Officer since July 2022.

Prior to that, he was the Executive Vice President and President of U.S.

Markets since April 2021.

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Olin School of Business at Babson College.

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

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

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

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

Mooney has served as our Executive Vice President of Strategy and Business Development since April 2021.

Mooney has served as our Executive Vice President, Strategy and Business Development since April 2021.

Before that he was the Executive Vice President and President, General Markets Group since January 2010.

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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