Whether you’re looking for your first system or hoping to replace the one you’re currently using, you’ve got a number of options from which to choose. As you start to consider them, think through the high-level options before delving into the detail of features.
Donor Management vs. CRM vs. Fundraising Platform
Past editions of this guide focused on donor management systems—software built specifically to track donors, and in some cases, do little else. Some offered little functionality to support event attendees, volunteers, members, or other constituents.
But many vendors have broadened their offerings to keep pace with the growing desire of nonprofits to deepen engagement with all their constituents, and many donor management systems evolved into Constituent Relationship Management systems, or CRMs. Originally developed to provide sophisticated data collection and analysis tools for corporate sales and marketing purposes, CRMs are increasingly popular with nonprofits.
In addition to functionality to track donors and other constituents, fundraising platforms also let you conduct online fundraising campaigns and collect online donations. As online fundraising continues to grow year over year, both in terms of total dollars raised and as a percentage of all fundraising, nonprofits are more interested in software that allows them to use the data from their constituent databases to create and execute holistic fundraising strategies.
Which is right for you? Again, it depends—as with any software, there are trade-offs to each. No one type of system is going to meet everyone’s needs.
Donor management systems were designed with development staff in mind, but sometimes lack the flexibility of a CRM. While more flexible, corporate-focused CRM systems will likely need a good deal of configuration to meet the needs of nonprofit fundraisers and can sometimes be daunting to non-technical staff. Donor management systems and CRMs that offer online fundraising add-ons may not have the depth of a system purpose built for online fundraising.
The type of system that is right for you is the one that provides you the tools you need in a package that meets your budget and technical ability.
Hosted vs. Installed Systems
Many donor management systems today are cloud-based, which means the software resides on a server hosted by the vendor and most often accessed via a web browser. Several vendors host their databases in the cloud, but the user needs to have the system interface installed on their computer to access their database. With remote work growing in prevalence, even prior to COVID-19, cloud-based systems allowed nonprofit staff to maintain productivity no matter their geographical locations. The benefits are many: the software and all data is stored securely on the vendor’s servers; you don’t have to purchase any hardware; the vendor handles software updates and data backups; and staff can access the system from anywhere there’s an internet connection. You typically pay a monthly or yearly subscription fee for the system, which can range from a few hundred dollars per year on up.
As a more traditional option, some donor management systems are purchased and installed onto your network and staff computers. Many of these are based on the Microsoft Windows operating system, so if your organization uses Macs or another OS, you may have a difficult time finding a compatible installed system. If you’ll have multiple users, some require a dedicated server—literally a computer that does nothing but run the software. With any installed system, you’ll be responsible for software updates and data backups, though some vendors will help you with this for free as part of their support service. Installed system vendors typically charge a “license” fee to buy the system, which is often based on the number of staff members (also called “users,” “seats,” or “licenses”) you’ll have using the system. After you pay the license fee, you’re not committed to paying anything else, but most vendors offer technical support service and the ability to get free updates to the system (such as new software releases with improved functionality) for a continuing annual fee.
A few of the vendors who provide installed systems also offer a version of their software that can be accessed online through the use of such remote access technologies as Windows Terminal Server or Citrix Server. This model essentially transforms a system which is traditionally installed into an online hosted model.
Open-Source Systems
Generally speaking, open-source software is software whose underlying source code the developer makes freely available so that others can use, modify, and distribute it. Some of the most popular website Content Management Systems, including WordPress and Drupal, are open-source. There are no purchase costs or subscription fees for open-source systems—but that doesn’t mean they’re free.
They need to be installed and customized to meet your workflows and needs. They require hardware to run on, and someone needs to maintain them and provide training on them. As the saying goes, open source systems are “free like puppies, not free like beer,” because over their lifetime, they will require a lot of care and feeding.
While open-source systems are highly customizable and flexible, you’ll need to work with a consultant or highly trained staff member to set them up and migrate your data. (Only one system in this guide, CiviCRM, is an open-source product—it includes donor management, fundraising, marketing, event management, and volunteer tools.)
Custom-Built Systems
What about building or commissioning your own custom database? You wouldn’t be the first—but fair warning, it’s very unlikely to be your best path. For one thing, donor management processes are much studied and well understood, with lots of systems purpose-built to support them—many of which are very configurable. For another, building your system means you’ll be the only organization using it. You won’t have any community to discuss issues with, or anyone to provide training. You’ll need to pay to create the system initially, and keep paying to maintain it—not to mention that you’ll never get any upgrades that you don’t pay to build.
If you have needs or processes unique to your organization, you’re probably better off starting with an existing system and customizing it, even extensively, if necessary. Existing systems will have basic functionality—such as integrated mail-merging, emailing, and standard reporting—that would take you days or weeks to build yourself. Look for an extensively customizable system, like a CRM platform or open-source platform, and start there. Or consider that your processes may be unnecessarily unique—you may be better off changing your processes to meet standard best practices that existing systems are already designed to support.