Political Fund-Raisers Put Convio in the Spotlight
By GLEN JUSTICE - New York Times
The software maker Convio Inc. has no political action committee, no lobbyists on its books and its top executives do not write large checks to federal campaigns. But it is making a splash - in politics.
Convio makes software that helps clients set up fund-raising Web sites, create e-mail databases and process and track online donations. Earlier this year, it added Democratic presidential candidate Howard Dean, the former governor of Vermont, to a list of clients that includes Easter Seals and the American Diabetes Association.
Using an Internet-based fund-raising strategy that included Convio's software, Dr. Dean raised more than $25 million by the end of September. That made him the financial leader in the Democratic primary. His success with online fund-raising has the phones ringing at Convio's headquarters in Austin, Tex., as other politicians and nonprofit organizations seek to develop a stronger presence on the Web.
Many nonprofit groups have been expanding online communications with donors and supporters, but they typically have had to develop the software tools on their own. Convio and its competitors are addressing that need with prepackaged software.
"The customer interest in Convio is higher than it has been in the company's life," said Gene Austin, the company's chief executive. Convio has seen roughly $500,000 in new business since it started receiving publicity for its role in the Dean campaign, a company executive said. In recent months, it has added several customers, including Senator Barbara A. Mikulski, Democrat of Maryland; the Consumers Union; and the Brady Campaign to Prevent Gun Violence.
Company executives say Convio is approaching profitability after receiving about $22 million in venture capital over the last three years. Sales are estimated to reach about $7 million this year. They expect sales to nearly double next year.
Convio has also drawn litigation from Kintera Inc., a software competitor that serves the same market. Kintera, which is based in San Diego, has filed suit in the United States District Court for the Southern District of California, accusing Convio of illegally copying proprietary computer code, a charge that Convio denies.
Kintera, which has filed for an initial public offering, is used by Senator Hillary Rodham Clinton, Democrat of New York, and Gov. Arnold Schwarzenegger of California, a Republican. Other clients include the American Cancer Society, the Special Olympics and the Salvation Army.
Its chief executive, Harry E. Gruber, said that the political campaign work brought good publicity but was not a big part of the business. "There's no real significant money in politics for Web people," he said, noting that campaigns are often labor intensive and short-lived.
Mr. Austin said that the political world also did not represent a large market for his company. Though Democratic presidential candidates Joseph I. Lieberman and John Kerry have also used Convio software in their campaigns, politics accounts for about 5 percent of the company's revenues, according to Convio executives.
Still, the company has taken advantage of the similarities between the political and the nonprofit worlds, using ideas from one for the other. It recently announced that Convio software would offer the services of Meetup.com Inc., which many politicians use to organize gatherings of their supporters.
Convio was founded in 1999 by Vinay Bhagat, who began volunteering at a local public broadcasting station at the request of his wife. While answering phones, Mr. Bhagat found himself passing written messages time and again when people called in.
"A light bulb went off," he said. "I said 'Man, there has to be a better way to do this.' "
Mr. Bhagat quit his job at a software company and started doing research. While corporate software packages might be used to generate sales leads and organize customer files, he found that nonprofit groups need software to raise money, help communicate with their constituents and plan activities.
Convio rolled out its first product in July 2000. It had about a dozen customers by the end of that year, including Planned Parenthood Federation of America. By 2003, that organization's online fund-raising had increased fivefold, officials there said.
The Webmaster for the Dean campaign, Nicco Mele, said Convio's software provided Web-page content management, contributor database management and credit card processing, in one package.
"Convio gave us all those things without having to build them individually or go to several different vendors," he said.
Mr. Mele said that upgrades would be needed as the campaign and the fund-raising expands, and that the campaign would re-evaluate its software needs if Dr. Dean makes it through the primaries.
Of course, the Dean campaign's fund-raising success cannot be attributed solely to its Internet efforts, and other candidates may not get the same response online. The campaign focused early on the Internet, and it has nurtured its online community. More than 3,400 Dean supporters have used Convio software on personal Web pages to use to help raise money for the campaign.
That level of engagement has helped the campaign raise $14.8 million in the third quarter, almost double its second-quarter haul, according to PoliticalMoneyLine, which tracks campaign finances.
Some of these tactics are already used by groups like the American Diabetes Association. It allowed participants in its America's Walk for Diabetes this year to create sponsorship Web pages using Convio software to raise money. "People who participate in walk or bike events look for those features," said Rick Johnston, the association's national vice president for constituent relations.
The Convio software also allows organizations to send e-mail messages geared to a supporter's specific interests or region of the country. The sender can then track how those supporters and visitors to Web sites respond, making it easier to mobilize them for political advocacy. Mr. Johnston said that ability had greatly enhanced his organization's impact in reaching out to lawmakers. "We often get calls from Congressional offices saying 'pull off the dogs,' " he said.
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