Donor Database: The Buyer's Ultimate Guide For 2023

All too often, nonprofits see their donor database as a glorified phonebook. This mindset shows that they may not be maximizing the use of their software or the solution they’ve invested in doesn’t have extensive enough functionality to meet the organization’s needs.

When nonprofits invest in the best donor database and use it properly, this software becomes the most valuable asset for the nonprofit. It helps optimize and maximize your fundraising and relationship-building activities. Before diving deeper into this idea, let’s cover the basics of donor databases.

What is a donor database?

A donor database is a software solution used by nonprofit professionals to provide insights into your supporters’ engagement, track key fundraising metrics, and measure nonprofit success. 

Today’s donor database software is more than just a passive list of names. While it stores the important contact and demographic information of donors and constituents, this technology helps build relationships with supporters by saving previous engagement data.

Especially during a time when we’ve all been more separated than ever before, you must go the extra mile to establish and develop lasting relationships with your supporters. Maintain contact with them and provide virtual opportunities to connect with your organization. This all starts with your donor database.

This buyer’s guide is designed to help your nonprofit choose the best solution for your organization to get the most out of your investment. We’ll cover topics like:

1. The benefits of investing in a donor database Benefits of a Donor Database
2. What to look for in your donor database.
3. How to find the right donor database.
4. Donor database budgeting techniques.
5. How to get the most from your donor database.
6. Consider Bloomerang’s top donor database software.
7. Other donor databases to consider

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. The two solutions have one important commonality: Both a donor database and a Rolodex provide a platform for maintaining clean data about your supporters.

Frankly, the advanced technology available through your donor database makes it much more useful than your Rolodex. But it’s the same idea. Your donor database stores and keeps 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 precise location where your nonprofit staff members can find information regarding each of these touches and interactions, allowing you to ensure every supporter has frequent communication with your organization. After all, the best relationships are built on effective and frequent communication, so you should be sure to fulfill this need with your supporters.

For example, suppose you know that a supporter has attended each and every one of your events in the past. In that case, you might decide to send a personalized invitation to your next virtual event opportunity. They’ll feel seen and acknowledged because you understand how much that particular supporter enjoys events.

While storing rich data regarding supporters and their interactions with your organization takes care of the “database” portion of the term “donor database,” the software itself has a lot more to offer.

What to Look for in Your Donor Database

Now that you know the benefits of a useful 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? Which 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, including:

• Robust supporter profiles. Use robust profiles to manage information about your supporters, including their donations, volunteer hours, sponsorships, grants, and more. Leverage information in these profiles to build relationships with your supporters and encourage their continued interaction.
• Segmentation. Segmenting supporters based on information in each donor profile helps provide a more personal experience for communication. For example, an animal shelter might have a segment of supporters for dog-lovers and another for cat-lovers and reach out differently according to these differing interests. Bloomerang’s segmentation eBook can provide more insight as to smart segments for beginners.
• Online giving. Powerful and customizable online giving forms can be embedded on your website for donors to contribute to. From there, their information should be streamlined into your donor database, automatically creating new records or updating an existing one.
• 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 as you need it.

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:

• 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 propensity to donate to causes like yours through wealth and philanthropic indicators. At Bloomerang, this is considered a Generosity Score.
• 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. 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, which is your nonprofit’s progress toward exceeding last year’s fundraising and engagement goals. Also keep an eye on donor pyramids which track 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. When used correctly, these features will increase your organization’s ROI and enhance your fundraising strategies. However, because all nonprofits are different, you may benefit from more specific features 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 an audience composed of Millennial donors will benefit more from a Twitter social listening hub than a nonprofit whose audience consists of the elderly.

To come up with the unique list of features that will benefit your specific organization, 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 existing 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.

After you’ve developed this list, take it with you whenever you research or demo a new solution. This practice will help keep you organized and focused as you create lists of potential solutions and narrow them down to a shortlist of software.

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 several 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 to this question is research. 

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

• Divide potential features that you’d like to see in your new donor database into separate “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.
• Start compiling a master list of potential donor databases that you can choose from. 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, ask other organizations for references, and check referral pages to determine the solutions that are out there.
• Eliminate any donor database that doesn’t have everything on your “needs” list of features. Comb through the master 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.
• Compare these solutions with your nonprofit’s budget (as we’ll discuss in the next section). If any solutions are drastically over your budget, go ahead and eliminate them. 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, which is the opposite goal of investing in a donor database.
• Compare software features for the remaining solutions with your organization’s “wants” list. The solutions with all of your “needs” and most of your “wants” should be left in your list of potential solutions. After you’ve eliminated those without a good number of your “wants,” you’ll be left with a concise list of possible solutions.
• Schedule demos for your shortlist of software. Before joining these demos, create a list of potential questions to ask the team of software experts. Be sure to ask these questions in every demo and get more information about the solutions.
• 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. Congratulations, and pat yourself on the back!

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. The alternative is that you might end up with a solution that doesn’t work for your organization, forcing you to choose a different solution, migrate all of your data again, and train on a new system. That would not only be a hassle, but it would also be costly.

Conduct research ahead of time to be sure that you find the right solution on the first try.

Donor Database Budgeting

Nonprofit budgeting is a necessary activity for organizations but can be somewhat tricky in practice. Organizations struggle to create a concrete 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 stabilize budgetary issues. 

The challenges associated with budgeting can make it incredibly tempting to look into a “free” donor database. But remember the lesson you learned in your old economics classes: there’s no such thing as a free lunch, much less free software.

Free Donor Database

The temptation of free donor database solutions can be especially significant for nonprofits just getting started. However, when you invest in a free solution, you’ll likely get what you pay for: a non-scalable solution that you will quickly outgrow. Therefore, if you start looking at free software, you can’t expect it to stay “free” for long.

This isn’t to say that “free” donor databases don’t have a place in your research process! 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 software 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 should never expect to 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, such as Salesforce, frequently needs extensive customization to be effectively used by the organization. Plus, these solutions tend to be challenging 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 lack security, features, accessibility, and support.

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 incorporating the price of scaling up the answer if you decide it’s the right choice for you.

How to Develop a Donor Database Budget

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 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 for complicated solutions
• Installation costs for solutions hosted on-premise rather than cloud-based

Once you’ve determined the true costs, you can work them into your nonprofit’s annual budget. Realistically estimate the additional fundraising revenue you anticipate receiving due to the investment to update your budget’s revenue portion.

Getting More From Your Donor Database

Once you have your donor database, you’ll want to make the most of the solution. After all, that’s why you created a budget and invested so much time and money into the software. Therefore, we’ve compiled a couple of tips that you can use to get the most out of your solution:

Look for potential software integrations.

When you’re investing in a donor database, it’s essential to consider how that solution will fit into your existing software strategy. Your solution should seamlessly work with the other solutions that you use for fundraising, marketing, matching gifts, and more.

We’re talking about integrations, of course. 

Integrations help your organization streamline the input of data into your donor database from other software solutions and the use of that data for better use of those other solutions.

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.

Consider how your fundraising, accounting, prospect research, CMS, and other software solutions will fit together before investing. You’ll want to minimize the manual input of data as much as possible to save time for what matters: your mission.

Carefully use built-in automation tools.

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 you can use to help your organization save time.

Consider if your lawnmower could save the patterns of your mowing habits 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 keeping the grass-cutting 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 the data stored in your donor database to create informed decisions, you get the beautiful results you were aiming for. 

You can automate the sending of thank-you messages to your supporters after they give or automatically save donor data directly to the proper profiles when a supporter gives to your organization.

The key to automation is clean data. Practice good data hygiene so that those patterns will work adequately as you automate various tasks at your organization. Regularly check for duplicate profiles, run your system through the NCOA to discover address changes and deceased individuals within your network.

Save reports and customize your dashboard.

Individual profiles are one of the most valuable tools in your donor database for maintaining personal connections and relationships with your supporters. However, to get the most out of your solution, you should also be sure to track your organization’s 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 the metrics, you’ll measure to reach those goals with your team, create custom report templates that you can use to measure progress, and report back to your team. By saving these report templates, you can compare the reports to one another and ensure progress over time.

• Your dashboard. When it comes to your most important goals, customize the dashboard on your donor database 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 essential metrics on this view.

Use these tools to track your organization’s wins and progress toward fundraising goals. Be sure to set these measurable objectives ahead of time to know how your metrics compare to your ultimate goals. As you progress, share these wins and metrics with your team to motivate them!

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.

Consider Bloomerang’s Donor Database

Bloomerang’s donor database offers all of the features that nonprofits generally need in their day-to-day activities. The software solution is rooted in the knowledge of world-renowned fundraising consultants, researchers and practitioners with the technical expertise of software industry veterans.

Bloomerang has been developed specifically to improve donor retention and relationship-building strategies for nonprofits with insights from these four experts.

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 an 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 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. You can get more from Bloomerang!

Other Top Donor Databases

Salesforce

Salesforce is often called “the world’s leading CRM.” It serves both 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.

SalsaLabs

SalsaLabs is a popular donor database because it’s built specifically for nonprofit organizations. This platform not only offers a comprehensive donor database solution, but it also comes with a fully equipped marketing and fundraising solution. This is what’s referred to as Salsa’s SmartEngagement Technology, and it ensures that all of your software integrates seamlessly.

If you’re looking for an entire overhaul of your fundraising, marketing, and donor database solutions, SalsaLabs is an excellent option.

CharityEngine

CharityEngine advertises itself as an “all-in-one solution” for donor management. Their mission is to provide all of 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 their donor database, CharityEngine offers online donation pages, peer-to-peer fundraising, email marketing, a website builder, advocacy software, and more.

This is another solution to consider if your nonprofit is considering a complete tech overhaul. A project like that can be challenging, though, so be sure you do additional research to make sure you’ve covered all of the bases, asked questions regarding each feature, and had multiple demos of the solution.

NeonCRM

NeonCRM is a cloud-based donor database that is a part of the entire Neon suite of tools. This solution offers features that enable your organization to manage your donors, members, and fundraising campaigns.

Neon also has specialized tech consultants on-hand to help you get set up with their solution. Keep in mind that their suite’s solutions will work best with one another rather than outside parties. Therefore, you might need to invest in this additional consulting service to either build integrations with existing solutions or switch your other solutions to their tools.

This donor database buyer’s guide should only be the beginning. Your organization needs to conduct a lot of research to feel comfortable and confident with the solution you choose. Be sure to keep Bloomerang in mind as you perform 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.
• The Essential Guide to Writing a Fundraising Plan. How will your donor database and other software solutions help you carry out your fundraising plan? Learn more about how these elements fit together with this guide.