Do I Really Need to Pay for A Fancy Donor Database?
Each year thousands of non-profits are started by passionate, dedicated volunteers wanting to make an impact for a cause they have been affected by in one way or another. Most non-profit start-ups happen slowly with a volunteer board of directors, a couple of fundraising events, and supporting one or two programs.
While the start-up process is exciting and you can typically find a lot of people willing to give of their time to support the effort, very little thought is usually given to the importance of a donor database to track all of those funds the team has worked so hard to solicit.
Fast forward a few years into the operation and now the staff has realized that they have 20 spreadsheets, reports from several online giving sites, checks and electronic funds transfers (EFTs) coming in monthly and none of it is being tracked in one place. It’s officially past time for the need to start using a donor database to track donations.
Here are my top 5 benefits of implementing a donor database as soon as possible:
1. If someone asked you how much the organization raised last year, could you give an accurate answer? Probably. But what if they ask where the majority of your funding comes from? A donor database allows you to quickly and easily track the source of funding down to the nitty-gritty detail, so you know where to spend more or less time cultivating current or potential donors. You may already know that you receive many grants or individual donations, but do you know specifically which type of grants or what event/activity motivated those individual donors to give?
2. Your donors deserve to be treated like the treasure that they are! Donor databases allow you to have a poor memory and still recognize donors in a timely manner for their amazing contributions. Many databases can be set up to notify leadership when a donor makes a gift of a certain amount (or more), summarizes annual and lifetime giving totals, identifies lapsed donors, and tracks what they’re passionate about. Imagine getting a report automatically emailed to you at the beginning of the week outlining who you should call to thank or recognize for their generosity. Also imagine knowing exactly which donors to invite to the special program presentation. Not only will they feel special that you know their interests, but it will save staff hours of effort inviting the entire database and following up with RSVPs.
3. How often have you found yourself editing and updating your spreadsheet to track event revenue? I know I used to have at least 5 different spreadsheets to track revenue, pledges, sponsor benefit fulfillment, attendees and auction items for every fundraiser. At the end of the event, I’m sure you added up all of the revenue, subtracted expenses and determined if the event was a success. When you did your analysis, did you know specifically where each dollar came from (sponsorship, ticket sales, auction, mission gifts, raffles, purchases, etc.)? If not, how can you adjust your efforts for the next event? With a database, you can easily build in options to track each of these areas to see how your auction has grown year over year or if you’re selling enough VIP tickets. With proper data, you can drill down your efforts to make adjustments and work smarter, not harder!
4. If you love data, dashboards and analytics as much as I do, you’ve likely been wanting a database for some time that can automatically update reports and dashboards. If you don’t know what data you should even be tracking or looking at, that’s ok too! Here are a few examples: track your appeal response rates (how many appeals you send out vs. responses), number of new donors acquired this year, number of donors lost this year, revenue to date vs. goals, how many grants your team applied for vs. awarded, and so much more! If you’re a data-driven leader, you will surely enjoy the many benefits of customized reporting and dashboards. And they look pretty cool too. Click here to read more about which key metrics to track.
5. It helps accounting, tax and auditing professionals ensure checks and balances are in place so nothing was missed, ensures funds are reported correctly on IRS forms, and allows mistakes to be found. Having a system that tracks receivables, produces donor tax receipts, stores backups for the audit, and tracks donor designations all in one place makes the entire process go smooth and easy come fiscal year end.
So, now that you see just a glimpse of what a donor database can offer, do you really need to break the bank on an expensive program? Absolutely not! There are many options out there and the choices can be very overwhelming. My favorite is Salesforce because it can be simplified enough for a new non-profit and grow with the organization as it becomes more sophisticated and complex. But there are many choices that range in price and features.
Pro tip: don’t get distracted by the fancy bells and whistles! My recommendation in selecting a donor database is to determine a budget amount you want to spend annually, then create a list of functions you need-to-have and want-to-have. Once you have your list, set up as many free demos as needed until you find the right fit that fits within your budget.
Happy donor data tracking!
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