Blackbaurd, a provider of software and services to the nonprofit sector, is acquiring eTapestry in a deal worth $24.8 million.

eTapestry, which is based in Indianapolis, Ind., provides software-as-a-service to the nonprofit sector.

Shareholders in eTapestry could receive as much as $1.5 million more in stock through a performance incentive agreement.

eTapestry’s lead product is an on-demand fundraising tool. Jay Love, a co-founder and the current chief executive officer of eTapestry, will continue to manage the operation. eTapestry has 85 employees.

“This strategic move provides Blackbaud with a best-of-breed, on-demand fundraising solution that is ideally suited for smaller organizations interested in an easy to deploy and relatively low cost offering, as well as mid-sized nonprofits interested in a stand-alone fundraising solution deployed in an on-demand model,” said Marc Chardon, Blackbaud’s CEO.

“This acquisition opens up a market opportunity that Blackbaud was not actively addressing,” he added. “From a long-term perspective, we believe that Software-as-a-Service offerings in the nonprofit sector will grow in importance. With the acquisition of eTapestry, we have positioned Blackbaud to participate in an early-stage, high-growth trend with a company that has a proven solution, customer base and growth track record. In addition, Blackbaud adds significant domain expertise in the nonprofit sector and on-demand market.”