As a result of COVID-19, most nonprofits are re-evaluating their fundraising plans, which likely includes fewer special events and more individual asking. This has led to an increase in requests to recommend donor management software. So I decided to update a column I wrote several years ago about how to approach the selection process.
If your organization is thinking about investing in a new donor management system or buying one for the first time, here are a few issues to consider:
Donor management software is not a luxury or only for large nonprofits who receive lots of gifts every year from thousands of donors. It is a critical fundraising tool that every nonprofit needs to maintain records, process and track donations, acknowledge gifts promptly and accurately, track fundraising progress, manage different campaigns simultaneously, analyze results, and increase fundraising results. Donor software should be the centralized home for all information about current and past donors, their giving history, and relationship with the organization. With a proper investment of time and patience, donor software can significantly help nonprofit staff and volunteers consistently and promptly acknowledge donations, build a history of giving and achieve fundraising goals.
If you are starting from scratch, begin by determining the size and capacity of the donor management system that will be needed. There are programs designed for small nonprofits with fewer than 2,500 records and others that can manage thousands of donor records, donations, memberships, point-of-sale purchases, capital campaigns, planned gifts and endowments. I recommend investing in a product that slightly exceeds your current needs so you can grow into it over time. It is better to buy a system two or three sizes too big to avoid shopping for a new system two or three years from now.
Give some thought to the number of users who will need access to the system.
I recommend having at least two staff, or board members if you are an all-volunteer organization, trained in how to use the system. Do not open it up to everyone, because having too many people entering data will result in duplicate entries, unreliable reports, and sleepless nights.
Look ahead to consider the organization’s short and long-term fundraising goals. If a capital campaign or endowment initiative is being considered within the next three years, look for a system that will support multiple campaigns at the same time.
If your nonprofit already has a donor database, discuss internally how the current system is being used and could be improved. Consider the size and quantity of special events, direct mail appeals, memberships programs, memorial giving, planned gifts, online campaigns, and other fundraising strategies that will place demands on the system.
One of the greatest benefits of a donor management system is reports that can be run to help staff and volunteers track progress and analyze fundraising results. Make a list of the type of information you would like to have and use that list to evaluate various products. Because some of the systems can be more expensive than others, include the CEO, CFO or finance committee in the decision-making process. You will also need to consider how data from the current system will be transferred into a new system.
A great strategy to help you choose the right program is to ask like organizations and nonprofits of similar size what systems they use and if they like it. Visit techsoup.org, nten.org and idealware.org to research various systems and read their blogs and guides on how to choose donor software and avoid pitfalls.
Once the search has been narrowed to two or three options, take time to demo each product, which can be done virtually. Be sure to ask about training and technical support, which will be critical to start and as new employees join the team. The more user-friendly and accessible the technical support, the more productive team members will be.
As you consider costs, be sure to include data conversation, training, support, maintenance fees and “special use” modules, such as membership and special events, which may be add-ons. Most products are cloud-based but you may need additional hardware or memory to run the program.
Avoid the temptation to short-change training costs. The system is only as good as the people who know how to use it. I have seen nonprofits buy a new system, expect staff to train themselves, and ultimately abandon the product. As a result, they went back to using Excel spreadsheets, which is a step in the wrong direction. As more nonprofits utilize online giving and virtual fundraising campaigns, having a cloud-based system will make it easier to interface with online giving portals and donation tools.
Although managing donor information is a most often a staff responsibility, it is important to educate board members about the need and importance of donor software and the benefits it can provide. Consider asking one or two board members to serve on the selection committee. They will be knowledgeable advocates among their peers when the time comes to make the investment.
Donor software is a critical tool for achieving fundraising success and a worthwhile investment, especially in times like these.
Notes on Nonprofits is written and edited by Alyce Lee Stansbury, CFRE, President of Stansbury Consulting and Kelly Otte, MPA, who is on sabbatical. Send your comments and feedback to firstname.lastname@example.org.
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