Tech Firm Grapples With Growing Pains

When we first met CharityEngine a year ago, there were a dozen employees and lots of empty desks in its Tysons HQ. We visited again this month and found a much larger company and more gray hairs on the management team. (Good thing all shades of gray are in.)

CharityEngine creates software for nonprofits so they can manage tasks like events management, online fundraising and email marketing. The company, started by Phil Schmitz while a student at the University of Maryland, has grown its clients from four to 14 in the last year, including wooing Special Olympics-Maryland and Toys for Tots. Head count has more than doubled to 26, filling up all but one empty desk. And the amount of money raised by nonprofits through its platform jumped from $386M to $714M in the last year. It took the company five years to get to $386M.

But with growth has come some pain. (Phil gets comfort from bringing in his pooch every Friday.) He worked seven days a week last year, minus two weekends that he took off. As the bootstrapped company has grown, some employees weren’t ready for the next level, so the company had to let go of six last year and replace them with people who had more high-growth experience. It was especially difficult for the leadership given how small the team was and that the six helped the company get to where it is today.

One of the new hires was CTO Steve Titus. Phil built the technology with one other person, who was let go last year, and is now working on transferring some of the technical responsibilities. Steve says he joined the company in September because it’s not beholden to outside investors, it’s been profitable for awhile, and he saw it as a chance to wear lots of hats and build something from the ground up. The challenge is putting processes in place to take the company to another level, a step where many companies fail, says Steve. 

President Hossein Noshirvani, a co-founder of Motionsoft, says CharityEngine has plans to bring on 30 new clients. It’s already talking to prospectives like the ALS Association, Share Our Strength and Goodwill. But questions linger: As head count grows, will the company still be able bring in breakfast every Monday and lunch every Friday (above)? How will Phil’s role as a technical CEO who wrote all the product code evolve? Stay tuned as we check in with CharityEngine every few months.