It’s time to start on your year-end appeals

February 1, 2009       Eric Leland      

The right donor management software can make a big difference in your ability to raise funds. The holidays are over but soon you’ll need to prepare another end-of-the-year appeal — pulling together your contact and contributions information to identify the right people to receive your message.

If this scenario gives you nightmares about wading through unfriendly databases, email programs, spreadsheets, and dated campaign lists, perhaps it’s time to think about a new software package.

The right donor management software can help you easily create just the right, targeted lists to ensure each of your constituents gets a message in a way that will encourage their support – and make a big difference in your ability to raise funds. Good software can help you understand each of your donors, and segment, analyze, and communicate to groups of supporters. But which software package should you use?

Fundraising processes can differ a lot from one organization to another, and each donor management software package supports some processes better than others. Before you start looking at tools, make sure you have a good handle on what you need — and not just what other organizations use, or what vendors would like to sell you. This should include:

  • Understand how you work with donors. Donor information is often detailed and includes complex relationships. Capturing, storing, and retrieving this information effectively requires a clear understanding of your typical procedures. Look at how you engage prospects, and how you encourage them to commit further.

Consider the information you would like to collect, and how you would like to retrieve this information later for analysis and communications. Focus on your outputs — what combination of donor information do you need to produce for reports, mail merges, or exports?

  • Think through your numbers. Many software vendors base their pricing on the number of staff members who will be using the system, and/or the number of supporter records you have. Consider both your current situation and where you hope to be over the next few years.
  • Consider your resources. Make sure you have a clear understanding of the resources you can devote to purchasing and sustaining a new system. How much money can you commit up front, and over time? How much time does your staff have to setup, learn, and maintain a new donor management system over the long term? What are the strengths and limitations of your current technology infrastructure?

The implementation of donor management software is challenging for many nonprofits, and you might benefit from implementation support from the vendor or an experienced third-party consultant, particularly if you plan to move data from an old system into your new package.

  • Script what you’d like to see in software packages. Using all of this information, create a list of what you’d like to see when evaluating possible software solutions. Many vendors prefer to give brief and sweeping descriptions of the features they offer, rather than the nitty-gritty you need to make a careful choice. Ask to see a demo of how the tool will support your core needs, rather than just asking whether they do — or try to get access to try out the software for yourself.

For Small Organizations

If your nonprofit is particularly short on cash and staffing resources, hosted online tools might be a good choice. These packages, which are available to your users over the Internet for a monthly fee, are built to work “out-of-the-box” without a large upfront investment, and are typically fairly easy to learn.

As the vendor hosts the actual software, your organization doesn’t need to worry about software upgrades, backups, or other maintenance functions. Your staff can access the system from anywhere they have Internet access. These hosted tools often integrate more naturally with online services, such as online donations, address verification, ZIP code lookups and more.

It’s particularly important to estimate how much you expect your donor base to grow over time when selecting one of these packages, as they can get considerably more expensive than other solutions for organizations with a big donor list.

As a more traditional route, there are a variety of systems that are installed on your organization’s server or an individual’s desktop. These systems require someone with basic technical know-how to get them installed, create backups of the data over time, and install updates as required. Instead of “renting” a hosted online database, your organization owns an installed database – which involves a bigger investment up front, but often reduces the cost over the lifetime of the system.

These systems are typically priced by user (sometimes called seats) rather than the number of donor records, making the pricing friendlier as an organization grows. With an installed system, your organization also has physical possession of the data, which can be important to organizations who have controversial missions and, particularly, those that need to be concerned about subpoenas.

These solutions have more expansive donor profiling, reporting and analysis that begin to support the needs of experienced fundraising professionals. They require more time and resources to implement, learn, and support but can in return offer a greater depth and breadth of capabilities.

How do you choose? The only way is by understanding your own needs, and comparing them to the available tools. On the one hand, don’t assume that a more powerful system will work better for you. An overcomplicated system will just be harder for your staff to use. It’s a waste of your time and money if you don’t need advanced features. On the other, it’s important to invest the money to buy a system that will effectively support your processes.

After all, a system that improves the effectiveness of your fundraising might pay for itself in the long run — and it can certainly help to reduce your nightmares about preparing for this year’s annual appeal. NPT

Eric Leland is the founder and director of Leland Design in El Cerrito, Calif. This column is courtesy of Idealware (www.idealware.org) and TechSoup (www.techsoup.org), two technology support organizations for nonprofits.

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