As consultants, we have partnered with countless nonprofit clients whose donor management systems are, to put it mildly, insufficient for the organization's needs. Nearly every one of these organizations started small, with a single successful program or service driven by the founder's personal passion for the mission and, seemingly, no expectation that the same success would create more interest in the organization. Their initial donor "database" is a list of the names and addresses of those initial donors, kept in a spreadsheet or, in some cases, in the equivalent of a Rolodex--just handwritten notes in a folder.
The problems arise when the organization expands beyond its initial work to include new programs and new staff, often without upgrading their approach to donor stewardship. By the time a fundraising consultant is called in, the organization is at a transition point and needs more funding. They have tried the typical routes--mailing a massive appeal; attempting to apply for grants; holding a fundraising event and/or asking their board members for larger gifts–unaware that there is, forgive the pun, a wealth of information at their fingertips.
The key to the treasure is having a flexible, robust, and affordable way to corral, access and manipulate your donor information. A manageable and professional donor database. A donor database allows you to see every donor in 3D, from the things you glean in conversation with them (wine preferences, favorite team, and grandchildren’s names) to how other people in their zip code or state give to organizations like yours. Having a centralized system for storing all of this information is the key to developing a personalized engagement and stewardship strategy that allows your development team to work more efficiently and cost-effectively.
There is another important reason to have a central repository for all donor interactions: People leave.
I regularly recommend that Development team members make an “if I hit the lottery” plan (so much more positive than the “if I get hit by a bus” plan!) that doesn’t include them staying in their current role at their organization forever. It usually starts like this: “Sometime between discovering your winning ticket and becoming a major donor, you will probably want some time off. Who knows what you know? Who knows where to look for what you keep in your head?” Without a centrally hosted donor database, you are one day away from all that critical information leaving with them.
(There is a bigger conversation to be had about the importance of succession planning, but that’s another article.)
Donor data is usually managed in one of three ways: online fundraising platforms, CRM systems and donor management software.
Constituent Relationship Management (CRM) systems are highly customizable software solutions. Originally designed for corporate sales departments, CRM systems offer nonprofit organizations with a way to track donors just as a business would track a sales lead. CRM systems can be modified for nonprofit use and are easily scaled with the help of a dedicated IT manager or software expert.
Donor management software is specifically designed to meet the needs of nonprofit organizations. Less customizable than CRM systems, these offer donor- and gift-specific templates and offer more donor relationship management capability, including moves management and donation management tools.
Both CRMs and donor management software solutions may offer the option to add functionality through expansions--other software solutions developed by the same vendor that can easily integrate with your donor database--or integrations with other third-party software.
It can be tempting to buy a system with all the bells and whistles in the hopes that your organization will grow into it, or to go for a less expensive, bare bones option that meets your current needs, but does not allow room to grow. The right sized solution will scale with your organization as you add staff and increase the number of donor records. It will also have the capacity to improve functionality in response to your organization's changing needs.
How to decide? Start where you are. How many donors do you currently have? How is that information stored now? How do you presently reach those donors, and how often? How many do you expect to gain in the next few years? What information is most important to you?
Next, consider the areas of struggle within your current donor stewardship program and work with your development team and other potential users of the system to determine exactly what you need the system to do. Are you trying to gain a deeper understanding of your donors? Are you trying to help your staff work more efficiently and cost-effectively? Do you need the software to integrate with third party applications you are already using? Most systems can run a list of donors, but if you need a list of donors who have given over a certain amount and who also have children in elementary school you will need a system that can run that specific report. These “must have” items will inform your search and significantly narrow the field.
Third, determine how much and what kind of internal and external support you will need to transfer all your data, bring the system online, and keep it running. Consider whether the staff members you intend to use the system have both the time and tech savvy required to make this transition. Will a basic overview do, or do you need customized training on the modules staff will be using most often? Can you rely on the vendor for data migration, system implementation and onboarding as well as ongoing high-quality training and support?
Your donor database will be a repository for all sorts of information, some of it sensitive. With cyber threats abounding, the platform you choose should offer multiple levels of security in the form of advanced control over permissions--allowing only staff members who absolutely need access to confidential information to have it--as well as PCI compliance, ensuring that the platform’s payment processing tools protect the information of donors who give online. Do not assume that these things are built in; explicitly ask your vendors about their platform’s security measures. At last, we come to cost. It is critical to understand both the initial and continuing costs of the systems you are considering. Because donor databases are highly customizable, the base price usually only accounts for the number of users, the number of donor profiles, and the basic features of the system. Some even provide the basics to nonprofits for free. Ask the vendor to provide a detailed breakdown along with the overall quote. How do they determine the cost of the software (per record and/or per user vs. monthly/annual cost)? What are the specific costs of set-up, expansions and integrations; training and tech support; data transfer and clean up and software updates? Are there additional fees associated with processing online gifts?
Equally important are the unseen costs of database integration and management. Consider the time it will take your staff to learn the system and properly manage the data. Be sure to factor in the time your staff will spend manually entering information from incompatible third-party platforms, as well as the time it will take to correct any errors that occur when that information is manually entered, and weigh that against the cost of a system that comes with the things you need already built in.
Once you have narrowed your options based on these parameters, look at online reviews and ask your vendor to refer you to other clients who use the product the way you plan to. Then arrange for a demo for the staff members who will be responsible for managing your data.
A final word: whichever option you choose, your database is only as useful as the data it contains. It is critical that every person who uses the system adheres to the same standard for data entry so that your information remains organized and easy to use. The cleaner your data, the easier it will be to steward your donors properly, building relationships that will help your organization continue to advance its mission. It is equally important that each user has the capacity to not only prioritize database usage but that they are encouraged to see the added value that a robust and properly managed database brings to their work and the organization overall.
Need help finding the right database solution for your organization and how to use it? Contact us.