The NonProfit Times - March 1, 2009 - (Page 15) AGENCIES PAUL CLOLERY AND MARK HRYWNA Spring Clean-Up Barton-Cotton bankruptcy leaves a mess onprofits,particularly Catholicrelated charities, are scrambling to find answers and complete campaigns already in production after the collapse of direct response marketing firm Barton-Cotton. The 80-year-old direct marketing firm, based in Columbia, Md., filed for Chapter 7 bankruptcy liquidation on Feb. 9 in United States Bankruptcy Court for the District of Maryland. The bankruptcy filing has 48 pages of 423 employees, firms and charities listed as being owed money by Barton-Cotton, Inc., including money owed to the other bankrupt Barton-Cotton companies.The amounts owed to each were not listed in the filings, although sources told The NonProfit Times the numbers are in the millions of dollars. Sister Georgette Lehmuth, president and CEO of Hempstead, N.Y.-based National Catholic Development Conference (NCDC), said a significant number of her members used Barton-Cotton, particularly for church mass cards and memorial cards. She estimated receiving 30 calls from member nonprofits, either in various stages of campaigns with the firm or just a past client. “Our members are calling and we’re trying to figure out how to best help them.We just need more information ourselves,” Lehmuth said. “We feel badly, of course. Barton-Cotton was a founding corporate member of our organization, so N they’d been with us 40 years,” she said. The National Audubon Society in New York City had been a licensor with BartonCotton for almost two decades and recently concluded a direct response holiday card program for 2008, said Sandy Pinto, director of licensing. The organization had not yet been officially notified of the bankruptcy, she said, but was confident there would be time to find a new firm for next year’s card program.“It’s been a significant licensing program for us,” Pinto said, adding that the firm had been “a terrific licensing partner.” Denver-based American Humane Association also concluded a holiday card program last season. Barton-Cotton had lost at least two large clients during the past six months: a three-year contract with Juvenile Diabetes Research Foundation (JDRF) in New York City expired in June and another with Veterans of Foreign Wars (VFW) expired in January. “There were no indications that they would be closed,” said Jerry Newberry,director of communications for VFW, which was listed as a creditor.The Kansas City, Mo.-based nonprofit sought Requests for Proposals (RFP) this past June, as it typically does in advance of an expiring contract. Barton-Cotton participated in the process but there was no indication that a bankruptcy was on the horizon, Newberry said. He added that VFW is still negotiating with a couple of different agencies.The decision to not renew the contract, which ‘‘ started in 2005, was based on price and performance, he said. Mothers Against Drunk Driving (MADD) in Irving,Texas,also listed as a creditor,used Barton-Cotton for a greeting card package this past fall to its complete donor file (about 550,000),according to Nick Ellinger, vice president of strategic outreach. “I think that all of our mailings around that time suffered because of the economy, kind of the nature of the beast. But I would say the mailing was one that we were considering doing again but hadn’t decided on that,” Ellinger said, describing the performance as “fair.” Our members are calling and we’re trying to figure out how to best help them. --Sister Georgette Lehmuth MPower Renamed Orange Leap, Launches Two New Products Power, a vendor of constituent management and fundraising open source software, was renamed Orange Leap (www.orangeleap.com).“We decided to rebrand with a new name, logo and tagline that better capture the essence and spirit of our company and what we contribute to the nonprofit community,” said Randy McCabe, founder and CEO of Orange Leap. Last year the Dallas, Texas-based firm began making its software available as an open source solution, which means it can be downloaded for free and the code is available to the user.There are fees for consulting services and support, if needed. The company chose Orange Leap as its new name because both words together describe something bright, active, vibrant and friendly and reflect the organization’s mission and culture,McCabe said.The color M orange has been the longstanding corporate color. The company’s new tagline is “Where Nonprofits Rise and Shine.” Orange Leap is expected to launch two new products this month. One is a Javabased, SaaS – or on-demand – constituent management application. It allows organizations to automate key business processes and rules directly in the application, eliminating workarounds and increasing efficiency. The other product, called The Guru, is an open solution for analyzing data.Virtually any staff member, regardless of technical expertise, will be able to use the wizard-based, browser-accessible tool to create and share custom reports pulled from data in any an organization’s various databases, McCabe said.The Guru is database-agnostic and can generate reports based on pulling data from multiple vendors’ database products, he said. NPT The MADD mailing contract had a “norisk” clause. “We do have a contract with them (Barton-Cotton) that was in that vein, that we were trying to guarantee a net and wanted to get that settled with them, so yes we did have that type of contract,” Ellinger said.“It didn’t meet the net that was in the contract but mailings around that time as you know were suffering all the way around. I would say it depends on what you compare it too.” Sources told The NonProfit Times that a “no-risk contract” to a major client that went badly was the card that caused the house to tumble.The sources said that the contract had guaranteed specific returns and that the program had done poorly. Estimated losses on that one contract ranged from $200,000 to $2 million. The NPT could not confirm it was the MADD contract guarantee. An official of one Barton-Cotton client, who asked not to be identified, said that his organization was told that it would not be receiving royalty payments on Christmas cards sold as part of a holiday fundraising promotion.The official did not know the amount owed. Calls to Barton-Cotton were not returned. Messages left on the cell phones of Barton-Cotton executives were likewise not returned. One executive reached via cell phone asked to be called back and then did not respond to subsequent calls.Staff at Barton-Cotton had recently acknowledged the firm had been up for sale for several months and that there were no takers. Two days after the bankruptcy filing, a group called “BC Alums”was created on the online professional network LinkedIn and within a day had more than a dozen members, mostly former Barton-Cotton senior executives. Messages for executives and former employees left there were either were unreturned or they declined comment by presstime. The firm filed liquidation paperwork on four companies: Barton-Cotton Inc., Barton-Cotton Sales Corp., Barton-Cotton Holding Corp., and Barton-Cotton Real Estate Inc. The law firm DLA Piper in Baltimore is the court-appointed trustee in the case. Venable LLP, also in Baltimore, filed the petitions for Barton-Cotton. The NonProfit Times broke the story regarding the bankruptcy on Feb. 9 on nptimes.com after obtaining a copy of a letter sent to at least some of Barton-Cotton’s creditors by the Bank of Montreal in Chicago. The letter notifies the recipient that the bank is “a secured creditor of the Debtor,” which it identifies as Barton-Cotton, Incorporated. The bank identifies itself as “Agent.” The bankruptcy filing for Barton-Cotton Inc. reported assets of less than $50 million and liabilities between $50 million and $100 million. Barton-Cotton Holding Corp. and Barton-Cotton Sales Corp. both reported less than $50,000 in assets and liabilities of from $50 million to $100 million. Barton-Cotton Real Estate Inc. reported assets of less than $10 million and liabilities between $100 million and $500 million. At least 83 percent of Barton-Cotton is owned by American Capital Strategies, a company publicly-traded on NASDAQ under the symbol ACAS. The firm paid $144 million for Barton-Cotton in April 2006, announcing the deal on May 2. In filings with the Securities and Exchange Commission, American Capital reported $62.7 million in debt tied to Barton-Cotton. It estimated the firm’s fair value at $12.4 million.A spokesperson for the firm did not return telephone calls or email messages. NPT For all the latest jobs, go to www.nptjobs.com or call THE NONPROFIT TIMES at 973-401-0202 x206 www.nptimes.com 15 MARCH 1, 2009 THE NONPROFIT TIMES http://www.nptimes.com http://www.orangeleap.com http://www.orangeleap.com http://www.nptjobs.com http://www.nptimes.com
Table of Contents Feed for the Digital Edition of The NonProfit Times - March 1, 2009 The NonProfit Times - March 1, 2009 Buyers' Choice Where's All the Money? Stocks of Vendors Tracking Worse Than Indexes Contents Calendar Page 4 AFP Conference Map Spring Clean-Up NPT Fundraising Guide Financial Paradox Business Briefs NPT Jobs Resource Directory Advertiser Index The NonProfit Times - March 1, 2009 The NonProfit Times - March 1, 2009 - Stocks of Vendors Tracking Worse Than Indexes (Page 1) The NonProfit Times - March 1, 2009 - Stocks of Vendors Tracking Worse Than Indexes (Page 2) The NonProfit Times - March 1, 2009 - Calendar (Page 3) The NonProfit Times - March 1, 2009 - Page 4 (Page 4) The NonProfit Times - March 1, 2009 - Page 4 (Page 5) The NonProfit Times - March 1, 2009 - Page 4 (Page 6) The NonProfit Times - March 1, 2009 - Page 4 (Page 7) The NonProfit Times - March 1, 2009 - Page 4 (Page 8) The NonProfit Times - March 1, 2009 - Page 4 (Page 9) The NonProfit Times - March 1, 2009 - Page 4 (Page 10) The NonProfit Times - March 1, 2009 - AFP Conference Map (Page 11) The NonProfit Times - March 1, 2009 - AFP Conference Map (Page 12) The NonProfit Times - March 1, 2009 - AFP Conference Map (Page 13) The NonProfit Times - March 1, 2009 - AFP Conference Map (Page 14) The NonProfit Times - March 1, 2009 - Spring Clean-Up (Page 15) The NonProfit Times - March 1, 2009 - NPT Fundraising Guide (Page 16) The NonProfit Times - March 1, 2009 - Financial Paradox (Page 17) The NonProfit Times - March 1, 2009 - Business Briefs (Page 18) The NonProfit Times - March 1, 2009 - NPT Jobs (Page 19) The NonProfit Times - March 1, 2009 - Advertiser Index (Page 20) The NonProfit Times - March 1, 2009 - Advertiser Index (Page 21) The NonProfit Times - March 1, 2009 - Advertiser Index (Page 22) The NonProfit Times - March 1, 2009 - Advertiser Index (Page 23) The NonProfit Times - March 1, 2009 - Advertiser Index (Page 24)
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