Financial Management

Findings indicate donation software is very valuable for nonprofits

As nonprofits focus in on establishing new goals for 2015 and beyond, adopting or updating their donation management software platforms should be on the docket. Software Advice recently completed their 2015 Fundraising and Donor Management Software UserView. Their findings indicated that domestic and international charitable institutions rely heavily on donation management software to increase functionality and efficiency.

According to Cecilia Riester, a media relations specialist at Software Advice, the goal of the survey was to determine how and where implementing a donation management platform affected nonprofits most, both directly and indirectly.

Benefits of implementation
The report discovered that 99 percent of respondents found that donation management software had a positive impact on the amount of funding collected since adoption. Fifty-six percent of those participating in the study planned on increasing their spending in 2015 on software updates or additions. The charities also stated that donor engagement tracking and accounting duties were the two areas of operation most enhanced by their current systems.

“A full 98 percent of all participants said donation management software improved recordkeeping and financial reporting in some capacity.”

Interaction tracking
Being able to track both inbound and outbound interactions with donors is crucial to healthy functionality. Of those nonprofits surveyed, 30 percent stated that donor engagement tracking was the most useful feature of their present software systems. A program that effectively monitors contribution histories and centralizes data makes observing giving trends easier. This can dramatically alter the way an organization creates an appeal, resulting in both lower campaign costs and higher gift amounts.

Accounting activities
Just behind donor engagement was accounting integration. Twenty percent of respondents claimed their ability to accurately interpret data and manage finances was most beneficial. However, a full 98 percent of all participants said donation management software improved recordkeeping and financial reporting in some capacity. A reliable platform eliminates the risk presented by manually inputting information into spreadsheets and tables, while reducing errors and redundancy. A feature that automatically sends out contribution receipts and acknowledgements was cited as the most helpful aspect by 11 percent of the charities.

Impact on fundraiser events
Collecting donations, maintaining records, improving donor acquisition, retention and communication with constituents were all positively influenced by donation management software for over 90 percent of the surveyed organizations. A charitable institution’s capacity to run a successful fundraiser dramatically increases with the implementation of a donation management system. This is partly due to improvements on constituent engagement and streamlined accounting tasks. But it can also be attributed to a CEO and nonprofit board’s ability to better understand where events are succeeding or failing. The software is a helpful tool for observing change over time and specific catalysts to those changes.

Donation management software can lead nonprofits to healthier accounting operations.

Of course, implementation does not come without its roadblocks. Learning curves and customization were considered the most difficult aspects of adoption by 67 percent of participants. To avoid letting these and other obstacles stand in the way of an organization investing in donation management software, it’s crucial for nonprofits to research their vendors prior to purchasing a system. Make sure training is provided and check to see if employees can test the program before it’s implemented. Check the availability of online training sessions, webinars and other support tools to which users can refer. In addition, be as communicative as possible with staff before, during and after a transition.

Research any donation management software provider before deciding to adopt a platform for a charity. Again, test driving the system is a great way to see how well it integrates with current platforms. If there are specific areas in need of improvement, the nonprofit should make sure the vendor offers features that will help solve those problems. Take charge of 2015 by adopting a powerful donation management software system.