Nonprofit software purchases on the rise

The number of charitable organizations using nonprofit management software is growing. According to a current study from IT research consulting firm Software Advice, 41 percent of nonprofits are in the market for new software platforms geared toward managing nonprofit operations. This is an 11 percent increase from last year’s report.

More charities are demonstrating a need for nonprofit-specific management software. More charities are demonstrating a need for nonprofit-specific management software.

Function follows form
The reported numbers include organizations who are purchasing management software for the first time as well as nonprofits looking to switch their current platforms. Limited functionality was the top-cited reason for changing software platforms. Lack of user-friendliness followed. For smaller nonprofits, functionality that fits within a budget is the primary driver in the search for online management tools.

The rise in nonprofit software buyers underscores the need for philanthropic management tools. In another Software Advice survey, 99 percent of respondents reported that fundraising software helped them collect more donations. Almost as many identified favorable results in record keeping, reporting and workflow.

Software saves time
Surprisingly, most nonprofits still utilize software targeted to a general audience, managing their data and records with Microsoft Office or Google Apps. But these platforms don’t offer full functionality for nonprofit needs. As an organization grows, general software often becomes too limited. In addition to increased capabilities, nonprofit management software saves a lot of time and improves work efficiency.

“As an organization grows, general software becomes too limited.”

A good software platform automates processes that aid in stewardship and communication, marketing and fundraising, and record keeping and reporting. But how does an organization know which tools are most tailored to their needs? The report takes a look at the functionalities nonprofit managers most often look for in new software packages. Janna Finch, Software Advice’s Senior Market Research Associate, hoped the survey could help guide buyers in their own purchasing decisions.

Finding the right fit
Finch suggested trial periods as a good way to learn how to use a software platform before, ensuring satisfaction before purchase. With a widespread focus on engagement and stewardship, most nonprofits prioritize donor and constituent tracking on their list of necessary functionalities. They want to quickly and easily find contact information, and they want to easily communicate across channels with the help of outreach tools.

In addition to considering the functionality of a software platform, nonprofits can keep the following things in mind:

The numbers
Budget is the first factor, and it’s a good idea to inquire about costs before investing time in a trial run. Be careful to read the fine print. Some businesses offer “free” online tools but ask for a percentage of donations in return, warned Fundraising IP.

Is it easy to use?
The most definite answer to this question lies in the trial run. Not every user is as tech savvy as the next, and organizations need to find platforms oriented toward their teams’ skills. Ask a company whether its technical support is free, or if the software package is accompanied by tutorials.

What do others have to say about the product?
Beyond the Software Advice report, look for customer testimonials on a company’s website, said Fundraising IP. How many happy campers are there, and why are they happy with the platform? Positive reviews from similar organizations are a good sign that it’s time for a test run.