How to Choose the Right Donor Database: Ultimate Guide

What is a donor database?

A donor database is a software solution that nonprofit professionals use to access insights into their supporters’ engagement histories, track key fundraising metrics, and measure success. 

Along with storing donors’ contact and demographic information, this technology helps build relationships with supporters by saving previous engagement data, such as past donations or events attended.

Benefits of a donor database

Your nonprofit might already use a variety of tools to manage donor relationships. You may wonder, “What’s the advantage of investing in another software solution on top of the solutions we already use?” A donor database offers the following benefits:

• Data centralization. Think about the multitude of interactions you have with your donors. From emails to events to personal phone calls—your donors have multiple ways to engage with your organization as you introduce them to your mission. Donor database software provides a central location where nonprofit staff members can find information regarding each of these interactions.
• The ability to personalize donor outreach. Using the information stored in your donor database, you can personalize your donor outreach materials with donors’ names, past interactions, and interests. For example, suppose you know that a supporter has attended many of your nonprofit’s events in the past. In that case, you might decide to send a personalized invitation to your next event opportunity. They’ll feel seen and acknowledged because you understand how much that particular supporter enjoys events.
• Reporting capabilities. Your donor database stores and generates reports on essential donor trends and patterns. This allows your nonprofit’s staff to take a closer look at which strategies are most effective and which aspects of your fundraising or marketing efforts need improvement. You can use this information to improve your fundraising and marketing return on investment (ROI) by focusing your efforts on the most engaged supporters and reaching out to them with targeted messages.

A donor database takes your nonprofit’s fundraising to the next level, ensuring that you can manage and grow supporter relationships sustainably over time.

Features to look for in a donor database

Now that you know the advantages that a donor database can offer, it’s time to choose the right solution for your nonprofit. There are three major considerations when searching for a new donor database: common, special, and nonprofit-specific features.

Common donor database features

To effectively keep donor data organized, manage reports, and enable data segmentation, you should look for a donor database with the following necessary features:

• Robust supporter profiles. Use robust profiles to manage information about your supporters, including their donation histories, volunteer hours, sponsorships, grants, and more. Leverage information in these profiles to build relationships with your supporters and encourage continued engagement.
• Segmentation. According to research from Epsilon, 80% of consumers are more likely to make a purchase when brands offer personalized experiences. Segmenting supporters based on information in each donor profile helps provide a more personalized experience. For example, an animal shelter might have a segment of supporters who prefer dogs and another for those who prefer cats. They might use different marketing messages and imagery to appeal to each group. Bloomerang’s segmentation eBook can provide more insight into smart ways to segment your database if you’re just getting started.
• Scalability. The solution you choose should have options to scale up or down depending on your nonprofit’s needs. This ensures you can continue using the same solution as your nonprofit continues to grow. You can simply level up your donor database solution to gain access to the additional records or functionality your nonprofit needs.

These are standard features that your organization will find in any quality donor database. If a donor database doesn’t have these features, steer clear. Chances are, you’ll grow out of the solution very quickly.

Special donor database features

In addition to these necessary features, your nonprofit should also keep an eye out for the unique features of each platform that help maintain long-lasting donor relationships. Here are a few additional features that will support your nonprofit’s goals:

• Giving potential. When it comes to requesting a donation, your donor database should keep track of potential major gift opportunities. When your donor database harnesses the data from a trusted prospect research provider, you can effectively illustrate a prospective donor’s giving capacity and propensity to donate to causes like yours. For example, Bloomerang offers a generosity score feature that uses publicly-available wealth data to identify potential major donors or donors who are likely to increase their giving amounts.
• Engagement meter. An engagement meter provides a quick at-a-glance view of the engagement level of each supporter. This shows how often they interact with your organization, allowing you to re-engage supporters at risk of lapsing. On the other hand, you can reach highly engaged supporters for additional or higher contributions.
• Email marketing. Designing emails directly in your donor database makes it easy to use the segments you’ve created to their fullest extent. Draft and design your email based on targeted group interests, then send it out directly to the desired list of constituents.
• Goal progression. Look for a solution that offers the flexibility to set success metrics that are meaningful to your community and its goals. Be sure you can track your fiscal YTD progress, which is your nonprofit’s progress toward exceeding last year’s fundraising and engagement goals.

Platforms like Bloomerang offer these special features built-in so you can easily leverage these tools to identify new fundraising opportunities and reach supporters with personalized messages.

Nonprofit-specific donor database features

Because every nonprofit is different, there may be some tools that you’d benefit from, while other organizations won’t see the same positive results.

To determine the unique list of features that will benefit your specific organization, follow these steps:

1. Take inventory of your current software. Are you currently taking full advantage of your existing investments? What features of your current software solutions do you like the most?
2. Identify the functionality that is missing from your current software strategy. What are your pain points?
3. Decide what features will fill the holes in your current strategy. Write them down and ask about them during demos.

Identifying your nonprofit’s most essential features will help keep you organized and focused as you develop lists of potential solutions and narrow them down.

How to find the right donor database

Now that you know what to look for, you’ll be wondering how to find it. There are many nonprofit donor databases out there, all claiming to be the best. So how can you decide which one is the best choice for your organization?

The short answer? Research.

You’ll need to conduct a lot of research about your organization’s needs and the various systems available to decide which one is the right choice. Here are the research steps we suggest:

1. Divide potential features that you’d like to see in your new donor database into “needs” and “wants” lists. Your needs should be the must-haves in a donor database. That way, as you conduct research, if a potential solution doesn’t have some of the “needs” on your list, you can immediately eliminate them from the prospective solutions.
2. Start compiling a list of top options. You don’t need to be too specific about the solutions you list here. It’s simply a starting point for your research. Search the web and check referral pages to get a sense of the solutions on the market.
3. Eliminate any donor database that doesn’t have everything on your “needs” list of features. Comb through your major list of databases to develop a shorter list of potential solutions that include all of the features you need to have. Now, you’ll be left with many solutions that could work for your organization.
4. Compare these solutions with your nonprofit’s budget. If any solutions are drastically over your budget, eliminate them from the list. A solution that you can’t afford (or one that you know you won’t be able to afford in the future) will only decrease your overall ROI. We’ll dive into the budgeting process more deeply in the next section.
5. Compare software features for the remaining solutions with your organization’s “wants” list. Identify the solutions with all of your “needs” and most of your “wants.” After you’ve eliminated those without a good number of your “wants,” you’ll be left with a concise list of possible solutions.
6. Schedule demos for your shortlist options. Before joining these demos, create a list of questions to ask the team of software experts. Be sure to ask these questions in every demo and reach out after the demo concludes if more questions arise.
7. Choose your solution! After you’ve had demos of each software (potentially more than one for your favorites), you should be ready to pick the software that is best for your nonprofit.

It does take a lot of time to conduct the necessary research to choose a donor database. However, that time is well worth it to spend up-front because the right solution will serve your nonprofit effectively for years to come.

How to budget for your donor database

Nonprofit budgeting is a necessary but sometimes complex step of the software buying process. Organizations often struggle to create a concrete budget because of the highly variable nature of donations, grants, and other such funding.

Let’s take a closer look at some budgeting considerations before you invest in your new platform.

Free donor database software

The challenges associated with budgeting can make it incredibly tempting to look into a “free” donor database. The temptation of free donor database solutions can be especially significant for nonprofits just getting started.

However, there are some pros and cons that you should consider before test-driving a solution that is advertised as free.

• Pros: The significant advantage of a free donor database solution is that it provides a trial version for your organization to use the tools without the risk of losing money. You can start at the free level of a scalable solution to see how you like it. However, you probably won’t stay at this free level due to limited features and capabilities. Check out the next tier of payment and work that into your budget, as you’ll likely need to scale up relatively quickly.
• Cons: Donor database software that advertises itself as free frequently needs extensive customization, which can require outside help. Downgrading to Excel sheets or other “free” solutions may lack security, features, accessibility, and support.

When it comes to software, always think of free options as trials. You’ll still need to incorporate any costs associated with scaling up the solution into your final budget.

Steps to develop a donor database budget

The first thing your organization will need to do is determine your current financial situation. You can do this by analyzing your organization’s balance sheet. Make sure you’re financially stable before deciding to make a long-term investment like that for donor database software.

After you’ve determined your nonprofit’s current financial standing, you should find the actual cost of a new software solution. The true cost of the solution will include all of the following:

• The monthly or annual fee for software access.
• Any implementation costs
• Training costs for your staff members
• Consultation costs
• Installation costs for solutions hosted on-premise rather than cloud-based

Once you’ve determined your solution’s true costs, you can work them into your nonprofit’s annual budget.

3 tips to make the most of your donor database

After investing in a donor database system, you want to ensure you’re doing everything you can to make the most of the system and achieve a high ROI. We’ve compiled a list of top tips to ensure you’re using your donor database software to the fullest extent possible:

1. Leverage integrations

When you invest in a new donor database, it’s essential to consider how that solution will fit into your existing software strategy. That’s why it’s helpful to search for software that offers multiple integrations.

Integrations enable seamless data flows between different platforms to ensure you can leverage donor information across multiple systems. For instance, integrating your donor database with a peer-to-peer fundraising platform allows your organization to streamline the creation of new donor profiles in your database as new supporters give to the campaign.

Your database solution should seamlessly work with a variety of other tools, including:

• Fundraising tools
• Matching gift software
• Email marketing platforms
• Prospect research tools
• Accounting software

These integrations allow you to minimize manual data input as much as possible to save time for what matters: your mission.

2. Use built-in automation tools

Automation can help your organization save time. Automating processes using the data stored in your donor database will help make informed choices, reduce your manual workload, and increase your fundraising ROI.

For example, you can automatically send thank-you messages to your supporters after they give or save donor data directly to the right profiles when supporters give to your organization.

Keep in mind that the key to automation is clean data. Practice effective data hygiene to keep your data organized, accurate, and complete. Follow these steps to implement useful data hygiene regulations:

• Regularly scan your database for duplicate profiles.
• Run your system through the NCOA to discover address changes and deceased individuals within your network (many top-of-the-line donor databases, like Bloomerang, will do this automatically)
• Create standardized processes for inputting data like email addresses, phone numbers, and home addresses.

Taking these steps will improve your data’s accuracy, helping you increase your ROI by ensuring that you’re reaching real people with your message.

3. Track overarching progress

Individual profiles are one of the most valuable tools in your donor database for maintaining personal connections and relationships with your supporters. However, to make the most out of your solution, you should also track your organization’s overall progress toward your predetermined goals.

There are two primary ways you can leverage your donor database to analyze organizational progress:

• Customized reports. After discussing your goals and metrics, you can create custom report templates to measure progress and report back to your team.
• Your dashboard. Customize your donor database’s dashboard so that you can check in on progress every time you open up the system. For example, you might include your donor retention rate, current fundraising campaign revenue, and other metrics that are most relevant to your goals.

When you track your metrics and goal progression using your donor database, all of your data will be stored in a single place, making it easy to find at any point as you work through your strategic plan.

7 top donor database solutions to consider

To help kick-start your donor database research, we’ve compiled a list of seven top solutions to consider:

1. Bloomerang

Bloomerang’s donor database offers all of the features that nonprofits need in their day-to-day activities, plus additional special features to level up their fundraising. The software solution is rooted in the technical expertise of world-renowned fundraising consultants and practitioners.

Bloomerang has been developed specifically to improve donor retention and relationship-building strategies for nonprofits.

Bloomerang’s unique features include:

• Comprehensive donor profiles designed to track all supporter interactions. You can track engagement using a timeline to get a visual representation of your nonprofit’s supporters’ involvement. Measure email open and click-through rates, volunteer hours, donations, and more. Then, Bloomerang will develop an engagement score for each supporter to help you identify your most engaged donors to reach out to and cultivate strong relationships.
• A wealth screening tool. In partnership with DonorSearch, Bloomerang offers a comprehensive wealth screening tool to identify prospective major donors and sort donors into groups based on giving capacity. This allows you to make the most of the giving opportunities present in your current supporter base.
• A communications audit tool. This tool counts the number of times you use the word “you” versus first-person “I” or “we” language. You want to use “you” at least twice as frequently for effective communication. You can also measure the reading level of these messages to make sure your content is accessible to your target audience.
• Training and support through Bloomerang Academy. This resource offers additional training, tips, and tricks whenever you need them. Training videos will help you take advantage of the advanced features offered as a part of Bloomerang’s donor database. This tool is in addition to the free email and chat support provided by the Bloomerang team.

Bloomerang’s expert knowledge about and passion for the nonprofit space means their donor database software goes above and beyond the average solution.

Plus, Bloomerang’s donor database integrates seamlessly with its fundraising platform. That means users who leverage both the donor database and online fundraising tools can easily capture all donor data from their digital donation page, automatically add it to new or existing donor profiles, and use the data to further personalize their supporter outreach.

2. Salesforce

Salesforce is a popular CRM option for nonprofit and for-profit organizations alike. You can build out this extremely customizable solution with various apps and integrations to provide the additional functionality your organization needs in a complete Salesforce ecosystem.

While this solution is often well-suited for large organizations, smaller nonprofits might consider starting with different software for their first donor database. Salesforce can be expensive to customize, often requiring a consultant or tech expert to help create the perfect solution. Once you build it, it offers everything a nonprofit needs for success, but configuring it requires a higher up-front cost that many organizations find difficult to afford right off the bat.

3. Charity Engine

CharityEngine is an “all-in-one solution” for donor management. Their mission is to provide all the tools that nonprofits need for success so that organizations don’t have to worry about purchasing multiple software solutions for each activity. This means that in addition to a donor database, CharityEngine offers online donation pages, peer-to-peer fundraising, email marketing, a website builder, advocacy software, and more.

4. Neon CRM

Neon CRM is a cloud-based donor database that is a part of the Neon suite of tools. This solution offers features that enable nonprofits to manage donors, members, and fundraising campaigns. The solution’s fundraising tools make it simple to track relevant fundraising KPIs and make strategic adjustments as needed. Neon also has specialized tech consultants on hand to help you get set up with their solution.

5. Little Green Light

Little Green Light offers donor management software to manage donors, volunteers, and members from one platform. Their donor database tools include constituent profiles, goal-tracking for activities like major gift asks and grant proposals, and customizable reports. Little Green Light offers a 30-day free trial for new users looking to test out the platform and see if it’s right for them.

6. Blackbaud Raiser’s Edge NXT

Blackbaud Raiser’s Edge NXT is a donor management platform that prioritizes high ROI for its users. Raiser’s Edge NXT offers AI-powered suggested donation amounts, end-to-end gift management, and prospective donor insights to help unveil hidden fundraising potential within your donor group.

7. DonorPerfect

DonorPerfect’s donor database is designed to help nonprofit professionals save time, raise more, and connect with their supporters on a deeper level. Their software acts as a fundraising hub for multiple campaign types, including annual appeals, crowdfunding, monthly giving, and more. The DonorPerfect platform is also customizable so nonprofits can display the data and reports that are most relevant to their strategies.