Why Excel can only take you so far in fundraising
When does my organization need to invest in a donor database?
I'm going to punt this question over to my firm's donor database and fundraising expert, Jason Rieckewald-Schmidt (picture right). Jason has done work for both very small startup nonprofits to large multi-million ones. What I especially appreciate about him is his willingness to patiently explain his work to our clients - so I thought it'd be a treat for you to experience some of that.
Here is his answer:
Keeping track of your donors should be simple. You segment your donors, mail or email them a campaign, enter their donation and send them a receipt. But what if all those processes are in separate applications, instead of one central database?
Most nonprofits have some system for keeping track of their donors. From Google Spreadsheets to online CRM databases, having relevant, up-to-date information is essential to successful fundraising. What is just as essential is making sure that all your donor data and interactions are managed in only one application.
When a recent client of ours wanted to track any donor action, it took reconciling between multiple applications. Their appeal mailing list was in an exported spreadsheet, where new donors and address changes were not being updated. Next, when a donor gave a gift, the donation was recorded in a database and then re-recorded in a separate pipeline spreadsheet. If the organization wanted to send out email newsletters, it did so in yet another separate online marketing client. By having duplicate information in multiple applications, it was wasting time, reducing accuracy and making it almost impossible to get a clear picture of fundraising performance. It also created a lot of work for a development associate.
After converting to a commerical product called Common Ground, built on top of the industry standard (and free to nonprfoits) Salesforce platform, our client was able to tack their potential donations in a pipeline and then segment donors for appeal mailing depending on specific parameters like last gift date. After the donation was received, they recorded it in Common Ground and tracked progress through a fundraising dashboard. Each email campaign was created in Common Ground and showed which donors opened the email in the donor record. This not only saved time and increased accuracy, but it gave the development team a clearer picture of how the organization was pursing their fundraising goals.
And in my experience working with nonprofits, it seems like our client’s multiple donor applications is more the sector norm, than the exception.
Here are three essential functions to a donor database.
1. Constituent Relationship Management
The key to effective fundraising is a Constituent Relationship Management [CRM] database. It is almost impossible to track grants, potential donors, input donations and report on donors in a spreadsheet. Investing in a solid database application will pay huge dividends in reaching your development goals. And making sure the development staff knows how to use it is just as important.
One of the benefits of cloud computing is having an online donor database. The Salesforce Foundation offers a free database to nonprofits and Convio’s Common Ground is a great way to get the power of Salesforce with your donor database.
2. Create a Pipeline for Donor Moves Management
Once all your donor information is in a database, the next step is to track prospects and grant applications. Instead of having dozens of to do tasks in Outlook or in a spreadsheet, using a prospect pipeline will help guide development staff through the donor cultivation and grant process.
From making the initial contact to sending the donor acknowledgment letter, all the different steps are set up with auto-reminders so you don’t miss an important deadline. This will take away all the double data entry and cross-checking to do items with donor responses.
3. Segmented Communications with Donors
Now that you have reliable donor information you can now send targeted, segmented communications to the donors in your database. Whether using an email marketing application like Vertical Response or mailing out your annual appeal, you will be able to segment what mailing gets sent based on their donor information.
So if all your annual fund addresses are currently in an Excel spreadsheet from two years ago or you manage donor interactions through Outlook or then transitioning to a new donor database might be the best way to improve your fundraising efforts.
A good litmus test is asking your development director “where are we at with this donor?” If the answer takes more than ten minutes, you might need a new database solution.
Not only will a central database solution save you time and improve your fundraising but your development staff will thank you for it.