What changed in this filing

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Item 1. Business

2024-02-21 compared with 2023-02-24 · 163 added, 143 removed, 280 unchanged (52% of the section changed)

Description of Business

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

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.

We are the leading software provider exclusively dedicated to powering social impact.

Serving the nonprofit and education sectors, companies committed to social responsibility and individual change makers, our essential software is built to accelerate impact in fundraising, nonprofit financial management, digital giving, grantmaking, corporate social responsibility and education management.

Blackbaud brings over 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 (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 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.

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.

Millions of people across more than 100 countries connect, give, learn and engage through Blackbaud platforms.

During 2023, we had nearly 100,000 customers that paid Blackbaud through transactional fees and more than 40,000 customers with contractual billing arrangements.

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 much more.

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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.

There are millions of organizations globally focused on social impact including nonprofits, foundations, education institutions and healthcare organizations.

In the corporate sector, demonstrating positive social impact has become a business imperative.

Countless individuals also engage in social impact 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

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The nonprofit industry faces particular operational challenges

Nonprofit organizations, education institutions, healthcare organizations and houses of worship must efficiently:

Nonprofit organizations — and any other entity that includes fundraising as a revenue source, including education institutions, healthcare organizations and houses of worship — must efficiently:

• Solicit funds and build relationships with major and institutional donors;

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

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

2023 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.

Because of these challenges, we believe nonprofits, education institutions, healthcare organizations and houses of worship can benefit from software applications and services specifically designed to serve their particular needs and workflows to grow revenue, work effectively and accomplish their missions.

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Our key strategies for achieving this objective are described below.

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, 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.

Our TAM now stands at over $20 billion, and we remain active in the evaluation of opportunities to further expand our addressable market through acquisitions and internal product development.

Lead with World Class Teams and Operations

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.

Execute on our Five Key Operational Initiatives

In early 2023, we outlined five key operational initiatives targeted to drive innovation, bookings growth, revenue expansion and lower costs.

During 2023, we have executed on these key initiatives.

Product Innovation and Delivery

Product is core at Blackbaud, and we strive to bring increased value to our customers with improved and innovative capabilities.

We have recently announced or released a number of product enhancements as well as new solutions that enable our customers to better deliver on their missions.

Some examples include:

• Optimized Online Donation Capabilities:

New online donation capabilities that fully integrate with Blackbaud’s payment processing and CRM software and enable customers to raise more money while reducing processing costs.

We recently began an early adopter program for the new donation capabilities with a small sample of RE NXT customers across charity, education, and arts and cultural organizations.

We expect to make them generally available in the first half of 2024.

• Prospect Insights Pro for Raiser’s Edge NXT®:

New add-on capability within Raiser’s Edge NXT® that gives fundraisers access to AI-driven insights to support planned and major gift fundraising

• Impact Edge TM :

A first-of-its-kind AI-powered, social impact reporting and storytelling solution for corporate social responsibility (CSR) and social impact teams of all sizes.

This new solution is currently in an early adopter program with our planned full roll out in the second half of 2024.

• JustGiving Storywriter:

With new generative AI capabilities, fundraisers on JustGiving are able to quickly and easily create personal stories to share with their networks.

Company research has shown that JustGiving pages that include a clear and personal story raise approximately 65% more than those that do not.

• Good Move TM :

New development transformed the Good Move activity-tracking mobile app into a powerful mobile participant center for Blackbaud TeamRaiser® peer-to-peer fundraising events.

The new expansive feature for Blackbaud TeamRaiser® became generally available in the U.S.

and Canada in March 2023.

2023 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 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.

• Intelligence for Good®:

In summer 2023, we launched next generation Intelligence for Good® strategy with an extensive agenda of initiatives and investments targeted at making artificial intelligence more accessible, powerful and responsible across the social impact sector

Bookings Growth and Acceleration

We maintain a keen focus on accelerating bookings growth by signing new logos as well as upselling and cross-selling our existing customer base.

Our sales team is split between prospect account executives dedicated to prospecting for new clients and customer account executives who focus on selling additional products to current customers.

Given the breadth of our product portfolio, this “land and expand” model has proven successful for us over time.

As previously disclosed, there can be volatility quarter-to-quarter on bookings.

Transactional Revenue Optimization and Expansion

Transactional revenue, which is about one-third of total revenue, is comprised of four primary components:

donation processing (~55% of total transactional revenue);

consumer giving (~20%);

tuition management (~20%);

and event-based usage (~5%).

The diversity of the underlying transaction volumes from these four sources has resulted in consistent transactional recurring revenue growth in the mid-to-high single digits over the past several years.

Strong momentum in consumer giving and tuition management, rate increases on Blackbaud Merchant Services, and increased donations tied to global events drove continued solid transactional recurring revenue growth in 2023.

Going forward we will continue to implement additional payments solutions optimization to drive enhanced donor experience.

Modernized Approach to Pricing and Multi-Year Contracts

Last summer, we put in place an updated pricing policy primarily for our social sector customers that directly reflects the value we provide to them, is in-line with the broader market and reflects the inflationary pressures that all businesses are facing.

In November 2022, we started notifying customers with a March 2023 contract renewal that we would be making important contract changes.

First, we are offering 3-year contract renewal terms as our standard, replacing one-year renewal terms.

This process was already being implemented outside of the pricing changes.

Second, we are implementing a more significant rate increase on the 1-year renewal option versus the 3-year renewal option.

And third, the 3-year renewal option includes embedded annual rate increases.

Our 3-year renewal options did not historically include annual rate increases.

We have now completed the 2023 renewal cohort, which represented approximately 35% of the total contractual revenue eligible for this program.

Approximately another 30% of the renewable base is up for renewal in 2024, another 25% in 2025, and the remaining 10% in the beginning of 2026.

The close day-to-day management of renewals, the mix of 3-year and 1-year contracts, and the impact of pricing are progressing well, and we expect more impact from the compounding effect of these rate increases over time as we layer in future year contract renewals and annual rate increases.

Additionally, the adoption of 3-year renewals as a standard, with more customers opting for this option than we originally expected, are expected to have an added benefit of higher retention which provides greater revenue assurance and predictability.

Looking even further ahead, the cycle starts fresh in 2026 as the 2023 signed contracts will begin to renew.

We expect that this will be a sustainable and meaningful revenue growth stream for us.

Keen Attention to Cost Management

Cost management initiatives already completed drove a significant improvement in profitability during 2023.

These initiatives included:

• A reduction in headcount from approximately 3,600 in the third quarter of 2022 to approximately 3,000 as of December 31, 2023

• Continued IT consolidation as we migrate customers from legacy private data centers to leading public cloud service providers.

We closed four legacy data centers during 2022 and two in 2023.

• Renegotiated key vendor contracts including Microsoft Azure and AWS

• Reduced our real estate footprint as part of the shift to a remote first workforce

2023 Form 10-K

Blackbaud, Inc.

Going forward, our goal is to run the business at about this headcount level for the foreseeable future, while continuing to drive efficiencies in other areas of the business.

Delight Our Customers

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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, extending our solutions through open APIs and developing new solutions and services designed to help our customers be more effective and achieve their missions.

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

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

In 2021, we formally adopted a "Remote First" model as a company, which supports Blackbaud's goal to attract top 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 impact community.

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

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

We also participate in and convene 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 impact community.

The Blackbaud Institute is a research lab that leverages Blackbaud's unique data resources, along with original research, to drive insight that accelerates the impact of the social impact community.

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.

The Blackbaud Social Good Startup Program is 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 build the essential software that frees customers to focus on what matters most:

We build software for our customers' essential business operations to free them 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, education management, ticketing, social responsibility, payment services and analytics.

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 is possible for anyone dedicated to purpose-driven work.

We augment our software 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 nonprofits and foundations, educational institutions, individual change makers and corporate social impact programs built specifically for fundraising and relationship management, marketing and engagement, financial management, grant and award management, education management, ticketing, social responsibility, payment services and analytics.

2023 Form 10-K

Blackbaud, Inc.

Our specific solutions and services include:

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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.

Powering thousands of major 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.

2022 Form 10-K

Blackbaud, Inc.

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.

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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.

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

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.

2023 Form 10-K

Blackbaud, Inc.

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 Platform.

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.

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.

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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.

Blackbaud Billing Management™ makes it easy for school administrators to manage tuition and billing processes and for parents to manage their payments to the school.

It gives families flexible payment options, provides the school visibility into payments and billing with metrics for supporting cash flow, one view of financial performance, 24/7 bill access on all devices, and removes manual processes from admissions to finance and merchant services.

Grant and Award Management

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

2022 Form 10-K

Blackbaud, Inc.

Education Solutions

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

2023 Form 10-K

Blackbaud, Inc.

Social Responsibility and ESG

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

EVERFI is a SaaS software platform building digital education content that addresses the Missing Learning Layer and equips organizations to deliver Impact-as-a-Service™ in their communities, empowering individuals with the tools and skills to drive ecosystems of change and inspire lifelong success.

EVERFI offers programs on important societal topics such as financial literacy, health and well-being, social and emotional learning, STEM and digital literacy, among many others.

EVERFI also delivers adult-focused content in the HR and compliance training space for companies and institutions.

Through the platform and program offerings, EVERFI is able to yield anonymized learner data to reflect the true impact of their educational offerings.

EVERFI® from Blackbaud ® delivers educational content that transforms what is possible for learners while enabling companies to achieve their social impact and business goals.

EVERFI’s robust library of courses connect students with real-world skills to navigate life’s most important challenges, from financial capability to mental wellness — all made possible through the generous support of brands that believe in the lasting results of community investment.

Trusted by educators at over 25,000 K-12 schools, EVERFI’s curriculum reaches over 7 million students a year.

Thousands of the world’s leading brands have engaged with their communities and achieved their social impact goals by sponsoring EVERFI’s trusted courses to empower students with the knowledge they need to succeed in life.

Payment Services

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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 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.

Blackbaud’s Intelligence for Good® is our comprehensive strategy to deliver artificial intelligence that is accessible, powerful and responsible.

Our artificial intelligence capabilities enable social impact organizations to transform data into insights and outcomes.

Blackbaud's data intelligence solutions and services use data science and AI to turn customer data into valuable insights that inform decision-making and help them achieve their goals efficiently.

Blackbaud's data intelligence portfolio consists of three key outcome areas:

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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.

predictive modeling that indicates 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.

2023 Form 10-K

Blackbaud, Inc.

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

These solutions provide a holistic view of donor performance that goes beyond standard campaign-based reporting, with KPIs related to acquisition, upgrading, retention and reactivation.

These solutions provide a holistic view of donor performance that goes beyond standard campaign-based reporting, with key performance indicators related to acquisition, upgrading, retention and reactivation.

Customers use our performance solutions to identify areas of weakness and opportunities for improvement, track the donor impact of strategic initiatives, understand and respond to industry trends, set realistic benchmarks and fundraising goals and maintain a consistent reporting methodology to assess growth over time.

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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.

Our customer success resources work to proactively communicate to drive overall satisfaction and retention of our customer's business.

Our customer success resources work to proactively communicate to drive overall satisfaction and retention of our customers' business.

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.

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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

Blackbaud, Inc.

Professional and Managed Services

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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 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.

2023 Form 10-K

Blackbaud, Inc.

Millions of people across more than 100 countries connect, give, learn and engage through Blackbaud platforms.

During 2023, we had nearly 100,000 customers that paid Blackbaud through transactional fees and more than 40,000 customers with contractual billing arrangements.

Our largest single customer accounted for less than 1% of our 2023 consolidated revenue.

Sales and Marketing

Most of our solutions and related services are sold through our direct sales force.

Our direct sales force is complemented by a team of business development representatives responsible for sales lead generation and qualification.

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

Our direct sales force is complemented by a team of sales development representatives responsible for sales lead generation and qualification.

In addition, lead generation is supplemented by our customer success organization via employee-generated sales leads.

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

As of December 31, 2023, we had approximately 250 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 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.

We supplement the digital motion with select participation at virtual and in-person third-party trade shows, technical conferences, and technology seminars.

We supplement the digital motion with our annual user conference, bbcon ® (which was held in November 2023 in-person for the first time since the pandemic), select participation at virtual and in-person third-party trade shows, technical conferences, and technology seminars.

We also target publication of our thought leadership content and position our subject matter experts in industry journals and publications.

We have a large base of loyal customers and strategic partners that provide references and recommendations often featured in our advertising and promotional activities.

2022 Form 10-K

Blackbaud, Inc.

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

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

2023 Form 10-K

Blackbaud, Inc.

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

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• 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.

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

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We believe we compete well in this market through a combination of positive brand recognition among all three of these groups and the combination of our consumer- and organization-oriented tools relative to those of the competition.

2022 Form 10-K

Blackbaud, Inc.

Less frequently, we compete with providers of traditional, non-automated fundraising service providers, including parties providing services in support of traditional direct mail or email campaigns, special events fundraising, peer-to-peer, telemarketing and personal solicitations.

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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.

2023 Form 10-K

Blackbaud, Inc.

Intellectual Property and Other Proprietary Rights

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Human Capital Resources

As of December 31, 2022, we had over 3,200 employees, none of whom are represented by unions or are covered by collective bargaining agreements.

As of December 31, 2023, we had approximately 3,000 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 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.

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

This differentiator not only builds strong employee engagement, but also helps us provide a higher level of service to our customers.

With over 70% of employees volunteering with nonprofits annually and one in seven serving on a nonprofit board or committee, our direct experience enables our teams 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 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.

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

In 2021, we formally rolled out our Remote First Work-strategy as a company which expanded our pool of qualified applicants for roles and internal career progression and enabled Blackbaud's goal to attract and develop 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.

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 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 increased benefits and focus on well-being.

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 focused on impact and learnings, as well as through 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 surveys as well as "Ask Anything" sessions with senior leaders and dedicated Q&A sessions during our global, company-wide Connect and Engage meetings.

We enable employees to have opportunities for career development through on-demand and company-led trainings in our Learning Management System platform:

Our compensation framework is designed so that employees are compensated equitably and competitively, including through base salary, variable pay, equity award opportunities and comprehensive benefit offerings.

We also seek to support the whole person, through increased benefits and focus on overall 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 govern our business ethically and 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 (STEM) 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 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;

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.

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

In 2023, we brought together the talent acquisition team with Inclusion and Corporate Social Responsibility teams under one leader within People and Culture.

The company believes that it is essential to foster inclusion from the moment a candidate considers Blackbaud.

This alignment continues our focus to amplify and accelerate the significant initiatives already in place at Blackbaud, including:

a focus on allyship, mentoring and affinity groups.

We have 11 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.

2023 Form 10-K

Blackbaud, Inc.

We believe we have a responsibility to act in the fight against climate change—it is both the right thing to do and necessary to ensure the future stability of our business and customers.

For these reasons, Blackbaud takes proactive measures to protect the environment, both in our internal sustainable business practices and our external engagements.

As we did in 2021 and 2022, in 2023 we plan to achieve carbon neutrality across our business operations.

We are committed to our continued efforts to reduce our emissions footprint and provide transparent annual social responsibility and sustainability reporting.

Blackbaud was recognized by Newsweek as one of America's Most Responsible Companies 2024, Built In's Best Places to Work, Forbes' list of America's Best Employers 2023 and won Governance Team of the Year for small to mid-cap companies in Governance Intelligence's annual Corporate Governance Awards.

Additional information related to our human capital strategy can be found in our 2022 ESG Report which is available on the Corporate Social Responsibility section of our website.

Information contained on or accessible through our websites is not incorporated into, and does not form a part of, this Annual Report or any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.

6 unchanged sentences

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

1 unchanged sentence

Name Age Title

Gianoni 62 President and Chief Executive Officer

Gianoni 63 Chief Executive Officer, President and Vice Chairman of the Board

Boor 61 Executive Vice President and Chief Financial Officer

2 unchanged sentences

McDearis 56 Executive Vice President and Chief Technology Officer

Mooney 64 Executive Vice President, Strategy and Business Development

Olson 60 Senior Vice President and General Counsel

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

2023 Form 10-K

Blackbaud, Inc.

Gianoni joined us as Chief Executive Officer and President in January 2014 and was appointed Vice Chairman of the Board in January 2024.

Prior to joining us, he served as Executive Vice President and Group President, Financial Institutions at Fiserv, Inc., a global technology provider serving the financial services industry, from January 2010 to December 2013.

4 unchanged sentences

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

He currently is a board member of the International African American Museum.

He currently is a board member of the International African American Museum and a member of the President's Advisory Group at the Medical University of South Carolina.

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.

13 unchanged sentences

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 Chief Operating Officer since July 2022.

8 unchanged sentences

Olin School of Business at Babson College.

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

McDearis has served as our Executive Vice President and Chief Technology Officer since October 2016 and is responsible for the company’s global product and technology portfolio, including cybersecurity.

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

5 unchanged sentences

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 also served on the Board of Directors of the Technology Association of Georgia 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, Strategy and Business Development since April 2021.

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

He joined us in July 2008 as our Chief Commercial Officer.

Before joining Blackbaud, Mr.

Mooney was a senior executive at Travelport GDS from August 2007 to May 2008.

As Chief Commercial Officer of Travelport GDS, one of the world's largest providers of information services and transaction processing to the travel industry, Mr.

Mooney was responsible for global sales, marketing, training, service and support activities.

Prior to that he was Chief Financial Officer for Worldspan from March 2005 until it was acquired by Travelport in August 2007.

Mooney has also held key executive positions in the telecommunications industry and he served as a member of the Board of Directors of Level 3 Communications, Inc., a publicly traded global managed network services company, from October 2014 to November 2017.

Prior to that he served on the Board of Directors of tw telecom from August 2005 until it was acquired by Level 3 in October 2014.

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

2023 Form 10-K

Blackbaud, Inc.

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

Olson is responsible for Blackbaud's legal and real estate activities.

Olson is responsible for Blackbaud's legal activities.

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

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.

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

Prior to joining Alcatel-Lucent, Mr.

Olson was employed in legal positions with MCI, Inc., a global business and residential communications company, from September 1996 to July 1997, and Unisys Corporation, a global information technology company, from July 1992 to September 1996.

Olson is a member of the MUSC (Medical University of South Carolina) Hollings Cancer Center Advisory Board and is on the board of the Charleston Symphony and Charleston Jazz.

Olson is a member of the MUSC (Medical University of South Carolina) Hollings Cancer Center Advisory Board and is on the board of Charleston Jazz.

He holds a BS from Georgetown University, a JD from Dickinson School of Law and an MBA from Seton Hall University.

2022 Form 10-K

Blackbaud, Inc.

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