Evaluating Donor Management Software

May, 2004
By Tech News Staff Writer Arthur Vincie

A recurring topic of discussion in the sector is that of donor software. This software, critical to most nonprofits, comes in all shapes and sizes, ranging from free, web-based solutions like eTapestry to six figure packages that require hiring a trained consultant to install and customize. With such a crowded, mature marketplace, the conventional wisdom has always been that you should find a solution that's right for your organization's needs and customize it. At the recent N-TEN conference this was crystallized in the breakaway panel entitled, "Choosing Donor Software," where the idea of building a solution was essentially dismissed. To paraphrase the panelists, "Why spend time trying to figure out what these vendors have already spent thousands of hours figuring out?"

Add your comments to this article! Tech News invites you to share your experiences with Donor Management Software. Editors' Note: Tech News does not endorse any particular software provider listed in this article.

Many people I spoke with informally, however, were not happy with the current software choices and had decided to do just that: figure it out and build it. The most common set of complaints was that donor software was either loaded with features that didn't apply to the organization and made it overly complicated to use, or that it failed to easily integrate with other databases that the organization needed to maintain.

Donor Software or Contact Management? Often organizations look to donor software as a way to automate fundraising efforts as opposed to examining a contact management system that centers on individual relationships. An interesting reference from the break-out session was 'Pareto's Law in Fundraising:' which states that (on average) 10% of an organization's donors represent 90% of total giving. Any agency would therefore desire more detailed records on these top tier donors which presents the question: Should your system selection be concerned with robust functionality to capture details for a small group of major donors, or should your donor database be designed simply to reduce workflow and complexity in capturing data for the bulk of your donor records? Developing a Strategy for System Selection Form an internal committee, possibly leveraging some outside experienced help to look at the issue. Forming an internal working group not only serves for broad needs analysis but creates buy-in that will lead to a successful rollout. Determine your information capture needs by examining your current process.

ASP Vendors (monthly charge) eTapestry Donor Perfect Online Under $10,000 ebase LifeLine Best Paradigm Telosa Exceed $10K - $50K Blackbaud Raiser's Edge Donor Perfect GiftMaker Pro Results/Plus 50K+ BSR Advance Best Millenium

Select four to six products to review. Ideally these systems will be different enough from each other to compare and contrast.

Develop an internal rating tool; force each department to provide a representative for a demo meeting and afterwards rate the software.

Keep in mind data conversion needs from your existing system or data entry time needed to convert from paper-based records.

Existing Software Solutions Miss Two Critical Segments of the Nonprofit Marketplace:

Many of the existing donor software solutions discussed at the conference missed two critical segments of the nonprofit marketplace:

small (1-10 person) organizations, which lack the staff capacity to evaluate and test available solutions, and

larger organizations whose donors, clients, and other contacts come out of the same pool.

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Small organizations are looking for "out-of-the-box" functionality, something that would be very simple to set up and would integrate well with existing database needs. eTapestry comes the closest with regard to setup time, but is meant for donor software. eTapestry, an online solution, may fulfill the needs for small community-based organizations. There is no software to install, requires minimal setup work, and offers a surprisingly comprehensive feature set.

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Larger organizations often need to track interactions with clients, staff, board members, and donors. Often, one person may fall into more than one of these categories. So a solution is needed in which donor/donation tracking is only one part of the requirements. It's a good idea (but not common) to put all the people you're tracking into one database. Smaller organizations have a better success rate at getting everyone into the same database. Groundspring.org's software, eBase, may come closest to fulfilling the needs of larger organizations. It comes with built-in contact management and groups can extend its functionality since the user license is modeled on the 'BSD Open-Source License'

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Possible Questions When Reviewing Vendors

With so many existing database choices for donor management systems designed for nonprofits, remind yourself when frustrated that this is a 'buyers-market.' Here are some sample questions to ask vendors before investing in tools and providers for your donor management records:

Can the system integrate with other Institutional Wide System(s)?

Can we modify/customize the application?

What are your fees?

Is customer support bundled with this product?

What kind of plans do you have for future product development?

System Selection Process

1. Project Organization

Dedicate an individual or several staff members to the project.

2. Determine Requirements

If building, should a prototype be developed for review with final requirements to follow or should a full set of requirements documentation be developed prior to any systems development?

What functions are important to you?

Do you have special security concerns?

Will you use a 'Request For Proposal' process or go through a 'Demonstration Scenarios' process? Demonstrations are often key to determine if the vendor can actually provide what is being asked.

3. Evaluate Vendors

Place the burden on vendors.

Narrow down your vendor selection.

Determine the answer to the 'Buy vs. Build' question.

4. Implementation

Have an implementation plan that includes staff training.

Determining an Application or Direction That Is Right For Your Organization

Organizations of different sizes and sophistication have different needs and budget limitations.

Bundling vs. A la Carte service for modules.

Quality of the product.

Develop a Strategy for Selection

Comprehensive needs analysis leads to buy-in.

Determine needs BEFORE deciding on conversion.

Form a small committee to oversee the entire process.

Determine four to six companies that are worth looking at (hopefully they'll be different enough from each other).

Develop rating tool; force each department to bring a representative to demo meetings and after the meeting rate the software.

Process of final vendor selection could take almost a year.

Converting your data from other systems can be time consuming and costly.

Deployment Follow-up is Key

Keep your small committee together and have quarterly or semi-annual review meetings.

Improvements to any database are continuous.

Building Your Own Solution

Building a database often forces departments to work together and see each other in a new light. While this process is often painful and always takes longer than you want, the end results can often be rewarding. In addition, building a solution does have other, less obvious advantages.

Building a customized solution requires acquiring some level of IT competency, even if an outside consultant does the actual programming.

Secondly, it requires looking at the larger population that interacts with the organization -- vendors, board members, clients, volunteers, donors, staff members -- and discovering the relationships between them.

Finally, the process of building a solution unearths practices that, left alone, are actually destructive to an organization -- mailing list hoarding, double data entry, and a less-than-optimal level of IT knowledge among staff.