The big news among area higher-education fundraisers last week was the $10 million gift to the College of Saint Benedict from an anonymous donor to create an endowment to fund "experiential learning" programs. That includes fellowships, service-learning and study-abroad opportunities, particularly among the growing ranks of St. Ben's students whose families can't afford those opportunities.
The news also brought a smile to Andy Reeher.
St. Benedict is a client, along with a growing list of 115-plus other colleges across the land.
Reeher LLC, is the 60-employee St. Paul firm Andy Reeher started as employee No. 1 in 2003. It started as a consulting gig with a friend, about the time Reeher started wondering how he was going to pay for college for the first of his four kids.
Reeher LLC is a developer-manager of a software platform designed to improve the efficiency and yield for university fundraisers through customized tools that track and measure effectiveness, engage prospective donors and maintain relationships with small ones who may one day grow into six- or seven-figure benefactors.
"Those are acorns that grow into trees," quipped Reeher.
Reeher, 54, left Deluxe Corp. in 2002 where he was a marketing executive. Deluxe split its paper-and-electronic financial services products businesses. He didn't see a great future in marketing paper checks.
Reeher decided to join a friend, a consultant, on an engagement with Columbia University in New York City.
A son of western Pennsylvania who earned an MBA at the University of Chicago in the 1980s, Reeher had been thinking about pursuing a doctorate and teaching college economics. Instead, he started to study the economics of college and how universities needed to engage with grateful graduates to help defray costs for the next generation.
A techie analyst
Reeher is an analytical fellow with a technology bent. The Columbia engagement succeeded, but his colleague went a different way. Reeher took on similar consulting gigs with the Stanford, MIT and a few Big Ten schools.
A company was slowly born. It has gotten traction over the last several years thanks to a scalable software platform and investment capital last year.
"We have 115 universities, some public, some private, on our platform now," Reeher said. "Some raise a half-billion a year, such as Johns Hopkins or Duke, and some raise $5 million or less a year, such as Otterbein in Ohio or Wartburg [in Iowa], or Hamline [in St. Paul], which raises less than $10 million or $11 million for annual scholarships and capital campaigns."
Reeher's fast-growing company is being noticed. It raised $2.5 million in growth capital last year, leapfrogged 400 other companies on the Inc 5000 growth-company index, and it won a Minnesota "Tekne" award from the high-tech association in the "applied analytics" category at the MHTA's November awards.
Troy Fritz, executive director of major gifts at St. John's University, a five-year Reeher client, said Reeher's analytical tools and measurements have helped the university do better, even in the growing economy and stock market of the last several years.
"It takes into consideration people's wealth and their engagement with St. John's and helps prioritize who is most likely to support the university and who we should visit," Fritz said. "We're visiting the right people so when the conditions are good, when the economy is improving or they sell a business, they are more likely to give a generous gift."
"We provide a management system that the fundraisers access via the [internet]," Reeher said. "We provide information about donor prospects, a kind of a 'customer relationship management' system, and we make predictions about whose a good prospect.
Gift officers carry a mobile device that tells them, kind of like sales managers, how they are performing against goals. "Our tools also tell them how telephone-and-letter appeals are performing, how to solicit people more effectively, who are the best prospects, where they are, their estimated capacity based on publicly data and giving history with the university."
Grows revenue to $7.5M
Reeher, which has grown revenue by more than 150 percent over three years to $7.5 million last year, gets its revenue based on a subscription fee tied to multiyear contracts.
"The price is driven by how big is the client university, how much money they raise and the scope of services we provide," Reeher said. "Whether just annual giving, major giving or volunteer fundraising. Or more."
Reeher raised $600,000 in 2008-09 from a couple individual investors and a fund to bring his modern-day platform to product. The $2.5 million last year was growth capital to help the company grow at a 30 percent annualized clip. Reeher wants to add clients from among 1,500 targeted colleges that are not yet clients.
"The goal of all software firms is to grow fast and then hit a period of tremendous profits," said Reeher, who raised growth funds last year from huge SaaS Capital. "So far, we're just focused on growth."
Blackbaud, a publicly traded company that reported revenue of more than $532 million in the first nine months of 2016, is a dominant player in the nonprofit-fundraising world. Reeher aims to be a growth machine in a college industry that's still fragmented.
"We have the capital we need to grow," Reeher said.
Neal St. Anthony has been a Star Tribune business columnist and reporter since 1984. He can be contacted at firstname.lastname@example.org.