Over a recent three-year period, the nonprofit Latin American Youth Center devoted $500,000 to revamp how the organization uses software to track its efforts. The new software, developed by Software Solutions of Middle River, enabled the organization to gain deeper insights into how it operates and highlight its work to donors.
As a result, the Washington organization, which helps more than 4,000 youths in the district and its Maryland suburbs, earned $1 million in new funding, an official with the nonprofit said.
The Latin American Youth Center and numerous other nonprofits across the country are starting to invest in performance management software with a human-services twist. Scores are turning to Social Solutions, a fast-growing company designing software that helps nonprofits document their efforts and results in great detail.
"I couldn't imagine doing the job without it," said Isaac Castillo, the youth center's director of learning and evaluation. The same data that Castillo at one time tabulated with paper and pencil - and would take weeks to compile - can now be done with a few mouse clicks, he said.
Social Solutions is a for-profit company that has focused almost exclusively on pleasing its nonprofit clients. Historically, the nonprofit sector has lagged in adopting sophisticated electronic records management systems, largely because of high costs typically associated with custom software products. Nonprofits and philanthropic institutions have also struggled over how best to measure their efforts, spending and outcomes.
"The big thing that is happening is this move to outcome-based funding," said Sean Stannard-Stockton, chief executive officer of Tactical Philanthropy Advisors, a California firm that provides services to high-net-worth donors. "The idea of saying that when you fund a nonprofit, it's not so much you're trying to support them, but you're trying to support their ability to create outcomes."
For their efforts, Social Solutions - which uses the Web to deploy their software cheaply and allows their clients to customize their programs - has been well-rewarded in recent years with steady growth. The company was founded in 2000 by three men - Steve Butz, Adrian Bordone and Vince Griffith - who previously worked in the human services sector helping at-risk youth.
The privately held company doesn't release revenue and profit figures. But since 2005, revenue has grown nearly eight-fold, according to Matt Schubert, Social Solutions' chief executive officer. Some large clients include several United Way chapters across the country and the Annie E. Casey Foundation, based in Baltimore.
When Schubert joined the company in early 2005, he was its 12th employee. By this year, the company had 90 employees and was outgrowing its 7,000-square-foot office in Baltimore's Emerging Technology Center, an incubator for small technology businesses in Canton.
In February, the company received an infusion of $6.5 million in investment capital to help their growth. In September, Social Solutions moved to a new 18,000-square-foot office park in Middle River.
Schubert said the company expects to hire 30 to 40 employees - from sales staff to computer programmers - over the next year.
The company makes money by charging clients a monthly subscription rate that depends on an organization's annual revenue in order to use the software and host their data on its servers. In addition to nonprofits, programs run by local governments, such as an after-school program in Hartford, Conn., are starting to adopt Social Solutions' software.
Schubert said what is driving Social Solutions' growth is a recognition by nonprofits and local governments that they can use the software to better track their organizations' efforts and produce detailed reports that demonstrate their effectiveness to donors and government officials.
Social Solutions has dubbed its software approach "efforts to outcomes."
"It's helpful for organizations to be able to tell their story of the results they're obtaining," Schubert said. "In a difficult economy, funding is more and more difficult to generate."