Christine Robertson
Conversation Date: September 12th, 2024 12pm CST
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Why Nonprofits Should Ditch Spreadsheets and Invest in a Donor Management System
In this episode of the Million Dollar Nonprofit Podcast, I sat down with Christine Robertson, an expert in nonprofit software and data management, to discuss why using a dedicated donor management system (DMS) is essential for nonprofits of all sizes. Many organizations, whether small or large, still rely on outdated methods like Excel spreadsheets and Google Docs to manage their donor data. However, transitioning to a CRM or DMS can drastically improve donor relationships, streamline operations, and ultimately help nonprofits grow.
Here are the key takeaways from our conversation:
1. Why Spreadsheets Are Not Enough
A common issue among nonprofits is the over-reliance on spreadsheets and Google Docs to manage donor information. While these tools might seem like an easy solution, they have serious limitations. Christine explained that once you export your data into a spreadsheet, it becomes static—meaning it doesn’t update automatically when new information is added, such as a new donor address or gift. This leads to outdated and inaccurate data, which can result in missed opportunities or mistakes in donor communication.
Christine emphasized that, while Excel is a starting point for many nonprofits, organizations must recognize the need for a dedicated donor management system to ensure that their data is always accurate and up-to-date. Using a CRM allows nonprofits to track donors’ giving histories, communication preferences, and other critical information in real-time.
2. Benefits of Using a Donor Management System
Nonprofits using CRMs have access to a variety of tools that make it easier to build relationships with donors. These systems often integrate with online donation pages, track event attendance, and allow for personalized communication through email marketing. With a DMS, you can easily segment donors based on their interests, giving history, or engagement, ensuring that your outreach is relevant and personalized.
Christine also pointed out that the real value of a DMS lies in the integration of various tools. For example, if someone donates through your website, the information is automatically added to the system, allowing for seamless tracking and communication.
3. When Should You Switch to a CRM?
Christine advises that if a nonprofit has any ambition to grow, they should budget for a donor management system early on. Affordable options like Little Green Light offer plans that start at under $500 per year, making it accessible even for smaller organizations. Investing in a CRM helps ensure the longevity and efficiency of your donor management, ultimately leading to better fundraising outcomes.
The risk of relying on Excel isn’t just inefficiency—it’s also the potential for data loss. Christine shared a personal story about accidentally mismatching data in Excel, a mistake that could corrupt an entire donor database. Transitioning to a CRM eliminates that risk and adds a layer of security to your donor management.
4. Who Should Manage Your CRM?
One of the biggest challenges for nonprofits is finding the right person to manage their CRM. Christine noted that many organizations assign this task to someone who doesn’t have the necessary skills or interest in data management, which leads to inefficiencies. Nonprofits should look for someone who enjoys working with numbers, has strong attention to detail, and is comfortable with technology.
Having someone dedicated to donor stewardship or data management, even on a part-time basis, can make a significant impact on the organization’s ability to maintain accurate donor records and build stronger relationships.
5. Personalized Donor Relationships
A key advantage of using a CRM is the ability to personalize communication with donors. Christine shared how a well-organized database helps identify major gift prospects and allows nonprofits to tailor their outreach based on individual donor preferences. By storing all relevant information in one place, nonprofits can ensure that the entire team has access to crucial donor data, making it easier to build long-lasting relationships.
6. Challenges of Manual Tracking for Major Gifts
Tracking major gifts manually in spreadsheets can lead to a host of issues, from incorrect tax receipts to a lack of insight into donor engagement. Christine stressed the importance of using a CRM to track key information, such as the donor’s gift history, communication preferences, and even personal details like family members or significant life events. This allows organizations to cultivate stronger relationships with their major donors, ensuring they feel valued and recognized.
7. Cost Concerns for Small Nonprofits
One of the most common concerns for smaller nonprofits is the cost of implementing a CRM. Christine recommended asking a lot of questions before committing to a system. Speak with other nonprofits, attend webinars, and consult with software providers to fully understand what features are included and what additional fees may apply. It’s also crucial to ask about renewal rates and whether prices are locked in for a certain period.
For small organizations, it’s important to look for a solution that fits their current needs without overpaying for features they won’t use. As organizations grow, they can invest in more advanced tools.
8. Bare-Bones Features for a CRM
When choosing a CRM, Christine suggested that nonprofits should prioritize the following basic features:
- Donor contact information (name, address, email)
- Classifications (e.g., alumni, board member)
- Online giving integration
- Email marketing capabilities
- Ability to track relationships (e.g., family members or business contacts)
These foundational features will help nonprofits get started with their donor management while providing room to grow and add more advanced tools as needed.
Conclusion
If your nonprofit is still relying on spreadsheets to manage donor data, it’s time to consider the long-term benefits of investing in a donor management system. Not only will a CRM streamline your operations, but it will also help you build stronger, more personalized relationships with your donors, ultimately leading to increased donations.
For more information on how Christine can help your nonprofit implement or optimize a donor management system, connect with her on LinkedIn or visit her company, Impact NPACT. Investing in your donor data is an investment in your organization’s future success.
Frequently
Asked Questions
Excel spreadsheets are static, meaning they don’t automatically update when new donor data comes in. This leads to outdated and inaccurate records, which can hinder donor communication and relationship-building. A DMS offers real-time updates, automation, and better organization of donor data, making it more efficient for managing relationships and donations.
Nonprofits should consider investing in a DMS early on if they plan to grow. Even small organizations can benefit from a CRM as it helps streamline donor tracking, communication, and fundraising. Tools like Little Green Light offer affordable plans, making it possible for nonprofits to start small and scale as they grow.
A DMS helps nonprofits:
- Track real-time donor data
- Automate online donations and integrate with websites
- Segment donors for personalized communication
- Monitor donor engagement, such as email opens and giving history
- Streamline tax receipts and donor acknowledgment
A DMS centralizes donor information, making it easy to track communication, donation history, and personal preferences. By having a complete view of a donor’s interactions with your organization, you can personalize outreach, strengthen relationships, and build loyalty through thoughtful engagement.
Essential features include:
- Donor contact information tracking (name, address, phone, email)
- Online giving integration
- Email marketing and segmentation capabilities
- Relationship tracking (e.g., family connections or business relationships)
- Event tracking for registrations and attendance
Ideally, nonprofits should have a dedicated staff member responsible for managing the DMS. This person should be detail-oriented, comfortable with technology, and able to consistently update and organize donor information. Smaller nonprofits may assign this role to a data-savvy employee or volunteer.
Implementing a DMS can lead to significant fundraising growth, often doubling or tripling donations in the long run. By centralizing data and automating processes, nonprofits can more effectively manage donor relationships, segment outreach, and improve the overall donor experience, leading to higher retention and larger donations.
Start by asking questions about pricing, hidden fees, and features. Many affordable options are available for small organizations, with entry-level plans costing around $500 per year. It’s important to balance cost with the features that will best serve your organization’s specific needs, such as email marketing, online donations, and donor segmentation.