All too often, nonprofits see their donor database as a glorified phonebook. This may be because they’re not getting the most out of the software or because the solution in which they’ve invested doesn’t have the expansive functionality the organization needs.
When nonprofits invest in the best donor database and use it properly, this software becomes the most valuable asset for the nonprofit. Before diving deeper into this idea, let’s cover the basics: what is a donor database?
What is a donor database?
A donor database is a software solution used by nonprofit professionals to provide insights into the engagement of your supporters, track key fundraising metrics, and measure nonprofit success.
Today’s donor database software is more than just a passive list of names. While it does store the important contact and demographic information of donors and constituents, this technology is designed to do so much more!
Not only does it store the information about past donor metrics, but donor database software is also designed to facilitate effective future communication and relationship-building strategies.
This buyer’s guide is designed to help your nonprofit choose the best solution for your organization in order to get the most out of your investment. We’ll cover topics like:
- The benefits of investing in a donor database.
- What to look for in your donor database.
- Donor database budgeting techniques.
- How to get the most from your donor database.
- Consider Bloomerang’s top donor database software.
Make sure your nonprofit is ready to make this important investment decision! Let’s get started.
Benefits of a Donor Database
As we stated before, a donor database is more than an old fashioned Rolodex. However, the software does have a major benefit in common with this historic solution. Both your donor database and your Rolodex provide a method of organization for cleaner data.
Frankly, the advanced technology available through your donor database makes it much more effective than your Rolodex. But it’s the same idea. Your donor database is used to store and keep up with emerging data about your supporters.
Think about the multitude of interactions you create for your donors. From emails to tweets to events to personal phone calls—your donors are (or should be) getting repeated touches as you steward their relationships with the mission of your organization.
Donor database software provides a clear location where your nonprofit can go to find information regarding these touches. Storing the data points is crucial for building a picture of the constituent’s engagement with your mission and your organization. You want that picture to be as rich as you can to ensure you have a complete view of the relationship.
While this takes care of the “database” portion of the term “donor database,” the software itself takes it to the next level. It’s also used to facilitate better communication strategies and streamline organizational operations for your nonprofit.
Your donor database can facilitate better communication strategies.
What’s the use of collecting information about your supporters if you never use it? The best software helps nonprofits take the next step in the communication process with donors. Instead of simply providing information for communication, it provides the tools to use and facilitates the process of doing so.
Your donor database should have tools for communication such as:
- Segmentation. Segmenting supporters helps provide a more personal experience when it comes to communication. Create segments based on the information you have stored in each donor profile. Bloomerang’s segmentation ebook can provide more insight as to smart segments for beginners.
- Email design. 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.
- Direct mail. In the same way that you can create emails directly in your donor database, be sure you can also create direct mailings. This form of communication is still alive and well, especially when it comes to solicitation letters.
Be sure when you send electronic messages, you’re able to track the successes of those communications. An analytics dashboard should show information such as that in the image below:
When your organization has the tools to communicate with your supporters, you can immediately and effectively put to use the data you have stored in your donor database.
Your donor database can streamline nonprofit operations.
Automation is useless without data. As explained in our analysis of the dangers of too much automation, automation isn’t necessarily good nor evil. It’s a tool that can be used to help your organization save time.
Consider if your lawn mower could save the patterns of your mowing habits in order to cut your grass automatically the next time around. You could save a lot of future time by mowing your grass incredibly well once. However, when automation is used incorrectly, it’s like saving the grass mowing patterns of a 6-year-old. Instead of those beautiful straight lines that you’d want on your lawn, you’d have patches and irregularities all over the place.
When you automate with data to inform decisions, you get the beautiful results you were aiming for. That’s why automation options always require the use of your donor database—it’s where you store this imperative data.
Use your donor database to effectively use your data and streamline communications using automation tools. This will help save your nonprofit time and energy that’s better spent on other aspects of your mission.
What to Look for in Your Donor Database
Now that you know the benefits of an effective donor database, it’s time to consider how to choose which database will be effective for your nonprofit. There are two major considerations that your nonprofit should think about when it comes to looking for features of a database: What general features should you look for? What features will be necessary for your specific organization?
What general features should you look for in a donor database?
While every nonprofit is different, there are some features that all nonprofits need from a donor database. We’ve already touched on some of these features such as:
- Robust donor profiles. Donor profiles are where your organization stores information about each individual donor and their interactions with your organization. It is from this information where you will assign segments and navigate communications.
- Communication tools. Be sure your donor database has capabilities for various communication platforms, from email to direct mail. Use segmented lists to reach out directly to supporters with targeted messaging and custom designs.
- Fundraising dashboards. This is one we haven’t touched on yet. A fundraising dashboard is used to help your organization keep track of metrics and campaigns. You can easily see how various aspects of your strategy are performing and adjust your strategy as necessary.
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 regret the investment or very quickly grow out of the solution.
In addition to these necessary features, your nonprofit should also keep an eye out for the features that will benefit any organization but may not be as standard. These features indicate an excellent solution that will help your organization maintain data for years to come. Some of these features include:
- Scalability. Be sure the solution you choose has 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 scale up your donor database solution to gain access to the additional records or functionality your nonprofit needs.
- Giving potential. When it comes to making an ask, your donor database should be tracking data that paints a picture of your community’s giving potential. When your donor database harnesses the data from a trusted prospect research provider, you can effectively illustrate a person’s giving capacity and their propensity for donating to causes like yours through wealth and philanthropic indicators. At Bloomerang, this is considered a Generosity Score.
- Goal progression. Your nonprofit should look for a solution that offers the flexibility to set success metrics that are meaningful to your community and its goals. Otherwise, you’ll be perpetually analyzing different metrics to determine whether or not you’re on the right path. Be sure you can track your fiscal YTD progress (your nonprofit’s progress toward exceeding last year’s fundraising and engagement goals) and donor pyramids (tracking progress toward growing your different donor ranges so you can see your community grow in the right direction over time).
An example of goal progression systems is the Sustainability Scorecard feature from Bloomerang. This analysis combines data from your Bloomerang donor database with quarterly surveys to help track your nonprofit’s progression toward its goals. Bloomerang presents donor pyramids in the Scorecard to see how close you are to reaching last year’s range goal by individual donors or across organizations.
While we call these features “general,” they’re anything but ordinary. We employed this term because generally any nonprofit will benefit from access to these tools. Any nonprofit can use them and see a positive ROI from doing so. However, because all nonprofits are different, you may benefit from more specific features as well that will apply specifically to your needs.
What donor software features does your specific nonprofit require?
While we wish we could tell you exactly what tools your specific nonprofit needs, that’s something only your team can decide. 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.
For instance, a nonprofit with a community of Millennial donors will benefit more from a Twitter social listening hub than a nonprofit whose community consists of the elderly.
You should be aware of these features so that you know what scale or solution will have more than what you need (or not enough). Plus, this list helps you avoid getting distracted by tempting bells and whistles during software demos.
In order to come up with this list of features, your nonprofit must follow a few key steps:
- First, take inventory of your current software. What do you have access to? Are you currently taking full advantage of your current investments?
- Second, decide what functionality is missing from your current software strategy. Is there something missing?
- Finally, decide what features will fill in those holes that you’re missing in your current strategy. Write it down and keep it with you for demos.
Carefully examine the features of the software solutions your nonprofit considers to see if they’ll solve your general and specific needs.
Donor Database Budgeting
Budgeting can be a somewhat tricky topic for many nonprofits. Organizations struggle to create a budget because of the highly variable nature of donations, grants, and other such funding.
Hint: Try looking for donor software that focuses on donor retention and recurring gifts to help stabilize any budgetary issues.
Until you have your new software, it’s not impossible to create an effective budget or to launch a campaign to raise funds for the investment. But first, we’ll go over the dangers of the free donor database.
Free Donor Database
Due to the difficulty of budgeting and the generally tight nonprofit budgets, free donor database software may sound like a tempting idea. There are some pros and cons to this free software, however. So be sure your nonprofit is prepared for the solution to not be free in the future.
Pros: The major advantage of a free donor database software solution is that it provides a trial version for your organization to use the tools without risk of losing money. You can start off at the free level of a scalable solution to see how you like it. However, you should never expect to stay at this free level due to limited features and capabilities.
Cons: Donor database software that advertises itself as free, such as Salesforce, frequently needs extensive customization in order to be effectively used by the organization. Plus, these solutions tend to be difficult to use and customize, meaning the organization will need outside help to use it, which can also get expensive. Downgrading to Excel sheets or other “free” solutions may be lacking in security, features, accessibility, and support as well.
When it comes to software, always think of a free option for the solution to be on a trial basis only. You’ll still need to create a budget for scaling up later on if you decide you like it.
How to Develop a Budget
If you’re like most nonprofit professionals, you’ll probably find it very tempting to skip this section completely. Budgeting is no fun. But it’s incredibly important! It’s going to take some hard work from you and your team.
The first thing your organization will need to do is determine your current financial standing. You can do this by analyzing your organization’s balance sheet. Make sure you’re in a place of financial stability before you decide 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 true cost of a new software solution. The true cost of the solution will include the cost of the software in addition to other expenses such as:
- Any implementation costs
- Training costs for your staff members
- Consultation costs for complicated solutions
- Installation costs for solutions hosted on-premise rather than cloud-based
Once you’ve determined the true costs, you can work it into your nonprofit’s annual budget. Be sure to estimate the realistic additional fundraising revenue you anticipate receiving as a result of the investment.
Getting More From Your Donor Database
When you’re investing in a donor database, it’s important to consider how that solution will fit into your existing software strategy. The best solutions will be those that either seamlessly fit in already, or will fit in seamlessly if you’re considering a complete tech overhaul.
We’re talking about integrations, of course.
Integrations help your organization streamline the input of data into your donor database from other software solutions as well as the use of that data for better use of those other solutions.
For instance, integration of 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.
Consider how your fundraising, accounting, prospect research, CMS, and other software solutions will fit together before making an investment. You’ll want to minimize the manual input of data as much as possible to save time for what really matters: your mission.
Consider Bloomerang’s Donor Database
Bloomerang’s donor database software offers all of the features that nonprofits generally need in their day-to-day activities. The software solution combines the expertise of fundraising professor Adrian Sargeant, the communications best practices of author and speaker Tom Ahern, digital marketing insights from trusted thought-leader Kivi Leroux Miller, and technical expertise of industry veteran Jay Love.
With insights from these four experts, Bloomerang has been developed specifically to improve donor retention and relationship-building strategies for nonprofits.
Bloomerang takes each of the features we mentioned above to the next level. For instance:
- The extensive donor profiles offered as a part of the donor database are designed to track all nonprofit engagement. You can even track the engagement on a timeline to get a visual representation of your nonprofit’s supporters’ involvement. Track email open and click-through rates, volunteer hours, donations, and more. Then, Bloomerang will develop an engagement score for each supporter to help you understand who needs a little extra attention.
- Run the Ahern audit on communication documents such as your email drafts or direct mail. This audit counts the number of times you used 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 for these messages to make sure your content is accessible to your target audience.
- Bloomerang offers a free solution option to get your organization started. You can use this free option as a test-run to see how you like the solution before committing to investing your nonprofit’s precious resources towards the software. Once you’ve decided you love our software, you can choose the scaled solution that’s right for your nonprofit according to your specific donor database needs.
- You’ll gain access to Bloomerang Academy with the software so that you have additional training, tips, and tricks whenever you need them. These videos will help you best take advantage of the advanced features offered as a part of Bloomerang’s donor database. This is in addition to the free email and chat support provided by the Bloomerang team.
- Bloomerang has integrations available with other leaders in the nonprofit tech space. For instance, you can integrate your software with DonorSearch for wealth screening and Qgiv for peer-to-peer.
Bloomerang’s expert knowledge about and passion for the nonprofit space means their donor database software goes above and beyond the average solution. You can get more from Bloomerang!
This donor database buyer’s guide should only be the beginning. Your organization needs to conduct a lot of research to truly feel comfortable and confident with the solution you choose. Be sure to keep Bloomerang in mind as you conduct this research and keep a list of potential solutions to contact for a demo. To jump-start your research process, check out these articles below:
- Buying Fundraising Software: 6 Important Factors to Consider. For more information about the software purchasing process and what to look for, check out our other article on the subject.
- Top 9 CRM Software Solutions for Nonprofits. Looking for a referral for the top solutions out there? This re:Charity article will get you started.
- Bloomerang’s Homepage. Did Bloomerang’s advanced donor database solution sound like something your organization needs? Explore our website further!