Skip to main content
Philanthropy Journal Home

Philanthropy Journal News

Back-to-basics technology critical for fundraising

 | 

Todd Cohen

The bad economy is a good time for nonprofits to retool their technology and the way they use it for fundraising, experts say.

Technology that supports fundraising includes websites and email for communicating with givers and other constituents, as well as databases for better understanding givers and identifying their interests and relationships with the nonprofit.

Nonprofits’ goal in using their technology should be to tell their stories simply and clearly, and use what they know about their givers to generate donations.

“It’s all about the data, know thy donor, really understand how that person is engaged in your organization,” says Holly Ross, executive director of NTEN, a network of consultants and nonprofits that focus on technology.

“That’s the most important thing you can do,” she says.

And while the recession has made resources tighter than ever, experts say, nonprofits can create smart tech solutions with modest investment.

That investment likely will include not only the cost of software and integrating it into existing databases and systems, but also the effort involved in training staff and reengineering business processes to make the most productive use of the new tech setup.

Barry Newstead, a partner in the San Francisco office of Boston-based nonprofit consulting firm Bridgespan Group that advises nonprofits and philanthropic leaders, says technology “changes the way your fundraisers and others engaged in development do the work.”

Initially, he says, nonprofits that upgrade their technology likely will see a “cost in terms of productivity because they are trying to figure out how to use the new system.”

The ultimate goal, he says, is to “change the system to get more productivity.”

Keeping it simple

Technology to support fundraising involves external communication as well as internal management and use of donor data, says Ross.

Internally, nonprofits can use database software to “help understand who your donors are and how to segment them appropriately,” and to support other software systems to communicate with donors “before, during and after a gift,” she says.

At many nonprofits, constituent-relationship-management software, or CRM, often consists of a collection of separate databases the organization might use, for example, to manage gifts, volunteers and activists, respectively.

In addition to those separate databases, many nonprofits also have what are known as “shadow” information-technology systems, with each staff member who works with donors, volunteers or activists maintaining their own spreadsheets on their individual computers.

A key challenge for nonprofits that want to make better use of their data to raise money is to integrate all those databases, Ross says.

“That’s where nonprofits are spending a lot of time,” she says, “Getting data to work together so you have a 360-degree view of donors and are communicating more effectively with them.”
Segmenting and targeting donors based on their interests or giving patterns, for example, can generate much better responses to email appeals, she says.

Newstead says tracking interactions with donors and prospective donors is critical for fundraising.

That can include knowing which donors are active, which are inactive and how much they gave the previous year.

“Too many nonprofits don’t know what the status of their relationships is,” he says. “In the end, as an organization, you are trying to maintain a series of relationships, and those should be, ideally, institutionalized relationships, and hopefully over many years.”

Executive directors and fundraising staff often “turn over,” he says, leaving their organizations with no institutional memory about their donors.

“The ability to have an institutional view of those relationships and their history and status is a valuable resource, and most nonprofits can’t keep track of that,” he says. “An individual who gives a small gift this year can be the one who gives a big gift next year.”

Externally, nonprofits can make productive use of email, their websites and social media to communicate with donors and prospective donors.

A key purpose of a website should be to provide “basic information about your organization that makes you look transparent and responsive,” Ross says.

Prospective givers look to websites to learn about an organization’s mission and programs, find out who serves on its staff and board, and get financial information from the Form 990 return it files with the IRS.

So a website does not require “fancy flash,” Ross says. “It needs to be clear, well-organized and professional looking.”

Modest investment

Developing the technology to support their fundraising should require only a modest investment, experts say.

Small nonprofits with homegrown databases, for example, should be able to acquire a constituent-relationship-management system for less than $4,000 a year, Ross says.

Newstead says low-cost solutions, many of them through open-source applications, are available to handle and integrate databases.

Nonprofits also can look for add-ons and other applications to help them send email and get more mileage out of their databases.

Ross says sending email messages that are clear and easily understood also can be done using inexpensive tools that are readily available.

If a nonprofit does not have someone in its organization who is tech-savvy, she says, it should be prepared to invest in a consultant who has expertise in setting up databases.

“The database is only going to be as good as the process and the data you put into it,” she says.

NTEN, for example, has a network of 750 consultants who focus on nonprofits.

Newstead says nonprofits also should consider looking for volunteers with tech expertise, and including tech experts on their boards, just as many boards include people who understand finance, accounting and human resources.

Ross says information-technology has turned communications into data.

Technology now allows nonprofits to see who opened an email message, or clicked on a link or took action, for example, or to track which of several links attracted the most clicks.

“You can see what content they’re accessing,” she says.

“Everything they do to consume information about your organization,” she says, “is now data, and we need to be able to turn that into intelligence that lets us understand how to better communicate with our donors, and it’s even within the grasp of smaller organizations.”

Newstead says any investment by a nonprofit in technology “should be pointing towards achieving the mission.”

Over the long-term, “organizations should be able to fundraise, both more effectively, meaning get more money, plus the right kind of money, that achieves fulfillment of the mission,” he says.

“You can raise more money, from more people, without having to add more development folks,” he says. “The idea is for technology to allow the staff to be much more clear about who they should be reaching out to, what they should be doing.”
And that, he says, “translates into more of the right money for the work, which translates into achieving more of the mission.”

Leave a Response

Your email address will not be published. All fields are required.