Unlocking Venture without Capital: UncommonGood

Welcome to the Unlocking Venture without Capital series, where I explore social impact startups highlighting their products, industry dynamics, and competition. You can read more about the inspiration behind the series here.

Please note that the views and opinions expressed in this blog post are solely mine, and I have not been sponsored or affiliated with the company in question nor do they represent the views of any employer with whom the author may be affiliated. By highlighting the market opportunity, product overview, and competitive landscape of each company, I hope to highlight exciting products, companies, and industries worth learning about.

📜 Overview

UncommonGood is a cloud-based, all-inclusive platform for nonprofits to manage their operations, marketing, and fundraising efforts.

💻 Product Offering

UncommonGood’s four features are fundraising, marketing, operations, and design.

• Fundraising: peer-to-peer fundraising enabling donors and groups to raise money for the nonprofit, sweepstakes facilitation, donor tools to assist with documentation and recurring donations, and a widget creation tool for easy access on external websites

• Marketing: creating branded emailing campaigns to keep donors engaged and custom profile pages for users to visit

• Operations: donor database management, calendar and checklist assistance to streamline operations and team management

• Design: brand creation and management tools, media and graphics creation tools, and a media library for asset storage

Their product offering combines many of the necessary activities of a nonprofit into one platform. Their focus on usability and clear messaging is evident in how they market both the product features and the value those features would bring.

📈 Market Opportunity

TAM - ✅

According to the National Center for Charitable Statistics, there were approximately 1.5M nonprofits in the US. If we take UncommonGood’s pricing model of $150/mo, that gives us $1800/year/nonprofit.

1.5M nonprofits x $1800/year/nonprofit = $2.7B 

This yields a bottoms-up TAM of greater than $1B.

Industry CAGR - ❌

According to MarketWatch, the estimated CAGR of the global software market for the next 5 years is 7.07%, which falls below NYU’s estimated total market CAGR over the next 5 years of ~14%. It is worth noting that this is the global CAGR, and according to Mordor Intelligence, the region that will likely experience the greatest growth is North America. This may mean that the CAGR of the US for the nonprofit software market is higher than the global average.

Market structure - ✅

According to Mordor Intelligence, the nonprofit software industry is highly fragmented. Major players in the space include Bloomerang, Salesforce, Microsoft, Intuit, and SAP SE.

🏁 Competitive Landscape

Shortlist of direct competitors

• Bloomerang — cloud-based donor management system that helps nonprofits improve their donor retention and fundraising efforts, offering a user-friendly platform that includes features such as email marketing, reporting, and analytics

• DonorPerfect — fundraising and donor management software that helps nonprofits streamline their operations and improve their fundraising efforts with a variety of features, such as event management, email marketing, and donation processing

• Salesforce — cloud-based CRM software that offers solutions for nonprofits including features such as fundraising and donor management, program management, and volunteer management

Competitive advantage

UncommonGood's all-in-one platform combining fundraising, marketing, design, and management provides a comprehensive solution that can replace multiple standalone software products, which may give it a competitive advantage. Additionally, UncommonGood's emphasis on affordability and accessibility for nonprofits may differentiate it from some of the larger, more established players in the market. However, as a relatively new player in the market, UncommonGood will need to effectively market its solution and demonstrate its value proposition to gain market share.

👋🏽 My Personal Take

• The industry they operate in is a challenge — low operating budgets for startups restrict the potential growth in ACV (average contract value) with their customers. However, they currently offer very low-cost competitive pricing, so they may be well-positioned to disrupt the market.

• Although saving users time, there may be challenges with integration and data migration from other preexisting software and systems. This is where larger behemoths like Salesforce and Microsoft would have the advantage. Exploring integrations may ease customer’s worries about disrupting their current workflows as well.

• The number of modalities and diversity in the product features demonstrate a strong understanding of the customer base and nonprofit management responsibilities. It will be interesting to see if the convenience of combining all this software into one place outweighs the advantage of using more specialized software.

Disclaimer: The content provided in this newsletter is for informational purposes only and should not be construed as professional investment advice. Any investment decisions made based on the information presented in this newsletter are at the sole discretion and responsibility of the reader. The author and publisher of this newsletter do not make any representations as to the accuracy or completeness of the information provided, and expressly disclaim any and all liability for any losses or damages arising out of or in connection with the use or reliance on any information contained herein. The views expressed in this newsletter are those of the author alone and do not represent the views of any employer with whom the author may be affiliated. It is recommended that readers seek professional advice before making any investment decisions.