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Standalone donor databases are on their way out, integrated Web-based services on their way in.

Fundraising is one of the most important things you do. Yet finding the right software to adequately support all aspects of your fundraising efforts can be a challenge—and bewildering—especially with recent developments in that particular technology niche.

Formerly dominated by large standalone donor databases, the fundraising software space has been undergoing a swift evolution in recent years. New integrated packages that provide a broader range of functionality are coming into their own. And customer relationship management (CRM) packages are gaining popularity due to their ability to provide a more holistic view of all the individuals who might be touched by the fundraising process—no matter how tangentially.
"Traditional donor databases are a bit out of vogue at this point," says Laura S. Quinn, director of Idealware, a Website devoted to providing information and reviews about software for the nonprofit space, based in Portland, Maine. "They tend to have a very narrow focus" For example, such packages frequently don't have the capacity to track volunteers, or volunteer activities, which are frequently very important to the fundraising process. "As a result, people are increasingly looking for products that can give broader coverage to their fundraising efforts," says Quinn.

Indeed, there are two sides to fundraising software: the packages that track the "hard numbers" aspect of the gifts you are bringing in and managing the donors for prospecting, says Michael Stein, a blogger on non-profit technology, and president of Members Only Software Inc., in Washington D.C. The other, emerging, kind of integrated package involves more community relationship management and networking: knowing what people are interested in, knowing who else you know who knows that person. "The new integrated approach means that non-profits don't need to address those concerns in a piecemeal basis," says Stein.

Another major change, as in the business software world, is the increasing availability of software as a service (SaaS). A number of online-only services have sprung up, and many established names are offering online options. The advantage of going with an online solution is that they are easy to learn and use—they depend on a standard Web browser interface—and require no upfront investment in software or infrastructure. On the downside, some organizations don't feel they are quite as reliable, and worry about the security of having their critical data residing outside the company. "Before people commit to these Web-based services, they need to understand their contractual rights to the data," says Stein. "Do you have the right to the raw data? Can you take it with you if you change vendors? These are critical questions."

Whatever type of fundraising software you decide to go with—whether a traditional donor database, a CRM system, or an integrated portfolio of software—here are some key things to consider:

Appropriateness. The first question is: does the software have the functionality you need to support your particular fundraising processes? "You need to take a close look at how you raise money. If all you do is direct mail, there are some very specific systems geared toward that," says Steven Birnbaum, chief operating officer at Jacobson Consulting Applications Inc., an independent consulting firm based in New York that helps non-profits select and implement software. On the other hand, if your fundraising activities are centered around events, you'll want a traditional package you can run on a laptop, rather than relying on an online solution. After all, says Birnbaum, "if you're hosting a dinner at the Wardorf and need to check on a seating arrangement you don't want to have to go searching for an Internet connection."

Ease of use. Traditional donor software required users to program using rigid codes that were difficult to use. The newer, integrated packages tend to be more intuitive, especially the Web-based ones "You want to be able to categorize, profile, and track people easily without having to learn complicated commands," says Quinn.

Scalability. Although for ease of use reasons you don't want to go with a big complex package until you absolutely need it, it's a major hassle to outgrow your database, says Stein. "Take a good long look at your capacity needs, not only your present ones, but how you are likely to grow in the future," he says.

Ease of integration. Whatever you choose—whether a traditional donor database or a more generic CRM tool—you need to be able to easily get data in and data out. For example, most non-profits employ bulk mailing tools, to send out mass mailings. Without the ability to easily connect to those tools, nonprofits will waste a lot of time manually importing and exporting data—or worse, retyping data into a different system.

Good value. It goes with the territory that non-profits have scarce resources, and are very price sensitive. A name that inevitably comes up in this regard is Salesforce.com, precisely because it provides the first 10 licenses free, and offers an 80 percent discount for more than 10 licenses. "They've been exceedingly friendly to nonprofits," says Quinn. Still, although some of the leading donor databases are quite pricey, larger nonprofits might find them the most cost effective rather than cobbling together a host of less expensive systems with limited functionality. And when considering price, it's essential to take support, maintenance, and training into account, says Birnbaum. "No one budgets for these things. Yet there are always upgrades to install, and new features to learn," he says. "Plus, the high turnover of nonprofit staffs means that such organizations inevitably need to spend more time and money on training than they anticipated. This is another reason that ease of use is so critical—and why it can sometimes pay to go with a larger, more established vendor with a proven track record for providing good support to customers.

One thing is certain: the Internet is changing everything. Before long, most fundraising software will have at least some online component to it. "Traditional fundraising software grew up before the Internet, and a lot of vendors were hoping it would go away," says Birnbaum. "But it clearly isn't, and most vendors are beginning to adjust their strategies accordingly."

Last modified on Sunday, 19 May 2013
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