Starting a nonprofit is very similar to starting a small business. It requires you to accurately and specifically define your mission, obtain startup fees, and jump headfirst into a brand new industry. Now that you’ve gotten your start, you’re probably wondering what the next step is. How can you really take the nonprofit from a “startup” to become an established organization?
One of the first steps you’ll need to take is bringing your management system up a notch. In order to expand your fundraising efforts and your programming, you’ll need to reach your supporters in a more effective and strategic way. This will boost your support base and allow you to raise the funds you need to establish brand recognition in the community.
Investing in your first donor database will help your nonprofit store the information necessary to build relationships in the community and build your new organization’s base of support.
Thousands of nonprofits have found their ideal donor database in Bloomerang‘s comprehensive solution. We know what nonprofits are looking for and what CRM qualities will help augment organizations. That’s why we compiled some of the commonly asked questions by nonprofits when it comes to their first donor database. This guide will answer:
- Why invest in a first donor database?
- How do donor databases work?
- How to maximize the use of your database?
- Are expensive donor databases better?
- Why consider Bloomerang?
You already took a leap of faith when you established your new nonprofit. From here on out, you’ll need to make well-informed decisions about expanding your support and growing a top-notch establishment.
Ready to get started with this research process? Let’s dive in.
1. Why invest in a first donor database?
Right now, you likely use spreadsheets to manage your nonprofit’s data. Spreadsheets are a good starting point! When they’re designed well, they can store all of the relevant information that you need to build relationships with your supporters. However, there is a downside to spreadsheets: they’re not easily scalable.
Picture the spreadsheet you created for your current donors. You probably have a dedicated column for your donor’s name, another for their donation amount, their contact information, and the date on which they gave. It might look similar to the spreadsheet example below:
However, imagine how long this list of supporters will become as you grow. You might have 50 or even 100 donors currently tracked in your spreadsheet, but what will it look like when you have 1,000? 2,000? Even 10,000? When you expand your network of support this much, you’ll find it more and more difficult to quickly find useful information about your supporters that you’ll need to build out your strategy.
This issue is eliminated with a dedicated donor database. When you invest in a donor database, you’ll gain access to new fields that distinguish your supporters. Plus, you’ll have more effective search and filter options than a spreadsheet can offer. Donor databases allow you to build out complete donor profiles composed of much more information than a spreadsheet.
For instance, you can save this type of supporter information:
- Supporter connections. Let’s say two of your supporters are married. They belong to a single household and will likely share the information they receive from your nonprofit with one another. Because you have this data point saved, you might only send one direct mail appeal to their household instead of to each supporter, saving you money as well.
- Communication interactions. When you send emails to your supporters, do you know if they’re reading them? Are they even opening them? You may have already invested in a marketing platform like Mailchimp to track these key points. But when those marketing metrics aren’t compiled with the rest of your donor profile, it’s harder to improve and optimize your strategy. A donor database allows you to integrate these solutions and see information side-by-side so that you can strategically optimize your emails and improve the marketing metrics.
- Giving potential. Do you know which donors you would talk to if you were to look for a major donation? If you have around 50 donors, you might know off the top of your head. But as you start growing your organization, it’s much harder to pick major prospects out of a crowd. Instead, you look to your data to choose prospects to reach out to. Donor databases can provide insight into your donors’ engagement history and financial capabilities so that you know exactly who to ask for major gifts and how much to ask for.
- Engagement history. Your spreadsheet might track the latest donation that your supporters gave, but there is so much more information that you can use to deeply understand your support base. For example, which campaign did they contribute to? Which events did they attend? What emails do they tend to read? Tracking all aspects of a donor’s engagement history becomes quickly overwhelming in a spreadsheet, but it’s much more manageable in a comprehensive profile of a donor database.
Another word for a donor database is a constituent relationship manager or a CRM. This name is appropriate because your database truly manages the relationship you have with your supporters. It’s where you can see the relationship grow by analyzing data.
With a CRM, you can see your supporter’s history with your organization and work with them to become more deeply invested in your cause.
Spreadsheets may be an effective starting point for your organization, but they don’t allow for sufficient growth. For that, you need to invest in your first donor database.
2. How do donor databases work?
At their core, donor databases work similarly to an old-fashioned rolodex. It stores relevant information about your supporters in individual donor profiles that you can reference when you reach out to them and for other online engagements. However, unlike a rolodex, your donor database allows you to automate various aspects of your strategy, save time, and build stronger relationships.
Create Donor Segments
For instance, do you send out the same emails to your entire support base? Chances are, as a startup nonprofit, you have a fairly homogeneous supporter population. However, as you continue to grow, you’ll acquire a more diverse population of supporters. This means different supporters will respond better to different outreach strategies. A donor database allows you to identify similar qualities between supporters and create donor segments based on those similarities.
Consider, for instance, how you’d reach out to a brand new supporter versus one who has been with you since the beginning? For a new supporter, you’ll likely want to explain your mission and introduce them to other resources (like your website and social media pages) where they can find opportunities. On the other hand, supporters who have known your organization from the beginning were likely your first visitors to these resources.
As you can see, the content that you send to these two groups of supporters differ dramatically. To solve this problem, create a “new donor” segment in your donor database and send them specific information while you create a different segment for your oldest supporters.
Automatically Save Donation Information
For the supporters with whom you’re building relationships, you need to record all of the details of their gifts contributed to your organization. When you record everything in a spreadsheet, you have to manually enter this data on a regular basis. With a donor database, there are options to automatically collect and record relevant information so that you can gain access to the information in real time.
Look for a donor database that integrates with your other nonprofit software providers. This centralizes all your data from different tools in one place. That way, you can invest in a donation page to add to your website and save all incoming information from that page directly to your donor database.
For example, Bloomerang’s donor database integrates seamlessly with Qgiv’s top nonprofit donation pages. This means you can add a Qgiv donation form to your website, and the information and donations recorded will automatically sync with your donor database. You even access deduplication features that can identify any typos or mistakes to avoid creating multiple profiles for the same donor and other errors.
Analyze Fundraising Information
A donor database does more than just create supporter profiles for your various supporters. It also allows you to analyze and keep track of your fundraising campaigns. Within your centralized database, you can create goals and track your progress toward those goals.
For example, if your goal is to retain supporters, choose a donor database that enables you to view your retention rate directly on the front dashboard of the solution. You can see this exact example in the image below.
3. How to maximize the use of your first donor database?
When you invest in your first donor database, you want to make sure you’re getting as much out of the solution as possible so that it quickly pays for itself (not just for the initial purchase, but also the time and energy it takes to customize the solution).
We have several tips and tricks to make sure you’re getting the most from the donor database you choose. Included in these tips and tricks are: conducting research before investing, looking for a nonprofit-specific solution, using available training resources, and considering the “theme” of the solution.
Conduct research before investing in your first donor database.
One of the most challenging and expensive things that your organization can go through is changing donor databases. While it’s sometimes necessary as you continue to grow, it’s not a change that you want to make too frequently. To limit the number of future shifts, make sure you conduct adequate research upfront to invest in the best solution the first time around.
Not only do you need to conduct research, you need to conduct effective research. If you follow the steps below, you’ll ask yourself the right questions and collect the most valuable information before investing:
- Define your priorities. We suggest before you get started, that you create a list of your goals and priorities for your organization. That way, you won’t get distracted by the shiny bells and whistles of new donor databases. Instead, you’ll have a list of concrete things you want to accomplish and can identify features that will help you accomplish them.
- Create a budget. Know approximately how much you can afford to spend on your donor database. Remember, this is about boosting your effectiveness and your fundraising capabilities. You don’t want to end up in the hole.
- Form a list of prospective databases. Start listing potential first donor databases. Use search engines, online referral lists, and references from neighboring organizations to get your start. Don’t worry about being too particular. You will narrow the list in the next step.
- Narrow your list of databases. Compare your list of solutions to your priorities and your budget. Use these as reference points to create your short-list of organizations.
- Choose your favorite solution. From the narrowed list of potential solutions, ask to demo your favorite software. Ask lots of questions and don’t be afraid to view more than one demo if you’re still undecided.
- Create an implementation plan. After you’ve chosen your final solution, create a calendar that you can follow to get the software all set up and your information uploaded into it. You should also make sure your team is trained to use the software and that you know who will update, add contacts, and clean up the data in the future.
You’re already off to a great start in your research by reading this guide. Now, you’ll just need to follow the steps above and prepare for a new solution.
Look for a solution dedicated to helping nonprofits.
Nonprofits operate differently from for-profit organizations. You’re not looking to sell a product, rather, you’re looking for supporters of a mission. Therefore, while for-profit CRM systems could be customized and configured to function for a nonprofit, they won’t work as well as one that is designed specifically with nonprofits in mind.
When you’re looking at different solutions, check to see who their other clients are. Do they work with similar missions? Or other nonprofits of a similar size? That will help you determine if the software will best suit your specific organization.
Take advantage of available training resources.
Sometimes, donor database providers require nonprofits to pay to obtain training resources. However, many offer online training opportunities for free. Be sure this is something you ask about during software demos.
As an example, Bloomerang offers the Bloomerang Academy resources for all of their clients. Your nonprofit can learn about how to best use the software and teach other team members to do the same.
Consider the “theme” of the solution.
Some software solutions have specific purposes in mind. They may focus specifically on building relationships and increasing retention, on acquisition, on their built-in marketing tools, or on other features. Looking for a solution that aligns with your nonprofit’s goals is key to gaining access to the features that will help you reach those goals.
For example, the experts at Bloomerang identified the need for nonprofits to focus more heavily on retention. It’s an incredibly important part of nonprofit strategy as organizations can raise hundreds of thousands of dollars more by increasing their retention rate by just 10%. They then built software specifically designed to help organizations retain more donors and increase funding that way.
As your nonprofit looks into your first donor database, make sure you’re ready to get the most out of it. Keep your goals in mind throughout every step of your selection process and make sure the solution you choose has the necessary features to help you reach those goals.
4. Are expensive donor databases automatically better?
Just because a nonprofit donor database advertises itself as “free,” that doesn’t mean it’s automatically the best choice for software. In fact, oftentimes it’s this free software that poses a security risk to your organization as it may not have all of the safety features that are regularly offered with a paid system.
However, that doesn’t mean you have to break the bank to invest in your first donor database. Solutions that are designed for small to mid-sized nonprofits keep price in mind for organizations like yours.
Look for a scalable solution that allows you to increase the capabilities of your organization when you’re able to afford it and need the additional room for growth.
Expensive donor databases aren’t necessarily always the best, especially for a small organization. However, free software also rarely offers everything your organization needs for success. A scalable solution offers the happy medium.
Don’t get us wrong! Free solutions do have their place in the selection process of your first donor database. However, it’s a useful tool to test the solution to make sure it’s the right one for your organization. It’s like the bottom tier. If you want your organization to expand, you shouldn’t expect to stay there for long. Always anticipate growth and how you’ll scale up your software as you continue to expand your organization.
5. Why consider Bloomerang for your first donor database?
Our (slightly biased) opinion is that Bloomerang is the best donor database for anyone purchasing their first solution. Bloomerang offers all of the features that nonprofits need to get started with their stewardship and relationship-building strategies.
When you invest in Bloomerang as your first donor database, you’ll gain access to top-notch features such as:
- An interactive dashboard. You can follow your fundraising campaigns and see which ones need more attention to reach your goals. This dashboard makes it easy to keep an eye on your goals and knock out your to-do list.
- Engagement and generosity scores. As supporters interact with your nonprofit, their engagement scores will increase, showing that they’re becoming more and more involved with your mission. Their generosity score is calculated based on DonorSearch’s prospect research database. These two scores can help you determine the best major contributors for your cause.
- Constituent timelines. View supporters’ history with your organization at a glance with a timeline of their interactions with your organization. This shows the different campaigns they’ve supported, the emails they’ve opened, phone conversations had, and more.
- Emails and letters. Draft email templates directly from your Bloomerang donor database for various segments of your donor population. This makes it easy to adjust the templates in the future and quickly craft and distribute your marketing materials.
- Integrations with other top solutions. Bloomerang offers several direct integrations with other top nonprofit providers like Mailchimp, Qgiv, and DonorSearch. If your heart is set on using another platform not on their partner list, you can connect the two solutions using a tool like Zapier.
As you’re looking for a donor database, we do encourage you to go through each of the steps we outlined earlier, including conducting your research and comparing different platforms. But we also feel sure that Bloomerang will make the shortlist. Be sure to consider us alongside the other solutions of your choice. And, if you’re already curious about what a top-notch solution should look like, go ahead and demo Bloomerang for free.
Investing in your nonprofit’s first donor database is a big deal! It’s a huge milestone and something that should be celebrated as you become more established and start to grow. However, we also recognize how confusing and difficult it can be.
The most important part of investing in your first solution is to ensure you do enough research ahead of time. Along with the above commonly asked questions, keep up with your research by reading the following articles:
- Nonprofit CRM | Complete Guide to Choosing the Best Solution. This step-by-step guide delves further into the research process that nonprofits should take in order to choose the best CRM system to meet their needs.
- Donor Database: The Buyer’s Ultimate Guide for 2020. If you’re looking for the features that nonprofits should look for in a donor database, this article will provide the answers.