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Monday, August 18, 2008
First let me remind my readers that I'm the CEO of a software company whose business is providing fundraising software to non-profits, so I can't claim full objectivity on this topic. That said, I'm pretty tired of reading blog postings and articles from non-profit consultants espousing the virtues of "free" software for various aspects of nonprofit administration -- from constituent relationship management (CRM) and web content management systems (CMS), to online donations, etc. In some cases the products being recommended are open-source software like ebase, Civicrm, SugarCRM, etc. and others are from philanthropic entities set up by for-profit companies like salesforce.com.
Sure, its nice of salesforce.com to provide nonprofits with free licenses for their software, but they are able to do this because their real business is providing salesforce as a sales contact management system for businesses. Adapting salesforce to provide the processes and reporting necessary to meet the unique aspects of nonprofit fundraising is a daunting effort. Of course these consultants have a solution -- just hire a consultant to adapt (customize) the system to meet the needs of your nonprofit. Unfortunately the cost involved often far exceeds what the nonprofit would have to spend to buy a product that is already designed and tailored for non-profit fundraising.
I have a similar criticism of open source products, where the products must be maintained and supported by a community of developers. Again, the motivation -- providing nonprofits with inexpensive software -- is laudable: however the results almost always require the nonprofit to spend far too much time and effort on figuring out how to make it work.
As I noted at the outset, you can reasonably question my objectivity, but take a look at these quotes in a recent article from idealware that presents case-studies of a few nonprofits' experience with general-purpose CRM systems.
From NY-NJ Trail Conference (NNTC)
"While ebase was a low-cost solution for NNTC (ebase can be downloaded for free and used on top of Filemaker Pro), the real cost has come in the staff time it has taken to modify the database. Daniels' deep technical knowledge allowed him to make major changes. The rest of the staff now knows enough to make routine changes as necessary and train each other as new staff members are hired.
Because of his comfort with technology, Daniels did a lot of the CRM implementation himself, though he knows this is not an option for many nonprofits. "Most organizations don't have a high-powered techie to implement a CRM for them, and finding a sophisticated volunteer is not possible for most organizations," he says. "Without sophisticated knowledge you may have to hire consultants."
Words of Wisdom
Daniels cautions against getting locked into a product. In NNTC's case, ebase has not progressed and there is no upgrade path without doing a significant rebuild of the existing data and reports. "Nearly the entire CRM would need to be rewritten to upgrade."
From Washington Toxics Coalition (WTC)
Salesforce itself is free for WTC to use because of Salesforce's donation program (which provides up to 10 licenses for 501(c)3 nonprofits). However, it cost $10,000 for their consulting firm, ONE/Northwest, to migrate WTC's data and build custom features. "We couldn't have done it without them," says Dawson. The project took about four months to go live. For an organization with about a million dollar annual budget, the CRM modification "wasn't chump change," says Dawson."
"Not everything is better in Salesforce. WTC likes to create very specific solicitations to donors based on their interactions with the organization, and it is difficult to print a spreadsheet with a full history of giving. Ebase did this better by storing all donation data in one place. WTC's Consultant, ONE/Northwest, created a custom view of some interactions but not of others."
Here is a link to the complete article which has a lot of other interesting insights and also includes many positive comments http://www.idealware.org/articles/crm_case_studies.php.
My point is simply that non-profits need to realize that the cost of software is just a small component of the total investment in successfully implementing technology. As a software vendor focused entirely on nonprofit technology we have a strong financial incentive to help our clients use our products successfully. We serve as their technology experts, so they can spend their time and energy on their missions and building stronger relationships with their donors and constituents -- not on building software.
Friday, August 1, 2008
A recent article in the Wall Street Journal noted that sales of luxury goods are holding up much better than retail sales in general. The reason is simple: rising gas prices and the slowing economy just have a more dramatic impact on the middle-class. Unfortunately, non-profits are likely to see a similar effect on their fundraising campaigns, with less wealthy donors being more cautious in their donations.
The best strategy to deal with this is obviously to target constituents who are wealthier. Although wealthier supporters often correlate with those who've given you larger gifts, a better strategy is to identify giving potential using prospect research or wealth screening techniques.
A simple and inexpensive technique is to add demographic data to your database using a data enhancement service. For instance, when we do this for clients we compare donor names and addresses to a database of 110 million households. Typically matches will be found for 40-60% of the records. When there is a match we are able to add almost a dozen demographic elements such as head of household age, whether they own or rent, marital status, etc. Most importantly we can add estimated household income. The income data is primarily based on the average for their zip code so it only provides a rough guideline, but it can be invaluable for campaign targeting.
Of course even better than relying on demographics is to use actual data about donor assets such as real estate, stock holdings, etc. Much of this information is available through public and private databases, but sifting through such data can be time-consuming and difficult. The best solution is to screen all or a portion of your database using a wealth screening service such as Wealth Engine. They've developed proprietary techniques to screen as many as 25 different data sources to identify donor assets which are combined into a simple donor giving-potential score that can be used to drive targeting and ask levels. The more detailed information about wealth and assets is of course indispensable for capital campaigns, moves management and major donor development efforts.
Now is the perfect time to pursue either of these screening techniques so you can have the resulting wealth information to use in your year-end fundraising campaign.Labels: prospect research, wealth screening
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