Capstone Headwaters Reports: COVID-19 Expected to Accelerate Nonprofit Software Adoption

August 31, 2020

Boston, MA – Capstone Headwaters released its Q2 2020 Nonprofit Software update today, reporting that fundraising software companies have experienced increased year-over-year digital giving and increased pipeline activity. COVID-19 has substantially impacted the segment with positive long-term implications as nonprofits seek to diversify their fundraising with a heavier focus on digital channels. Initial indications from our conversations show success with virtual events, raising possibilities of a shift to more virtual events in the future which seem to be delivering higher return on investment (ROI) given the high cost and effort for in person events. As a result, Capstone expects COVID-19 will have a positive, meaningful long-term impact on the Nonprofit Software industry, accelerating adoption by several years.

Last twelve-month (LTM) transaction volume of 20 deals is a substantial drop from recent years as acquisitions by private equity (PE) portfolio companies have quieted and investors have struggled to find companies with meaningful revenue scale for platform acquisitions. The Nonprofit Software industry is still in the early days of consolidation with only two public companies and a small number of PE-backed players vying for market share in a highly fragmented market. Early PE-backed players will likely be hitting the market over the next 24 months as larger private equity groups are increasingly attracted to the space but struggling to find investment opportunities with enough scale.

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Capstone Headwaters is one of the largest and most active independent investment banking firms in the United States. The firm has a rich 17+ year history of achieving extraordinary results for middle market entrepreneurs, business owners, investors, and creditors. CSHW offers a fully integrated suite of corporate finance services, including merger & acquisition, debt & equity private placement, ESOP advisory, corporate restructuring, valuation & fairness opinion, and financial advisory services. Headquartered in Boston and Denver, Capstone Headwaters has over 170 professionals across 17 offices in the U.S. and an international presence including 450 professionals in 40 countries. With 16 dedicated industry groups, the firm delivers sector-specific expertise through large, cross-functional teams on a global basis. CSHW has been recognized as one of the top investment banks to work for, the top 3 most referred firms, and has been named “Middle Market Firm of the Year” for the past 9 consecutive years. For more information, visit

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Teak Murphy