Q&A With Veteran Fundraisers
This past week, I sat down for a Q&A with Software Advice’s Nonprofit Market Researcher Janna Finch. They have a great repertoire of tools and tips for non-profits to fundraise and they do a lot of great research around non-profit fundraising. Let’s check out some of their thoughts:
1.) What are the main reasons nonprofits look to implement fundraising software?
The majority of software users we speak to represent small nonprofits with operating budgets under $500,000, in organizations of that size, there’s usually little left in the budget after payroll and program costs for specialized fundraising and donor management software, so many nonprofits just make do—tracking and reporting on constituent data manually or struggling along with software that’s over a decade old.
For these buyers, it takes a crisis—such as a staff member quitting, a crashed hard drive, or staff working 70-plus hour weeks for too many months—to drive them to find time and room in the budget to get a formal system in place.
2.) What are the top three things a nonprofit leader should consider when evaluating technology?
First, it’s a good to write down exactly what you need software to handle. Some examples include ‘automatically generate 3,000 annual giving statements and email them to recipients,’ ‘support recurring donations,’ and ‘integrate with our current fund accounting software.’
Next, familiarize yourself with the software pricing models and total cost of ownership (TCO). Perpetual and subscription pricing models are the most common. With a perpetual license, you typically pay a larger amount upfront to cover the license and set-up fees, than a smaller amount (around 20 percent of the license cost) annually for periodic upgrades and support. With subscription pricing, those same costs are spread out and paid for in smaller amounts monthly or annually for as long as you use the software. Subscriptions often start around $50 a month, but can scale much higher.
You also need to ensure that everyone who needs the software can use it. To do this, take advantage of vendors’ demos and free trials to give the software a test-drive before committing. It may look like the perfect solution on paper, but hands-on experience may uncover that it has a learning curve greater than expected. If that’s the case, look at different software or add training costs to your budget.
3.) What are the key capabilities that fundraising solutions should provide for a nonprofit?
Automating processes to increase efficiency is the main reason for implementing software. Therefore, the key capabilities a nonprofit needs in software will vary between organizations based on which areas of efficiency they’re looking to improve upon.
Every nonprofit, however, can benefit from a fundraising and donor management system that lets them maintain donor profiles, keep track of donations and interactions (such as phone calls, emails and letters sent to them), and generate reports on donor demographics, contributions and other activities.
Most Used Features of Donor Software
4.) What’s the most common challenge experienced with fundraising software, and how can users avoid it?
In our survey, 67 percent of fundraising software users reported two main challenges: a higher-than-expected learning curve and a lack of customization options. Fortunately, a little research and planning can prevent these issues.
Taking advantage of demos and free trials so everyone who needs to use the software can take it for a ‘test-drive’ will help you gauge how easy or difficult it will be to adopt it into existing workflows, and whether or not formal training will be needed.
And if you have a comprehensive list of requirements, run through each item with vendors to ensure that the system can support everything you need it to do.
Top Challenges with Fundraising Software
I hope this helps us as we think through different fundraising solutions at our non-profits! Join the conversation below by commenting on the following: what fundraising solutions have you tried at your non-profit?