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Digital philanthropy: Part 8 – Electronic enterprise – Building relationships

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By Todd Cohen

The American economy has prospered – and will rebound — because entrepreneurs think big, seize opportunities, create alliances and invest heavily in technology.

Nonprofits can use that same approach throughout their operations – from managing staff and data to raising money, marketing their services, forming alliances and serving as advocates.

The nonprofit sector in the U.S. is huge, representing 6 percent of the gross domestic product. And while they come in all shapes and sizes and represent diverse fields of interest, nonprofit organizations share many traits and traditions.

Because the philanthropic mold was made before the coming of e-commerce, however, nonprofits are using strategies and tactics that don’t make use of powerful digital tools and aren’t geared to today’s competitive challenges.

Now, thanks to the related industries of e-philanthropy and venture philanthropy, nonprofits can adapt their practices to the new economy.

E-philanthropy covers a lot of territory. Tech products and Web-based services range from those that help donors find and contribute to charities to those that help nonprofits process transactions, make sense of data on donors and build relationships with them.

Over the years, nonprofits have perfected the strategies and tactics needed to raise and process contributions. Now, thanks to the Web and new software products, those steps can be automated and integrated, promising a quantum leap in fundraising.

Using database software custom-designed for nonprofits, fundraising professionals can track donors. And email software allows those same professionals to distribute solicitation letters quickly to targeted audiences.

Yet, unlike the business world, nonprofits typically have not integrated their email and donor databases.

That’s changing, though. Nonprofits now can buy Web-based software that helps manage online relationships with donors.

And because the software is Web-based, nonprofits can lease it, lowering the investment required for technical maintenance.

As such “application service providers” develop similar Web-based products that nonprofits can lease, not only will the technology not get in the way, but it will make nonprofit work much more effective.

Such Web-based products are being developed to help nonprofits manage a broad range of tasks, both for back-office operations such as purchasing, to managing relationships with board members, donors, volunteers, clients and other organizations.

Technology helps people take the skills they have and apply them in ways not previously possible. Slowly but surely, such tools are emerging to serve the growing philanthropic market, which can benefit by putting those tools to productive use.

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