Study shows nonprofits must invest in donor management software to grow

Implementing a donor management software suite gives nonprofit organizations the power to excel in all areas of operation.

Nonprofit technology reviews firm Software Advice recently conducted research on 385 interactions with small-business buyers in search of the ideal software for their nonprofit. The sample group was chosen at random with the intention of discovering what nonprofits need and want most out of software today.

Ben Stroup, senior vice president of fundraising communications for Pursuant, asserted many nonprofit organizations now explore who their donors are and why they chose to give in order to better understand constituents’ goals and influences since the most recent financial crisis in the U.S. This information proves crucial to success, prosperity and longevity in the nonprofit sector. Donor management software helps track contributions over time, helping organizations better understand their donors.

According to the Software Advice study, the top three reasons nonprofit organizations want to purchase a software system are communication automation, operations modernization and production of a singular fundraising event. Easily creating form letters, contacting constituents via email and maintaining a current and correct donor database were of primary concern for 31 percent of the groups surveyed. All of these processes take too much time when completed manually or entering information into spreadsheets, especially if the staff devoted to writing and sending letters is relatively small. Nonprofits do not typically have large staff to cover all the bases required before and after a big event. By automating these items, nonprofits can spend more time on event planning and working directly in the field with people to spread their message.

Support for the donors
However, if a group is working with a system that routinely crashes or cannot handle the fast-paced actions of an impressive nonprofit, time and energy are wasted on troubleshooting and correcting mistakes. An unreliable system could slow down operations or be unavailable when a group needs it most. This poses a huge detriment to productivity and efficiency. Current systems offer an online donation page implemented directly on the nonprofit’s website that would help customers better control their individual profiles. Online donation and website integration earned the vote of 14 percent of participants when asked about key features they consider necessary in nonprofit management.

Finally, whether planning a unique campaign for one specific event or simply maintaining a solid relationship with a member, communication with donors and volunteers is of the utmost importance. Without their support, the event will flop. Software that can generate letters and automatically send receipts and gratitude via email will improve results enormously. In another study conducted by Software Advice, 52 percent of the 2,313 nonprofits examined listed fundraising and donor management software as their first choice when looking for support.

Consolidation is key
In reality, software buyers need all of these features and more. Purchasing several different software programs would unfortunately cost nonprofits a great deal of money and there is no guarantee that each system would be compatible with the others. A full 55 percent of organization leaders identified an integrated software suite, where all aspects are packaged together, as ideal and necessary to run operations smoothly.

With donor management software, users can automate letter and email generation. Processing is integrated, so the same system can effectively and efficiently process donations, renew subscriptions, register constituents for events and track communication over time. Administration can also track progress with charts to better visualize the impact software updates have on the organization’s operations and success. In addition, the software system can be integrated directly into a business’ website, giving users a consistent experience. Nonprofits must invest in donor management software to stay relevant in an ever-evolving industry.