Donor Management Software: A Buyer’s Essential Guide

Donor Management Software: A Buyer’s Essential Guide

Your nonprofit juggles all sorts of information. You have information about your donors, the gifts they give, restrictions on those gifts, and more. Keeping it all straight may seem like a challenge, especially for a small organization trying to grow.

Luckily, nonprofit donor management software is specifically designed to help keep your nonprofit organized. However, each database is designed with a slightly different purpose in mind. This guide is designed to walk you through the most important features of donor management software before you buy.

What is Donor Management Software?

 

Donor management software is a software solution designed to help your nonprofit store and analyze donor data in order to take the next best steps in building relationships with donors.

Sometimes called a CRM (borrowing the “customer relationship management” acronym from the for-profit world, but replacing “customer” with “constituent”) or a DRM (“donor relationship management”) system, your donor management software should ideally house all of the information pertaining to those who support your organization. Donor CRMs can also include features of other stand-alone nonprofit software solutions, like online giving software, survey software, and wealth screening software.

 

Buying Your First Solution

 

When you’re looking for a solution for your nonprofit, don’t just choose the first cheapest or free fundraising software solution you find. Conduct extensive research to make sure the solution you purchase:

  1. Has an effective donor database.
  2. Helps your nonprofit streamline data.
  3. Supports communication with constituents.
  4. Generates metrics to keep your organization moving forward.

The donor management software you choose shouldn’t just be a passive bucket of names and addresses. It should help you build all-important relationships with donors. These relationships will lead to higher donor retention and better future engagement with supporters!

 

Feature 1: Effective Donor Database

 

The storage of donor data in a comprehensive database is a key component of your donor management software. It helps you make personal appeals to these donors for a better return on your fundraising asks. Your donor database should measure more than simple demographic and gift information: it should also store all of the important engagement metrics for each donor.

 

Gift Details

 

While most nonprofits know how important it is to gather details about a gift in their CRM, many still aren’t saving enough information. In addition to storing information about the date and amount of a gift, your organization should store:

  • The method of giving.
  • Communication preference.
  • Acknowledgment information.
  • Interaction notes.

With all of these details regarding the gifts given to your organization, you can better track the average giving amount in order to personalize your fundraising asks in the future.

 

History

 

Look for a donor management system that offers an easy way to see the historic interactions that each donor has had with your organization. For instance, Bloomerang’s donor management system has a timeline feature under the profile of each supporter.

On this timeline, your organization can get a quick overview of the frequency of giving, communications, notes, and other engagement metrics.

A donor’s history with your organization gives a good indication of their involvement levels. With this information, you’ll notice the donors who are becoming disengaged with your nonprofit and have the ability to reach out to them to save the relationship.

 

Volunteer Information

 

An engagement factor that is often glanced over by many nonprofits is the time that supporters spend volunteering for your organization. You should have an effective way to store this information in the individual profiles of these donors.

While you could spend hours manually typing in all of this information for each volunteer, it’s much easier to just ask them. Be sure to contact supporters interested in volunteering in the future as well as past volunteers to gather information. Ask them to fill out a:

  • Constituent information form. This form can give you access to what type of work the volunteer enjoys doing and their available hours. This way, you can reach out to volunteers who are best suited to meet the needs of your organization.
  • Volunteer activity form. Ask supporters to fill out one of these forms every time they volunteer. This way, you can track volunteer hours for each constituent. Plus, with the right software system, this will create a new engagement on the donor’s timeline.

Look for a donor database that offers these types of forms so that you can measure the time donated to your organization in addition to the funds.

 

Supporter Relationships

 

Supporter profiles should make it easy for you to find information about the relationships between your donors. For instance, your database should be able to record relationships among the supporters in your database (friends, family, co-workers, and more). It’s also helpful when your database recognizes two constituents who both live at the same address.

Tracking supporter relationships is incredibly helpful for searching for major giving opportunities because you can reach out through existing contacts and trusted connections.

 

Feature 2: Streamlined Data Collection

 

Because your donor management software is designed to help you manage the data your organization collects, it makes sense that your software solution should help you streamline the data collection process itself.

There are two major ways to streamline the collection of information: first, you can find software with all of the features built in; second, you can find a software solution that integrates with other top software for a comprehensive system.

There are advantages and disadvantages to each of these approaches:

  • Software with built-in important features tends to have more expensive up-front costs. Plus, you may end up with features that you don’t necessarily need. However, there is an easy learning curve for these types of systems because you only need to learn to use a single software solution.
  • Software integrations are much less expensive up-front because you only purchase the solutions you need. Your nonprofit does benefit from choosing solutions that are all highly specialized in a particular function with integrations. However, it may take more time to learn about each of the software solutions separately. And all of the fees for each individual system can add up.

You may choose to integrate your donor management software with solutions such as your nonprofit’s website, online giving, and prospect research software.

 

Website

 

Your nonprofit’s website is the central hub of information for your constituents to learn more about your nonprofit. It is also where donors submit donations, register for events, sign up for emails, sign up to volunteer, and more.

When your website is connected to your donor management software, any information that supporters provide through these channels on your site will flow directly into their profile in your database.

Make sure you find a donor management software that has the ability to connect transaction processors between the two systems. That will enable payment information to be collected on your site and imported directly to your database.

This direct transfer of information makes the collection process much easier for your organization. No longer will you need to worry about manually transferring or importing information from one software system to another!

 

Fundraising Pages

 

Using a fundraising page that collects important information from your supporters and stores it directly in your donor management software helps ensure that your organization is accurately and effectively importing information.

Look for a software solution that helps your nonprofit create and store information from:

  • Online donation pages.
  • Crowdfunding campaigns.
  • Peer-to-peer fundraising pages.
  • Matching gift records.

Check out re:Charity’s list of top online donation tools to learn more about getting started with online fundraising software.

 

Feature 3: Supporter Communications

 

Your donor management software can help you save time by helping facilitate communication with your supporters. Find software that helps your organization send and track the communications you have with your supporters. Look for a solution that facilitates emails, direct mail, and face-to-face conversation.

 

Email

 

Email is a key method of communication because it is sent quickly and directly into your supporter’s inbox. With donor management software, you should assist your email marketing technique with:

  • Segmented donor lists. Make sure you can break your donor list into smaller segmented lists based on commonalities between each of the supporters. For instance, you may choose to segment based on the preferred method of giving or location.
  • Email drafts and previews. You should have access to methods of drafting and previewing your email content before you sent it. Choose a donor management software solution that allows you to view emails in desktop, tablet, and mobile views to be sure it’s ready to send.
  • Personalized content. Personalize your emails by automatically populating the donor’s name into the introduction. This will help you make connections with the donor. Incredibly helpful solutions will also help you conduct the “you” test to make sure you limit the number of times you use words like “I” and “we” in email content.

Whether you’re sending a fundraising letter or an email newsletter, access to email communication tools in your donor management software can help you better reach your donors.

 

Direct Mail

 

Just as you should have access to software features to help you draft emails in your donor management software, you should also have access to features that will help you draft direct mail to your supporters.

When you’re sending direct mail, you’ll want access to features that make it easy to select and edit a letter template, auto-populate personal and gift information into the content, and automatically print the letter and envelopes.

After creating these letters in your donor management software, be sure to track the direct mail interaction in your donor’s profile. The best software solutions track this information automatically.

 

Face-to-Face Conversation

 

While additional technology doesn’t necessarily facilitate conversation when you’re talking to someone face-to-face, it does help track the conversations you have with your supporters when you add notes to individuals’ profiles.

Be sure to purchase a donor management software solution that empowers your staff members to take notes in the profiles of your organization’s supporters. Encourage your major gifts officer and those in other communicative positions to take notes from their conversations directly in the software solution.

With conversation notes stored in this central location, it’s easy for fundraisers to pick back up with supporters from one conversation to another. This makes tracking major gift prospects that much easier.

 

Feature 4: Metric Generation

 

When your nonprofit makes its decisions, a lot of information probably goes into the thought process. After all, if decisions were made haphazardly around the organization, you probably wouldn’t grow very quickly. Access to important metrics at your organization makes it easy for your nonprofit to make decisions now and into the future.

Some of the important metrics for your organization to keep an eye on include retention rates, engagement, and generosity.

 

Retention Rate

 

Many nonprofits focus heavily on the acquisition of new donors, leaving untapped potential in the retention of past donors. Too many people give to an organization once but never return for another donation. Building relationships with these donors helps nonprofits lay the ground for a higher chance of future giving.

To improve your nonprofit’s donor retention, the first step is to keep a consistent eye on your donor retention rate itself. Make sure this metric is easily accessible to your nonprofit through your donor management software.

Keep this metric front and center on your software dashboard. Every time you look at the organization’s donor management software, you’ll see how your retention rate is doing. This will help keep the idea of retention in the forefront of your mind.

 

Engagement

 

Dr. Adrian Sargeant came up with an algorithm to measure overall engagement from donors. Bloomerang uses this algorithm to measure engagement for each individual donor. Engagement rates are incredibly important for the recruitment of major gift prospects and to retain a high donor retention rate.

The best major gift prospects are those historic donors who have a high engagement level with your nonprofit. These supporters are those who likely feel highly connected to the organization and have deep roots of a relationship built with it. They’re more likely to give larger amounts.  Engagement rates are incredibly important for the recruitment of major gift prospects and to retain the important retention metric that we just talked about.

Retention rate benefits from closely monitoring the engagement of individuals because you can quickly and easily identify the supporters who are disengaging with the nonprofit. Save these relationships by reaching back out to the supporter.

Look for donor management software that offers some method of measuring the engagement of each individual donor in their donor profile.

 

Generosity

 

Find a donor management software solution that integrates with prospect research software. Assigning each donor with a general generosity score is a prospect development strategy that will kickstart your search for major gifts.

For ideas about donor prospect research software providers, check out Snowball’s top picks. Conduct research to find donor management software that will integrate or support the use of your prospect research software.

Finding candidates for major giving is much easier if you start off on the right foot. Kick off your research by starting with candidates who are listed to have high engagement and generosity scores in your donor management software.

Donor management software is incredibly important for stewarding your donors in order to build relationships. These relationships lead to improved future giving and donor retention.

Pick a donor management software that will assist your organization in building these relationships. Look for the 4 essential features discussed in this article to kickstart your research.

To learn more about donor management software, check out the awesome resources below:

Author Bio

Jay B. Love is a Co-Founder and current Chief Relationship Officer at Bloomerang. He has served this sector for 33 years and is considered the most well-known senior statesman whose advice is sought constantly. He is a graduate of Butler University with a B.S. in Business Administration. Over the years, he has given more than 2,500 speeches around the world for the charity sector and is often the voice of new technology for fundraisers.

 

 

 

 

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