DIGESTING AN UNPRECEDENTED YEAR OF CHANGE NONPROFIT SOFTWARE INDUSTRY UPDATE | Q4 2020

Q4 2020 Nonprofit Software Digesting an Unprecedented Year of Change

CONTRIBUTORS HIGHLIGHTS

Teak Murphy  COVID-19 substantially impacted the segment with positive, long-term implications for software Nonprofit Software providers as nonprofits seek to diversify their fundraising with a heavier focus on digital. However, Director some software providers focused more on in-person events have been hurt by shutdowns. (310) 746-5006  A combination of Black Lives Matter (BLM) and COVID-19 has advanced focus on corporate social [email protected] responsibility (CSR) and environmental, social, and corporate governance (ESG) as corporations increasingly encounter scrutiny for their position and efforts around social issues (see slide 23).  2020 transaction volume of 21 deals is a meaningful drop from recent years as private equity (PE)- backed rollups have quieted and investors struggle to find companies with meaningful revenue scale for platform acquisitions with owners mostly heads down during 2020.  There has been over $4 billion in reported transaction value since the start of 2015, though valuation data is only available for 19 of the 185 deals.  Nonprofit merger and acquisition (M&A) deals have traded at a median of 6x last-twelve-month (LTM) revenue, although it is difficult to draw conclusions with data for just ten deals.  Blackbaud (Nasdaq:BLKB), the only public company with a broad focus on the Nonprofit sector, has bounced back from its initial COVID-19 drop but remains well below pre-COVID levels while Pushpay (NZSE:PPH), focused on church management software, quickly rebounded and pushed to new highs.

www.capstoneheadwaters.com KEY TAKEAWAYS

M&A ACTIVITY

BUYER ANALYSIS

MARKET OVERVIEW & TRENDS

CAPSTONE HEADWATERS NONPROFIT SOFTWARE TEAM & DEAL EXPERIENCE NONPROFIT SOFTWARE REPORT | Q4 2020

DIGESTING 2020 – AN UNPRECEDENTED YEAR

 COVID-19 dominated the year, impacting every aspect of life for everyone around the globe. » Global economies were shaken by large scale business restrictions that continue to hamper economic recovery. » Record unemployment required drastic government action with nonprofits ramping up efforts to support needs locally and worldwide. » Public markets bounced back surprisingly quickly as money flooded into the stock market after prices initially pulled back, ending the year well above pre-COVID levels despite lingering employment issues, business struggles and massive government spending that will need to be paid back.  Social justice, driven by Black Lives Matter, captured the national spotlight. » Politicians were forced to take firm positions on social justice issues which played a key role in elections at the local, state and federal level. » Amid an increasingly powerful cancel culture, businesses quickly jumped to get supportive messaging out through ad campaigns, donations and increased internal oversight while others struggled to play defense as current and past failures received enormous public scrutiny. » Social networks struggled to manage the usage of their platforms for driving positive change as some users leveraged them to spread hate and misinformation. » The social justice momentum, driven by Me Too and Black Lives Matter movements, coupled with ease of mobilization from social networks and an increasingly politically engaged younger generation appears to have helped social justice issues reach escape velocity, forcing politicians and leaders to address issues they could previously stay quiet on and hope to fizzle out.  Natural disasters continue to disrupt the lives of millions each year. » Fires, hurricanes and snowstorms repeatedly overwhelm US cities and states, requiring support from the federal government and nonprofits. » Emergency fundraising has historically driven huge donation volume as the country rallies to support those in need, though the seemingly constant disaster relief needs risk donor fatigue as donors could become inured to disasters and withhold donations to focus on larger or more local emergency needs. 3 NONPROFIT SOFTWARE REPORT | Q4 2020

DIGESTING 2020 – IMPACT ON PHILANTHROPY AND NONPROFIT SOFTWARE

 Early data indicates that, despite the enormous economic impact of COVID-19, giving increased in 2020. » We are not surprised by the increase as historical data has shown giving holds up surprisingly well during recessions and usually spikes in times of disasters. » Giving as a percentage of GDP is expected to hit its second highest level in 15 years, behind only 2017’s heightened levels in advance of tax changes.  Despite the increase in aggregate giving, we aren’t seeing a “rising tide lifts all boats” effect. » Large nonprofits typically experienced sizable donation increases while mid-sized nonprofits saw slight boosts. » Smaller nonprofits have typically seen donations shrink and there are concerns many will not survive.  Lessons learned: » Digital capabilities were essential for survival and nonprofits with established efforts were better positioned to quickly react, effectively managing donor communications to generate donations, as galas and events were cancelled or moved virtual. • The church segment is a great example where some went dark and hoped to weather the storm while others embraced virtual engagement to maintain communication in a time of need and rallied congregants to donate to support the church as well as giving in the community, boosting their profile. » Breaking through the noise in 2020 was difficult and nonprofits with missions that aligned with healthcare, social justice and disaster relief were more likely to resonate with new donors. » Donor retention was the make-or-break metric for many nonprofits as loyal, long-time donors were more likely to continue to support organizations, even if COVID-19 restrictions limited their ability to execute on their mission, while attracting new donors became difficult when competing for wallet share against those that could quickly put dollars to work for much needed relief efforts. » Adaptation was key – while nonprofits aren’t typically the nimblest organizations, those that quickly adapted to the new environment by finding ways to digitally connect with donors and continue their missions were able to survive and often thrive.  The bottom line for software providers: » While most nonprofit software providers experienced strong growth during the year with businesses rushing to implement or increase digital initiatives, we expect increased churn in 2021 as many nonprofits fail and others naively fall back into their old fundraising ways. » Nonprofits that survived are more likely to be those that successfully embraced technology, making for strong customers moving forward, and newer nonprofits are more likely to incorporate digital efforts as part of their core strategy which will result in continued acceleration in the shift to digital giving. 4 NONPROFIT SOFTWARE REPORT | Q4 2020

A LOOK BACK AT U.S. PHILANTHROPIC GIVING

Historically, giving has held up well in the face of recession and surged following disasters  U.S. giving has increased nearly every year over the past 30 years, even in the face of recessions, with declines experienced only in 1987, 2008, and 2009. » Early datapoints indicate increased giving during 2020 driven by COVID-19, Black Lives Matter, and disaster relief despite a troubled economic landscape.  Disasters have historically spurred driven increased donations and we certainly saw companies and individuals increase giving in 2020.

» 1989, 2004-2005, and 2012 all saw double digit increases in giving on the heels of major disasters. 2014-2018 huge growth in giving 2020 COVID-19 on back of strong economy and pandemic 2004-2005 major disasters drove surge in bull market with jump in 2017 in giving (Hurricanes Katrina, Ivan, Frances, and advance of Tax Cuts and Jobs Act $500 Charley and Indian Ocean earthquake/ 2.5% tsunami) 2012 Hurricane Sandy drives strong return to Giving was flat amid $450 giving 2001 recession following tech bubble 2008-2009 drop in $400 Late 90s booming burst but remains at 2.3% economy and stock peak % of GDP giving amid Great Recession Giving remains market drives record $350 strong during giving 1980-1982 1989 – Loma Prieta recession Earthquake $300 2.1% 1986 flurry of giving Giving holds up well in advance of tax during 1990-1991 $250 law changes leading recession though falls to decline in 1987 as % of GDP GDP of %

Giving ($ in in Giving ($ billions) $200 1.9%

$150

$100 1.7%

$50

$0 1.5% 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (est) Giving Recession Giving % of GDP Sources: Candid, Giving USA, and Blackbaud 5 NONPROFIT SOFTWARE REPORT | Q4 2020

COVID-19 IMPACT ON NEAR TERM DEALMAKING

Impact on M&A  Blackbaud’s (Nasdaq:BLBK) valuation remains well below pre-COVID levels and off even further from LTM high. Without significant cash on hand and an increased focus on profitability, they’ll likely be highly selective on acquisitions as they’ll struggle to justify any dilutive transactions.  Private equity (PE) backed strategics have been less active recently on acquisitions. » With most potential targets experiencing good growth amid the increased shift to digital, acquirers will likely have to get more aggressive to get deals done.  Growth-focused private equity software investors are aggressively hunting for platform investments. » Private equity firms are attracted to nonprofit as a large vertical with attractive growth opportunities for modern solutions. » Increasing digital fundraising provides additional growth potential for transactional business models with PE already chasing payments plays. » Biggest challenge for PE has been finding opportunities with enough revenue scale with most targeting $10-20M+ in revenue and many showing preference for already profitable businesses though plenty are willing to fund losses for businesses with strong growth and unit economics (CAC, retention, etc.).

Impact on Capital Raise  Growth-focused investors are aggressively hunting for new investments. » Private equity and venture capital firms are flush with capital and aggressively looking to deploy. » Preference for ideal fit deals with higher demand for businesses growing through COVID-19 with sound unit economics (recurring revenue, retention rates, customer acquisition costs, etc.) and strong customer bases.  Valuations are at record levels for businesses that check all the boxes with growth as the primary valuation driver.  Investors are getting more creative on deal structure. » PEs previously focused on control transactions are now open to minority deals, particularly where there is a path to gaining control in the future. » Openness to novel approaches to address valuation gaps.

6 NONPROFIT SOFTWARE REPORT | Q4 2020

KEY TAKEAWAYS

MARKET SIZE NONPROFIT TRENDS M&A ACTIVITY AND VALUATIONS

 Nonprofit software represents a $10 billion total  COVID-19 impact accelerated the shift to digital  2020 transaction volume of 21 deals is a meaningful available market (TAM). fundraising and virtual events. drop from recent years as PE-backed rollups have quieted and investors struggle to find new  Blackbaud, the only public provider broadly  Black Lives Matter and COVID-19 are driving platforms with scale to acquire. targeting nonprofit software, claims less than 10% significant advances in CSR/ESG (slide 23). market penetration.  The median LTM revenue multiple of 6x for  COVID-19 disruption pushing increased adoption Nonprofit Software is above recent levels for  The industry is highly fragmented, particularly at of SaaS church software (slide 24). broader Enterprise SaaS and Vertical market. the lower end of market.  Private equity firms have driven the majority of  Blackbaud (Nasdaq:BLKB), valuation has rebounded  Much of the TAM is “greenfield” opportunity in transaction volume in the space. but remains below pre-COVID levels while PushPay SMB and developing categories/capabilities. (NZSE:PPH) has surged to 70% above its pre-COVID price.

NONPROFIT M&A OUTLOOK NOTABLE RECENT M&A TRANSACTIONS MOST ACTIVE BUYERS

 COVID-19 will have a positive, meaningful long- Buyer Target Segment EV term impact on Nonprofit Software, accelerating Association management NA adoption by several years. software Fundraising software NA  Nonprofit Software is still in the early days of consolidation with only two public companies and a CSR/ESG software $1.1B small number of PE-backed players vying for Volunteer / Event NA market share in a highly fragmented market. management

Donor management NA  We expect to see additional consolidation with software smaller players getting scooped up by larger Volunteer / Event NA strategics to add scale and fill in product gaps. management  Early PE-backed players will likely be hitting the Fundraising software NA market over the next 24 months as larger PEs are Fundraising software NA increasingly attracted to the space but struggling to find investment opportunities with enough scale. Church management NA software

Church streaming NA software

Association payment NA 7 software KEY TAKEAWAYS

M&A ACTIVITY

BUYER ANALYSIS

MARKET OVERVIEW & TRENDS

CAPSTONE HEADWATERS NONPROFIT SOFTWARE TEAM & DEAL EXPERIENCE NONPROFIT SOFTWARE REPORT | Q4 2020

M&A DEAL VOLUME

 Transaction volume of 22 deals represents a significant slowdown from recent years, with just two deals completed in Q2’20. » COVID-19 disruption slowed M&A as businesses with exposure to events/galas struggled to adjust while digital fundraising companies generally were heads down on execution as pipelines were full. » H2 saw a nice splash of activity with Benevity transacting at a $1B+ valuation and Bloomerang also trading at a strong multiple.  Beginning in 2015, Nonprofit Software saw a significant increase in M&A activity, largely driven by PE-backed players, particularly Community Brands. » Over 60% of transactions have been completed by private equity investors or PE/VC-backed strategics though activity has fallen substantially recently as PE/VC- backed businesses like Community Brands have slowed down on acquisitions and investors struggle to find opportunities for new platform investments.  Blackbaud and PushPay are the only public pure-play nonprofit software acquirers, neither of which have been very active on M&A recently, with few other public players seeking offerings tailored to nonprofits. 40 38 deals 35 deals 34 deals 35 1 9 1 30 deals 2 4 30 27 deals 5 3 9 8 25 5 4 21 deals 2 9 20 17 deals 3 1 15 1 11 9 Transactions 15 8 19 6 11 10 7 6 8 7 5 6 7 4 3 2 3 3 0 2014 2015 2016 2017 2018 2019 2020

LTM = Last Twelve Months Financial Buyer PE/VC-backed Company Private Company Public Company Community Brands Sources: Capital IQ, 451 Group and CSHW Research 9 NONPROFIT SOFTWARE REPORT | Q4 2020

REVENUE MULTIPLES

 Nonprofit M&A deals have traded at a median of 6x LTM revenue although it is difficult to draw conclusions with data for just ten deals. » M&A median revenue multiple for Nonprofit Software is above the broader SaaS & Cloud and Vertical Market median levels, though those were depressed in 2020 due to a heavy mix of low multiple struggling businesses forced into firesales as COVID-19 impacted businesses. » Blackbaud (broad nonprofit software) had an up and down year but ended the year down 30% from its pre-COVID level. » Pushpay’s (church management) stock price was cut in half amid the sell-off but more than tripled to end the year up ~100%.  Well positioned SaaS companies that check all the key boxes can command premium revenue multiples above the median. ✓Companies with revenue scale of $15-20M+ are needle movers for strategics and potential platform investments for private equity players. ✓Most aggressive valuations are placed on higher growth businesses and those that pass the “Rule of 40” (revenue growth + EBITDA margin > 40%). ✓Proven unit economics (high customer retention, high recurring revenue mix, rational customer acquisition costs relative to payback period, and lifetime value).

10x

9x

8x

7x

6x

5x 9.2x 4x

3x 6.0x

Enterprise Enterprise LTM Value / Revenue 2x 3.6x 3.0x 2.8x 1x

0x LTM = Last Twelve Months All Dates = Jan 2014 to Current Nonprofit Software SaaS & Cloud Vertical Market Blackbaud Pushpay Data as of 12/31/20 M&A - All Dates M&A - LTM M&A - LTM Source: CapitalIQ 10 NONPROFIT SOFTWARE REPORT | Q4 2020

NOTABLE M&A TRANSACTIONS – 2020

LTM Enterprise Ann. Date Buyer Target Target Description Strategic Rationale Revenue Value Multiple

Develops membership management software for small staff associations, Personify further expands its member management platform coverage with 12/25/20 NA NA AMCs, and non-profit organizations. MemberClicks’s enhancing its capabilities for small/mid-sized organizations.

Virtuous further enhances its capabilities to provide non-profits with highly 12/11/20 Develops online fundraising platform for growing nonprofits. NA NA personalized and responsive giving experiences through the acquisition.

Provides workplace giving and volunteer management SaaS that enables HG’s investment in Benevity will allow the company to accelerate growth at 12/03/20 $1.1B 8.8x users to optimize corporate giving and donation matching programs. a time when ESG is quickly rising in importance for corporations worldwide.

Provides volunteer recruitment and events management SaaS for non-profit EveryAction’s acquisition of Mobilize allows for groups to have access to 11/30/20 NA NA organizations, unions, political campaigns, and advocacy organizations. complementary online/offline organizing and events management software.

Provides donor management SaaS for non-profit organizations that enables JMI Equity’s investment in Bloomerang provides support to help accelerate 09/17/20 NA 8.0x payment processing capabilities and includes a mobile application. growth and strengthen their product offering.

Provides auction and event management SaaS for automating charity MaestroSoft’s auction and event management platform helps Arreva extend 08/12/20 NA NA auctions and fundraising for non-profit organizations. into virtual events to better serve their customers.

Develops an advanced knowledge marketing system and customer support The acquisition of Altruja by RaiseNow combines the two of the largest 07/28/20 NA NA to empower nonprofits to be at the forefront of digital transformation. European fundraising technology platforms.

Provides custom online forms that enable non-profit organizations to Qgiv continues to expand its fundraising product suite with the acquisition 04/23/20 NA NA accept donations and online payments. of Acceptiva.

Vitec’s acquisition of LJ Systems’s allows for the company to expand into the 04/22/20 Develops an application for church and school administration. NA NA church management software market.

Subsplash’s acquisition of StreamSpot helps further tap into the growing 03/24/20 Operates a digital content delivery network and provides automated NA NA content distribution SaaS for faith-based businesses and organizations. church streaming market as COVID-19 forced closures for many churches.

Provides online credit and debit card processing services for professional TA bought AffiniPay from Great Hill, extending its history of payments 02/24/20 NA NA associations, lawyers, accountants, architects, and psychologists acquisitions that include BluePay, BillDesk, and Financial Info Technologies. 11 NONPROFIT SOFTWARE REPORT | Q4 2020

NOTABLE M&A TRANSACTIONS – 2019

LTM Enterprise Ann. Date Buyer Target Target Description Strategic Rationale Revenue Value Multiple

Provides administrative management and payments SaaS for U.S. churches, Church Community Builder broadens Pushpay’s offering to include church 12/12/19 enabling member communication, records management, payments, and $88M NA management, delivering a more complete offering. other administrative capabilities.

GrowthZone’s association management software helps member-based The investment by Greenridge enables increased investment in product 11/07/19 organizations grow and retain membership, generate revenue, NA NA development and growth in its customer base. communicate with members, and streamline their day-to-day operations. Causemo will strengthen Pursuant’s analytics capabilities, delivering Causemo Inc. develops a fundraising and donor segmentation SaaS 08/14/19 customers a data platform with helpful insights and recommendations on NA NA platform which uses data science to help nonprofit organizations fundraise. how to apply those insights.

DonorTrends’ Donorlytics cloud-based tool helps nonprofit organizations The acquisition brings enhanced fundraising analytics to EveryAction’s 06/06/19 NA NA maximize donations and net revenue by providing data and analytics. customer base, delivering actionable data to improve fundraising efforts.

Qgiv provides Sphere with a vertically focused solution targeting the Qgiv develops online donation software solutions that empower 04/23/19 Nonprofit segment as Sphere seeks to grow its payment offerings via NA NA fundraising across mobile, online, and in-person kiosk fundraising. vertically focused solutions.

The consolidation of Salesforce.org within Salesforce simplifies the Salesforce.org provides cloud-based solutions based on the Salesforce 04/17/19 .org company’s go-to-market strategy and allows better incentivization of $300M NA platform for nonprofits and educational institutions. Salesforce.org employees.

Provides association management SaaS for associations, professional Qgiv provides Fullsteam with a vertically focused solution targeting the 02/22/19 societies, non-profits, and member-based organizations including CRM, association segment as Fullsteam seeks to grow its payment offerings via NA NA website content management, and business intelligence. vertically focused solutions. The merger combines Foundation Center’s database of foundations and GuideStar is the world's largest source of information on nonprofit 02/05/19 grants with GuideStar’s data on nonprofit organizations under one roof to NA NA organizations, providing insights, data services, APIs, and web-based tools. create a synergistic network providing a 360 degree view of giving.

roundCorner provides a cloud-based CRM and marketing automation The acquisition of roundCorner allows Salesforce to gain control over a 01/14/19 system for board management, major gifts, corporate and foundation NA NA partner whose strategic direction was straying from Salesforce’s. relations, membership and prospect management, and event management.

Blackbaud enhances its product offering through the addition of 01/02/19 Provides SaaS-based employee engagement and grants management $157M 7.9x solutions for employees and nonprofits. YourCause’s cloud-based CSR and employee engagement solutions.

12 NONPROFIT SOFTWARE REPORT | Q4 2020

NOTABLE M&A TRANSACTIONS – 2018

LTM Enterprise Ann. Date Buyer Target Target Description Strategic Rationale Revenue Value Multiple

Provides online payments SaaS for nonprofits, faith-based organization, The acquisition of Stewardship by GTCR-backed Paya expands its reach into 11/01/18 and educational institutions, enabling users to set up a donor-advised the Nonprofit segment, delivering access to a large market segment that is NA NA funds and manage online donations. rapidly undergoing a transition to digital donations.

Neon One provides a cloud-based nonprofit software suite for mobile Blue Star and FTV partnered to back the combination of NeonCRM and 09/13/18 fundraising application, membership software, and events management. Rallybound, pairing NeonCRM’s donor management capabilities with NA NA RallyBound provides a social fundraising platform for organizations. Rallybound’s peer-to-peer fundraising tools.

Agilon's Donor CRM provides communications and donor relations in the Agilon provides Aquiline-backed Fullsteam with an entry point into the 09/11/18 Higher Education, Health Care and Health Relief, Public Broadcasting, and Nonprofit segment, providing a strong donor management and fundraising NA NA Membership-based business markets. solution that has processed over $12 billion in donations.

Provides SaaS for donor relationship management, email campaigns, online Insight’s investment enables EveryAction to accelerate its strategy of 08/21/18 giving and donation payment transaction processing, call centers, and acquiring to broaden focus and capabilities as well as invest in technology NA NA advocacy and volunteer management and reporting. to develop more innovative products and features on top of their CRM.

Pamlico’s acquisition allows Personify to accelerate plans to create an end- Provides customer analytics and related CRM and association management 07/26/18 to-end constituent management platform as they increasingly transition to NA NA software for member-based organizations. cloud-based deployments and expand their customer footprint.

Frontstream offers credit and debit card processing SaaS and services for After some stumbles following quick growth via acquisition, Marlin enables 05/30/18 nonprofit organizations, charities, businesses, government agencies, and NA NA Frontstream to reboot as it goes to market with its new Panorama platform. educational institutions. Provides higher education fundraising SaaS to colleges and universities, Reeher strengthens Blackbaud’s fundraising capabilities and adds scale in integrating with existing donor databases and providing features for 05/01/18 the Higher Education segment, an important focus area as Blackbaud $43M 4.3x analyzing donor information and performance, predictive reporting, and continues to broaden its offering. volunteer management. Provides fundraising management and marketing automation SaaS to The acquisition helps accelerate Salsa’s strategy to organically build upon 04/13/18 nonprofits, featuring email marketing, donor management, online advocacy their engagement platform and acquire technologies that empower NA NA campaigning, SMS messaging, event registration, and reporting. nonprofits to more successfully fundraise and manage relationships.

Provides fundraising management SaaS to nonprofit organizations, SofTrek provides Togetherwork with its broadest offering in the Nonprofit 04/11/18 including donor relationship management, online giving and call center segment, complementing earlier acquisitions targeted at churches and NA NA management, and volunteer management and reporting. synagogues, fraternities and sororities, and religious camps.

Provides workplace giving and volunteer management SaaS, enabling users The deal positions Benevity to continue to capitalize on its strong 01/24/18 to optimize corporate giving, employee donation matching programs, and momentum in the corporate philanthropy segment with its workplace giving NA NA employee volunteer sign-up. and employee volunteering solutions while expanding its product breadth.

13 KEY TAKEAWAYS

M&A ACTIVITY

BUYER ANALYSIS

MARKET & TRENDS

CAPSTONE HEADWATERS NONPROFIT SOFTWARE TEAM & DEAL EXPERIENCE NONPROFIT SOFTWARE REPORT | Q4 2020

BUYER OVERVIEW – MOST ACTIVE STRATEGIC ACQUIRERS

Recent M&A History Company Comments Date Company Value ▪ Blackbaud has invested more than $640M in M&A since the start of 2014, typically averaging a deal a year. 01/02/19 YourCause, LLC $158M ‒ Blackbaud’s M&A focus has primarily focused on businesses that could expand footprint/TAM (e.g., church management and education) 05/01/18 Reeher LLC $43M and accelerate transition to the cloud. 02/01/18 Seraphim NA 06/26/17 Giving.com Limited (dba JustGiving) $121M ‒ Blackbaud has been quiet recently on M&A and, with a current focus on profitability, will likely keep M&A highly opportunistic. 05/10/17 WPG Solutions, Inc. NA 04/03/17 AcademicWorks, Inc. $50M 03/09/17 Dexterity Ventures Inc. NA 07/11/16 Attentive.ly (fka Good + Geek Inc.) $4M 02/01/16 Orange Leap, LLC NA 11/05/15 Amerigives Inc. NA 09/02/14 MicroEdge, LLC $160M 03/09/13 MyCharity Limited NA ▪ Community Brands is the umbrella holding company Insight Venture Partners created as a roll-up vehicle for the Nonprofit segment with three 03/26/19 Churchstreaming.tv NA core segments and dozens of brands. 03/19/18 Sharefaith Inc. NA ‒ Church software – division containing over 30 sub-brands covering nearly every church need. Insight purchased the church software roll- 12/11/17 501 Auctions LLC NA up Ministry Brands, previously backed by Genstar Capital and Providence Equity, in October 2016. 12/11/17 GiveSmart US Inc. NA Gesture LLC [fka Auctions By Cellular] ‒ Association and Nonprofit – division containing approximately a dozen sub-brands. Established following Insight’s purchase of 12/11/17 NA YourMembership.com in Feb’17 and quickly adding on Abila, Aptify, and NimbleUser to capture a large portion of the association 09/27/17 DonorDirect NA management segment. 08/01/17 Configio NA 04/26/17 VanDamme Assoc. (dba NimbleUser) NA ‒ Education – division of eight sub-brands focused on K-12 schools. Community Brands has a broad suite of products in the K-12 segment Abila [fka Sage Nonprofit Solutions] with over 4,000 schools on its platform, providing a significant growth opportunity in the segment. 04/07/17 NA 04/07/17 Aptify Corporation $75M ▪ Ross Crowley stepped back into the CEO role in late 2019, replacing JP Guilbault, it remains to be seen if Community Brands will return to its 02/01/17 YourMemerbership.com NA prior growth through M&A strategy. 10/31/16 Ministry Brands LLC NA ▪ Roll-up for group management and payments software, backed by Aquiline in 2015 and bought by GI Partners in 2018. 04/24/19 UnionWare Inc. NA ▪ Togetherwork has completed over a dozen acquisitions on the platform with eight in the Nonprofit segment. 03/28/19 FILE990.ORG LLC NA ‒ SofTrek and Pennington provide fundraising software while FILE990 provides for easy 990 filing. 04/11/18 SofTrek NA ‒ CircuiTree is a leader in faith-based camp management software. 10/26/17 Chaverware NA Congregation Connect ‒ Congregation Connect provides congregation management software and Chaverware delivers synagogue member management. 10/26/17 NA 08/16/17 Group Interactive Networks NA ‒ Doubleknot provides visitor, member, and fundraising services to museums, zoos, and other organizations. 06/07/17 Pennington & Company NA 11/16/16 CircuiTree NA 09/22/16 Doubleknot LLC NA

For Community Brands: Bolded transactions purchased by Insight Venture Partners directly as part of formation of Community Brands. Does not include acquisitions made prior to the formation of Community Brands.

15 NONPROFIT SOFTWARE REPORT | Q4 2020

BUYER OVERVIEW – MOST ACTIVE STRATEGIC ACQUIRERS

Recent M&A History Company Comments Date Company Value ▪ ClearCourse is a roll-up focused on software for payments and membership backed by Aquiline Capital Partners, the original investors in 08/01/19 Protech Computer Systems Limited NA Togetherwork. 07/03/19 Trillium Systems Limited NA ▪ ClearCourse has completed 15 acquisitions on the platform in about 12 months with seven in the Nonprofit segment. 06/04/19 Decisions Express Ltd NA ‒ APT, Decisions Express, MillerTech, Protech, Silverbear, and Trillium provide association management software. 05/16/19 instaGiv Ltd NA ‒ instaGiv delivers mobile fundraising and engagement tools for charities. 02/06/19 APT Solutions Ltd NA 01/16/19 Silverbear Ltd. NA 11/13/18 Miller Technology Limited NA ▪ The Pursuant Group has its roots in consulting and marketing for fundraising but has expanded its capabilities through several software 08/14/19 Causemo Inc. NA acquisitions. 03/13/19 ADVIZOR Solutions, Inc. NA ‒ 2DIALOG, Causemo, and ADVIZOR provide fundraising automation and analytics. 02/01/17 TouchPoint Software LLC NA ‒ ShareRewards provides shopping portals to raise money for nonprofits through online retail partners. 10/27/15 ShareRewards NA ‒ ToughPoint Software provides church management software. 03/10/15 2DIALOG NA ▪ Neon One was formed via the combination of NeonCRM and Rallybound, backed by Blue Star Innovation Partners and FTV Capital. 04/07/19 Arts People, Inc. NA ▪ The Blue Star team had previously executed a rapid roll-up in the sports registration space with 20 acquisitions leading to a $300M exit. 12/20/18 CiviCore NA ‒ Acquisitions have focused on building a complete software suite including CRM (NeonCRM), peer-to-peer fundraising platform 09/13/18 Rallybound NA (Rallybound), advocacy and grants management (CiviCore), and events management (Arts People). 09/13/18 NeonCRM NA ▪ Provides CSR solutions including employee giving and volunteering, grants management, and fundraising software, backed by GA and JMI. 03/28/18 Versaic NA ‒ Versaic strengthened Benevity’s grants offering and Trust CSR helped expand into Europe. 02/27/18 Trust CSR Limited NA ‒ GrantStream broadened Benevity’s offering to include grants management. 11/09/15 GrantStream Inc. NA ▪ Formed in 2010 via the combination of Voter Activation Network and NGP to create a leader in political fundraising and campaign management. 06/24/19 BSD Tools NA ▪ Launched EveryAction is 2014 to expand focus to include the broader Nonprofit segment. 06/06/19 DonorTrends, Inc. NA ‒ BSD Tools provides online political fundraising and advocacy solutions. 05/08/19 We Also Walk Dogs (dba ActionKit) NA ‒ EveryAction expanded its nonprofit offering through acquisitions of ActionKit (email marketing) and DonorTrends (donor analytics). ▪ Ruffalo Noel Levitz provides enrollment and fundraising software to the Higher Education segment. 11/20/19 QuadWrangle, Inc. NA ‒ QuadWrangle provides alumni donor engagement and analytics. 01/30/19 Funderful SIA NA ‒ Funderful provides alumni fundraising software. 01/14/14 ScaleFunder, Inc. NA ‒ ScaleFunder enables .

16 NONPROFIT SOFTWARE REPORT | Q4 2020

BUYER OVERVIEW – ADDITIONAL NOTABLE ACQUIRERS

Recent M&A History Company Comments Date Company Value ▪ Frontstream grew quickly organically and through acquisitions but had some stumbles; it was purchased by Marlin Equity from Arsenal in 2018 07/27/15 BiddingForGood, Inc. NA and has retooled its product with a more integrated offering but hasn’t returned to M&A since the change in ownership. 02/28/14 TRUiST, Inc. NA ‒ BiddingForGood adds auction and event management capabilities to Frontstream’s offering. ‒ TRUiST brings corporate employee giving and volunteering solutions. 08/09/13 Artez Interactive, Inc. NA ‒ Artez provided web, mobile, and social fundraising solutions for nonprofits while GiftWorks deliveres donor management software. 08/09/13 GiftWorks, Inc. NA

▪ ACS Technologies provides church and school ministry management software. 04/15/16 Helpmate Technology Solutions, LLC NA ‒ Helpmate provides church management software and Mersoft delivers education software for faith-based ministries and schools. 06/29/15 Mersoft (Solomon LMS) NA

▪ Rebranded after DonorCommunity (online fundraising and event management) acquired Telosa Software to add donor management. 08/12/20 MaestroSoft Inc. NA ‒ MaestroSoft expands Arreva’s capabilities into virtual events and auctions. 05/20/19 Heritage Designs LLC NA ‒ Heritage Designs provides donor management and fundraising software. 05/18/17 Telosa Software, Inc. NA

▪ GoFundMe disrupted the Nonprofit segment, delivering a platform for crowdfunding which provides direct giving to individuals or causes. 04/03/18 YouCaring.com $55M ‒ To date, its M&A activity has targeted the crowdfunding space with additions of YouCaring.com and . 01/10/17 CrowdRise, Inc. NA

▪ Provides association management software, backed by BlueArc, Five Elms, and Level Equity in 2017. 11/02/17 WebLink International Inc. NA ‒ ePly offers event registration and WebLink offers association management software. 05/26/17 ePly Services Inc. NA

▪ Network for Good delivers an integrated platform for fundraising and donor management, backed by Camden Partners and Boathouse Capital. 04/14/16 DonorPath Inc. NA ‒ GiveCorps strengthened NFG’s online fundraising while DonorPath brought digital fundraising training and coaching capabilities. 05/20/14 GiveLink LLC (dba GiveCorps) NA

▪ Personify delivers CRM and communications solutions to associations and nonprofits. 09/26/17 Wild Apricot Inc. NA ‒ Wild Apricot expanded Personify’s reach to smaller associations while Small World added community and social networking capabilities. 11/09/15 Small World Labs Inc. NA

▪ Pushpay provides member engagement, donor development, and digital giving solutions for churches. 12/12/19 Church Community Builder LLC $88M ‒ Church Community Builder broadened Pushpay’s offering to include church management solutions, delivering a more complete offering for its customers. 11/23/16 Bluebridge Digital (Church app bus) $3M ▪ The acquisitions of roundCorner and Salesforce.org caused some stirs as folks thought Salesforce could be shifting strategies in the Nonprofit 04/17/19 Salesforce.org NA segment but roundCorner seems to be more about regaining control over a partner whose strategic direction was straying from Salesforce’s and the acquisition of Salesforce.org simplifies go-to-market and .org employees’ incentives. 01/14/19 roundCorner, Inc. NA

▪ Salsa Labs provides advocacy, donor management, and online fundraising software, backed by Accel-KKR. 11/05/15 TowerCare (dba DonorPro) NA ‒ Salsa Labs expanded its focus from advocacy into online fundraising via givezooks and added donor management via DonorPro. 10/31/14 givezooks!, Inc. NA 17 NONPROFIT SOFTWARE REPORT | Q4 2020

ACTIVE INVESTORS IN NONPROFIT SAAS SEGMENT

INVESTOR RELEVANT PORTFOLIO COMPANIES INVESTOR RELEVANT PORTFOLIO COMPANIES INVESTOR RELEVANT PORTFOLIO COMPANIES

18 Indicates exited investment KEY TAKEAWAYS

M&A ACTIVITY

BUYER ANALYSIS

MARKET OVERVIEW & TRENDS

CAPSTONE HEADWATERS NONPROFIT SOFTWARE TEAM & DEAL EXPERIENCE NONPROFIT SOFTWARE REPORT | Q4 2020

$10 BILLION MARKET

 The Nonprofit Software segment represents an enormous market opportunity that is not well-served by horizontal players.  The Market remains highly fragmented with the largest public company, Blackbaud, claiming under 10% penetration.  There is a significant “greenfield” opportunity as many nonprofits are adopting dedicated software solutions for the first time while new categories and capabilities emerge in the industry. Fundraising & Relationship Management $3B+ Market Fundraising Peer-to-peer fundraising Donor management Donor communications

Financial & Grants Management Payment Services $1.5B+ Market $3B+ Market Fund accounting Credit card processing Grants management ACH processing Scholarship management Payable management

Social Responsibility Organizational & Program Management

$1B+ Market $1.5B+ Market Employee giving Advocacy $ Employee volunteering Organization Management Case Management

Source: Blackbaud Investor Report 20 NONPROFIT SOFTWARE REPORT | Q4 2020

PHILANTHROPY – HIGHLY FRAGMENTED MARKET FOR $450B IN ANNUAL DONATIONS

 Fragmented by software providers with Blackbaud, the largest provider,  Fragmented by size with vast majority of nonprofits under $1M budget claiming less than 10% of market share. (IRS data), representing an enormous long-tail opportunity.

 Fragmented by source of funds with 78% coming from individuals/bequest.  Fragmented by mission with varying needs depending on focus. Corporations 5% Foundations 17% Human Religion Education Services Foundations Health 29% 14% 12% 12% 9%

Individuals Society Environment 78% Benefit International Arts/Culture /Animals Individuals 8% 6% 5% 3% 2%

Source: Giving USA 2020 Report (Individuals includes Bequest) Source: Giving USA 2020 Report 21 NONPROFIT SOFTWARE REPORT | Q4 2020

PRODUCT MAP

Nonprofit segment has key product feature requirements that are not well served by broader, horizontal software providers.  Associations, charities, religious, and political nonprofits share a lot of the same key features and organizations are increasingly seeking modern solutions, providing a threat to legacy providers. » Transaction processing, whether dues or donations, are increasingly moving to digital platforms. » Constituent management through an integrated database enhances member and donor relationships. » Analytics are rising in importance as modern solutions enable organizations to better understand and serve their constituents. » Associations tend to be slower moving in adopting new solutions and hold solutions for long periods.  Foundations and financial institutions tend to be slow moving and change solutions less frequently. » Primary focus for product selection is driven by financial management capabilities. • Managing grants, reconciling contributions and distributions, and managing funds are high priority focus areas. » Constituent management usually through dedicated portals with email and marketing automation much less important.  Crowdfunding has quickly captured a large portion of donations as people are more inclined to give to recipients they are personally connected to and the model provides quick, easy impulse giving. 22 NONPROFIT SOFTWARE REPORT | Q4 2020

MARKET TREND – CSR + ESG

 Corporations are rapidly evolving their approach to corporate social responsibility (CSR) and environmental, social and corporate governance (ESG) with 2020 catapulting slow burning trends to the top of corporate priority lists.  A look back at CSR: » Previously, a well-crafted mission statement, a few folks managing some corporate grants, perhaps a cumbersome donation matching offering and not dumping chemicals into the local water supply would place a company in the upper echelon of corporations. » In recent years, CSR began to move up the priority list, getting C-suite attention with philanthropic efforts more prominently displayed on company websites and shared with employees, customers, investors, and other stake holders with many investors incorporating ESG initiatives in their investment philosophy. » Starting 2020, most companies had realized: • Employees expect more than a paycheck from their employers with initiatives around philanthropy/volunteering, community/global impact, and fostering a culture that aligns with employee values as important considerations for employment that enhance job satisfaction, retention, and productivity. • Cancel culture can quickly shine a light on any misstep, causing enormous harm with more companies proactively taking steps to ensure ESG considerations at all organizational levels, though many companies were slower to embrace wide ranging initiatives to truly change company culture. • Companies with CSR/ESG at their core can thrive and even outperform their peers as newer companies with a purpose-driven approach resonated with customers, employees, and investors with consumers showing a willingness to pay a premium for companies with strong CSR/ESG and products that support philanthropic endeavors.  Where we stand today: » As COVID-19 disrupted every aspect of our lives, companies quickly shifted gears toward pushing messaging of good deeds and unity as commercials largely touted social good. » The Black Lives Matter movement similarly prompted many companies to tout their initiatives around diversity and social justice while others scrambled to pull together programs or play damage control. » Over 2,500 B-corporations in less than 15 years and 8,500 companies are taking the 1% Pledge in the past half dozen years.  Capstone sees 2020’s quick one-two combination of COVID-19 and Black Lives Matter resulting in companies speeding up CSR and ESG initiatives by several years as it is clear a reactive strategy to social issues will not suffice in our current environment as employees, customers, and shareholders demand more of the companies they support. 23 NONPROFIT SOFTWARE REPORT | Q4 2020

MARKET TREND – CHURCH, SYNAGOGUE & MOSQUE SOFTWARE

 COVID-19 instantly impacted religious gatherings as all were forced to cease in-person services with a shift to digital donations essential for survival. » Forward thinking churches had previously adopted digital donation solutions to provide congregants an alternative form of giving with the added benefit of autopay ensuring donations even if congregants missed a service. » A large number of churches, particularly smaller ones, had not yet adopted digital donations, leaving them scrambling to implement solutions and drive congregant adoption.  SaaS management software rises in importance as users are unable to come into the office. » Day-to-day church management benefits from the increased flexibility of multiple users working remotely and COVID-19 will drive adoption of modern solutions delivering improved management for a large number of institutions. » Larger churches generally have dedicated staff that are more tech-savvy while smaller churches often rely on a changing set of volunteers, making ease of use a priority.  Digital fundraising and volunteering immediately arose as an important need for organizations looking to rally support for those impacted in their community and beyond. » Without weekly services as a platform to raise money in support of specific causes and rally volunteers, many institutions were caught flat-footed as they attempted to provide aid in a time of great need.  Virtual services and digital communications became important offerings, allowing leaders to remain connected to followers and provide guidance and encouragement in a universally difficult time. » More content focused institutions with advanced capabilities may have already been offering virtual services, but that is certainly the minority, it will be interesting to see if more institutions adopt virtual services as a way to expand their reach.

24 NONPROFIT SOFTWARE REPORT | Q4 2020

MARKET TREND – INVASION OF PRIVATE EQUITY

 PE firms are attracted to the niche market which is not well served by horizontal software leaders due to specific product needs. » Only two pure-play public software companies.  Highly fragmented market provides roll-up opportunities to gain scale. » Lack of clear leaders with deep brand awareness enables aggressive acquirers to consolidate multiple smaller businesses to gain benefits of scale without lack of “name brand” positioning that could otherwise hinder growth potential. » Combining businesses with complementary product offerings enables cross-selling, which brings a lower customer acquisition cost (CAC) for upsell compared to new customer wins and delivers customers a better integrated experience. » Early PE entrants often had to dip below their traditional check sizes for initial platform investments due to a lack of opportunities with sufficient scale. » Ministry Brands/Community Brands is by far the largest scale roll-up in the Nonprofit Software space, having completed over 25 acquisitions.  Large payments processing opportunity: » As donations, dues, and grants increasingly move digital there is an enormous opportunity to capture processing fees on the $400B flowing annually to these organizations » Many PE investors have active roll-up strategies in the payments space and are looking at vertical market software solutions that are processing high payments volume as a way to grow those businesses  Significant greenfield opportunity: » Many smaller nonprofits are adopting purpose-built solutions for the first time, seeking digital payments and improved donor management. » Developing segments like donor-advised funds and CSR have many companies in need of their first product and are seeking modern solutions to help support growth.  Capstone is increasingly seeing interest from larger private equity buyers attracted to the segment looking to invest $100M+. » Very few independent companies exist with enough scale to warrant $100M+ equity checks. » We expect to see a wave of earlier investments coming to market in the next 24 months that could attract strong valuations for well positioned businesses from large PE firms attracted to the segment and eager to put capital to work.

25 NONPROFIT SOFTWARE REPORT | Q4 2020

MARKET TREND – THE DIGITAL TRANSFORMATION

 Online presence and digital marketing: Ice Bucket Challenge » Smaller nonprofits are increasingly establishing a digital presence and leveraging a variety of tools and analytics to better target and retain donors, although a large portion still lack any digital presence. • Leverage email, SMS, and social media for outreach and communications. • Utilize websites and videos as a means of storytelling to drive awareness and share outcomes with viral potential.  Digital fundraising: » Online giving represents less than 10% of dollar volume but experiencing double digit growth.

» Mobile giving is experiencing triple digit growth in recent years, as donors increasingly consume content on mobile devices In 2014 the Ice Bucket while savvy nonprofits adopt tools to simplify giving. Challenge went viral, quickly » Text to give has gained popularity as a great way to capture impulse giving. becoming an international phenomenon with millions » Subscription giving is growing, driven by digital giving adoption and consumer’s increasing comfort with subscription services, sharing videos and raising with nonprofits leveraging tools to drive more donors to subscriptions in an effort to reduce churn. $115M in just a couple months for ALS Association which had  Peer-to-peer: raised less than $25M in total » Social networks, email, and text messaging provide increased connections for users while new software tools are helping funding the prior year. nonprofits leverage their donors’ networks to increase donations. » Individuals are more likely to donate when the request comes from a trusted friend or family member. » Facebook has exploded onto the scene, announcing last year that users raised more than $300 million for nonprofits in birthday donations on the platform.  Crowdfunding is generating billions in annual charitable giving. » Crowdfunding has created an entirely new category of digital giving, though donations are often directly to individuals, not nonprofits. » Simplifies giving with easy-to-use interfaces and frictionless payments. » Demonstrates donor’s desire to see funds go directly to the people and issues they care about with clear use of funds and a meaningful contribution to a goal. » However, there are concerns over lack of tax deductibility for direct donations to individuals and lack of oversight over use of funds. Sources: Nonprofits Source, Facebook 26 NONPROFIT SOFTWARE REPORT | Q4 2020

MARKET TREND – THE RISE OF THE DAF

 Donor Advised Funds (DAFs) were originally created in the 1930s but have more recently taken off in popularity. » DAFs now account for over 12% of giving with assets held in DAFs reaching $121 billion in 2018, nearly tripling from $45 billion in 2012. » Popularity of DAFs has primarily been driven by tax advantages, simplicity, and reduced expenses for foundations. » Financial institutions are pushing DAFs to high-net-worth clients due to the tax benefits. • Big motivation for financial institutions is the benefit of capturing more assets under management. • Increasingly looking to extend DAFs from a tool for the wealthy down to the average individual as a means to centralize giving and provide flexibility on timing of contributions and distributions to charities.

 The 2018 Tax Cuts and Jobs Act eliminated the tax benefit of giving for many Americans as 90% of tax payers now take the standard deduction. » Changes may have already had an impact as individual giving decreased 1.1% in 2018 while giving by foundations and corporations were up over 5%. » DAFs can be utilized to aggregate contributions for tax purposes into a single year when deduction can be utilized while the distributions to nonprofits are spread over time.

 Corporate DAFs for employees could provide a new market opportunity that delivers significant benefits to employer and employee. » Companies can provide each employee with a set amount of funds they can direct as a part of their benefits package. • Enhances employee satisfaction, raises awareness of CSR, and provides employees a dedicated fund to utilize for giving. • Company can capture the tax benefit of donations when an individual employee taking standard deduction often would not. » DAFs simplify gift-matching of employee donations when companies match contributions through a DAF, reducing administrative burden and ensuring donation dollars meet corporate giving criteria (e.g., every dollar an employee puts into their corporate DAF account is matched by the company). » If properly structured, employees may be able to forgo salary with money directed to a DAF to effectively capture tax benefits otherwise lost if the employee takes a standard deduction. » Corporation gets credit for employee giving as all donations come from the corporate DAF, boosting CSR efforts and community perception. » Employees can participate in corporate grant making, providing easier to find donation opportunities they care about and enhancing the employer and employee relationship through partnering on philanthropy. Sources: Giving USA, National Philanthropic Trust and Tax Policy Center 27 NONPROFIT SOFTWARE REPORT | Q4 2020

MARKET TREND – ANALYTICS

 Adopting modern CRM capabilities to better understand and serve their constituents. » Consumer expectations and preferences are quickly shifting with nonprofits and associations needing to adjust their approaches to keep up with trends. » User experience meaningfully impacts constituents’ impression of nonprofits and associations. » Nonprofits and associations are increasingly viewing their donors or members as customers and striving to provide heightened levels of satisfaction.  Leveraging internal data: » Better serve donors and members through deeper understanding based on communication preferences, historical involvement, etc. on an individual basis. » Improved tracking of relationship history to better manage customers, enabling alternative outreach campaigns that are more individually tailored for success. » Return on investment (ROI) based on campaign type, donor demographics, etc. can help organizations better understand donor acquisition costs compared to lifetime value and drive substantially improved returns ultimately determining whether a nonprofit can survive in a very crowded segment with high failure rates. » Identify key evangelists and empower peer-to-peer outreach for strong ROI.  Communications: » Transitions from snail mail to digital communications via e-mail, texting, and social networks provide more paths for communications. » Varying preferences amongst constituents for how they are contacted based on content (e.g. outreach, updates, thank you notes) further complicates managing effective communications. » Savvy nonprofits and associations adopt tools providing flexibility to connect with constituents in ways that drive the strongest relationship with each individual.  3rd party data: » Helps provide a more holistic view of constituents, allowing for improved targeting and management. » Identify donors that are good candidates for significant donation increases based on other giving or recent life events. » Improved ability to identify higher ROI targets to invest additional resources and time.

28 KEY TAKEAWAYS

M&A ACTIVITY

BUYER ANALYSIS

MARKET OVERVIEW & TRENDS

CAPSTONE HEADWATERS NONPROFIT SOFTWARE TEAM & DEAL EXPERIENCE NONPROFIT SOFTWARE REPORT | Q4 2020

3 CAPSTONE CARES 0  A good start… » Offsite volunteerism – “Leave everywhere we go better off for us having been there.” » Ad hoc donations and employee gift matching.  2020 launched Capstone Cares initiative: » Formed ten-member committee, two from our tech group. » Established to identify a cause to support and an organization to partner with on a multi-year effort to provide a meaningful advancement of their mission. » Mission Statement: Capstone Headwaters believes that providing a solid foundation for kids is the most important investment we can make. For this reason, we are pleased to introduce you to our signature community initiative “Capstone Cares.”  Nonprofit Software deal team’s commitment to our clients. » 1% of success fee donated in client’s name to a local charity of client’s choosing.

Selected Charity 1% of Fee 1% of Success Fee Capstone Headwaters

30 NONPROFIT SOFTWARE REPORT | Q4 2020

3 SELECT NONPROFIT SOFTWARE DEAL EXPERIENCE – CYBERGRANTS 1

 CyberGrants is the leading provider of software-as-a-service (SaaS) solutions supporting employee engagement, grant management and corporate social responsibility. CyberGrants has delivered fully-hosted web-based SaaS solutions to many of the largest companies and foundations in the world, including 40% of the Fortune 100.

 Through its integrated grants management and employee engagement suite, CyberGrants connects companies, foundations, employees and not-for-profits to support the delivery of more than $2.5 has received growth equity from billion of charitable giving annually.

 Capstone Headwaters ran a highly competitive and efficient process that resulted in 13 Indications of Interest and 7 Letters of Intent. The valuation increased by 50% from the original target range resulting in premium multiples. With 4 best and final offers at similar valuation, the founder was able to choose the buyer that would enable him to quickly exit the business while ensuring his key people were in good hands. Waud Capital Partners had a strong CEO in residence who was a great

The undersigned acted as exclusive financial advisor to fit for the CyberGrants culture. CyberGrants, Inc.

“Capstone Headwater’s deep knowledge of the SaaS space, high- touch guidance and uncanny ability to instantly understand my company and the highly specialized market it serves paved the way for a great outcome. Their skill in positioning my company in the most attractive light, bringing all of the right potential partners to the table and managing a competitive process resulted in a valuation that far exceeded my expectations and Sean Flanagan allowed us to attract the ideal partner in Waud Capital Partners.” Chief Executive Officer

31 NONPROFIT SOFTWARE REPORT | Q4 2020

3 SELECT NONPROFIT SOFTWARE DEAL EXPERIENCE – NETWORK FOR GOOD 2

 Network for Good provides small nonprofits and partners with an innovative, all-in-one fundraising and donor management platform along with support services needed to execute modern, results- oriented fundraising campaigns. According to the 2018 Giving USA report, Americans gave $410 billion to some of the 1.5 million U.S.-based nonprofits last year, most of whom rely on a patchwork of outdated methods and software solutions to attract, solicit, accept, and track these donations.

 Through its platform Network for Good has helped process over $2.5 billion and boasts a roster of has received growth investment from more than 6,500 nonprofit customers and partners such as Facebook and Google leveraging their platform to power consumer giving.

 Capstone Headwaters ran a highly competitive and efficient process, exploring options for full sale, majority recap and growth investment, that resulted in 10 Indications of Interest from strategic software providers and financial investors. Network for Good ultimately decided on Boathouse Capital for growth equity to support their continued high growth and further cultivate their

The undersigned acted as exclusive financial advisor to leadership position. Network for Good, Inc.

"We chose Capstone Headwaters because they know our industry and they are top ranked for middle market M&A. Both of those proved to be key to our collective success, but what ended up really differentiating them was their dedication and availability from the top of their team to the bottom, their clear, comfortable communication style and their deal structuring experience.” Bill Strathman Chief Executive Officer

32 NONPROFIT SOFTWARE REPORT | Q4 2020

3 SENIOR NONPROFIT SOFTWARE COVERAGE TEAM 3 Capstone Headwaters has organized a highly skilled transaction team with deep industry expertise, close relationships with market leaders, and extensive execution experience

Teak Murphy David Michaels John Snead Director, Nonprofit Software Head of TMT Head of International TMT  Teak has over 15 years of  David brings 28 years of  John Snead is responsible for experience assisting technology investment banking experience managing Capstone’s Central companies on mergers, in technology M&A and European investment banking acquisitions, IPOs, and capital financing activities raises  Previously, he founded  Previously, he founded  Prior experience includes SagePoint Advisors and was a Grenport Limited, was SagePoint Advisors, Co-Founder, Partner, and Managing Director in Kroll’s Montgomery & Co., Cowen, and Managing Director at corporate finance group, was a Enterprise Partners Venture Montgomery & Co. Director in Arthur Andersen’s Corporate Finance Practice and Capital  BS, Engineering, from University held positions at KPMG and  BS, Finance, from University of of Michigan Morgan Grenfell Southern California  MBA, Finance, from UCLA  BS, Accounting, from University of Wolverhampton  MBA, from University of Birmingham

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