Step one was to make the switch from spreadsheets and ledger books to software.
With that transition gaining steam, the next step for nonprofits is to demand higher-performing and well-rounded software.
According to a survey conducted by Software Advice, a company that provides research and online reviews of fundraising software, many nonprofits are switching their software provider and demanding more functionality and tools from those products.
The most striking example of that demand comes from the increased desire from their donor management tools. In 2014, only 18 percent of respondents said they wanted email marketing and outreach tools included in their donor management software. However in this year’s survey, that figure jumped to 42 percent, an increase of 133 percent.
Jana Finch, Software Advice’s senior market research associate, said she was surprised to see such a large increase in the demand for communication tools.
“It’s not surprising that buyers are requesting outreach functionality, but the large jump might indicate a sea change in the way nonprofits are approaching donor communications,” Finch said. “Retaining existing donors by engaging them and building good relationships is a tried-and-true strategy for keeping contributions up. It’s good to see that smaller nonprofits are being proactive about getting tools to strengthen those connections.”
Finch said nonprofits’ desire to personalize messages to further engage donors is likely the key driver behind the jump.
“It’s incredibly difficult to manage messaging to more than a few dozen donors without software,” she said. “Since there are a good number of affordable fundraising systems with email marketing capabilities available today, it’s hard to imagine any reason fundraisers wouldn’t want email marketing tools.”
Email wasn’t the only communication method more in demand from nonprofits. Requests for direct mail marketing also more than doubled going from 9 percent in 2014 to 22 percent in 2015. Automated acknowledgements of donations, which was the top request a year ago at 31 percent, saw a slight increase to 35 percent.
With more nonprofits moving to incorporating software in their fundraising operations, many others are upgrading their software and they look to better match their needs. According to the survey, the most popular reason for replacing current fundraising software was more functionality at 27 percent. The second most popular reason was a mandatory upgrade at 22 percent. Nonprofits also changed systems to consolidate their systems or increase their efficiency.
While nonprofits want more from individual software programs, they also want their fundraising and donor management programs to work seamlessly with other platforms. More than half (57 percent) said they wanted their donor management to integrate into their accounting program. The next most requested integrated tool is the website at 22 percent, followed by email marketing and social media, which were both at 17 percent.
Software companies are listening to those requests. Finch said they are working to include the functionality and inclusivity that nonprofits seek.
“In fact, we see fundraising, donor management and CRM systems naturally morphing into a single system that supports all types of interactions with constituents and fundraising activities,” she said. “There’s a lot of overlap in what these systems do and how nonprofit professionals use them, so it makes sense that this is happening.”
The survey was conducted based off 200 interactions with nonprofits from August 2014 and July 2015. Thirty percent of the respondents were administrative staff, while another 26 were executive directors. Two-thirds of the respondents work for nonprofits with budgets less than $1 million, while another quarter come from nonprofits with budgets of $1 million to $5 million.
