NPOs play an indispensable role in improving lives and communities around the world, whether supporting the vulnerable and needy, caring for victims of natural disasters, advocating for change or fostering the arts and sciences. The past decade has seen a substantial heightening of awareness and involvement in the nonprofit sector. NPOs are increasingly active in a wide range of areas, including social issues, the environment, animal welfare, health and human services, religion, education, politics and professional and trade associations.

In 2006, approximately 1.5 million NPOs in the United States reported over $1.6 trillion in aggregate revenue according to the Internal Revenue Service, representing 12.2% of the U.S. gross domestic product. More than 83,000 NPOs reported 2006 revenue of $1 million or more according to the Internal Revenue Service. NPOs typically receive revenue from charitable giving, government funding, product sales and for-fee services, such as fees paid to hospitals and universities. Estimated total charitable giving in the United States in 2006 was $295 billion, according to Giving USA Foundation in its \"Annual Report on Philanthropy for the Year 2006.\"

Central to an NPO\'s success in advancing its mission is its ability to communicate, manage relationships and garner support from a wide variety of individual constituents including donors, activists, volunteers and alumni.

The Internet is enabling a fundamental shift in the ways NPOs engage constituents, raise funds and mobilize advocates. For example, the ePhilanthropy Foundation estimates that total online giving in the United States increased 51% from 2005 to 2006, driven by significant increases in online giving for both small and large NPOs and the unprecedented use of the Internet by individuals to make donations. Despite this increase, online giving is just emerging, totaling only $6.9 billion in the United States in 2006 according to the ePhilanthropy Foundation.

The Company’s Constituent360 platform serves as the platform for all modules and captures, builds and houses profiles of constituents. Constituent360 allows NPOs to gain insight into online constituent behavior by tracking key online activities, including online donations, purchases, page visits, event registrations, surveys and certain advocacy activities.

The platform provides query and reporting tools to enable clients to retrieve and analyze this information to design more effective online fundraising and advocacy campaigns. Constituent360 also includes features shared by all modules, including reporting services, a personalization engine, social networking widgets, a points-based loyalty system and extensive configuration options.

The Company’s DataSync software enables synchronization of constituent information between Constituent360 and the clients\' offline donor databases. DataSync connects constituent information with more than 30 different offline donor databases, allowing clients to integrate online and offline constituent communications and fundraising programs.

The Company also provides the Convio Connector, which provides real-time integration capabilities with the most widely-used legacy donor databases.

The Company’s Email Marketing tool allows clients to create and deliver branded email communications and content tailored to individual constituent interests based on the profiles captured in its Constituent360 platform.

The Company’s content management tools which enable clients to professionally manage website content, include authoring tools, editorial workflow, personalization, search and document management. The Company offers two web content management tools, PageBuilder and Convio Content Management Systems, or CMS.

Cost of revenue increased $2.0 million, or 27.5%, in the six months ended June 30, 2007 compared to the six months ended June 30, 2006.

Sales and marketing expenses increased $2.9 million, or 37.3%, in the six months ended June 30, 2007 compared to the six months ended June 30, 2006.

Interest income increased $35,000, or 35.0%, in the six months ended June 30, 2007 compared to the six months ended June 30, 2006.