Join the Online Fundraising Technology Conversation

Earlier this summer I was fortunate enough to attend the fantastic event Fundraising Day 2010 presented by the AFP Golden Gate Chapter in San Francisco, billed as California’s largest fundraising conference. One thing that struck me was the preponderance of technology companies in the exhibition hall. It seemed as if every other booth was a database company or an e-mail company or a website company trying to demonstrate its product. As I reflect on this trip, a few thoughts become clear.

The fundraising technology "industry" is alive and well in 2010. Many of the most successful business enterprises that profit from the fundraising sector are in essence technology companies. Blackbaud, based in Charleston, S.C. — one of the most widely recognized technology companies because of its database product The Raiser’s Edge — is a publicly traded company on the NASDAQ under the ticker symbol BLKB. Using stock prices as of early July, the company is worth almost $1 billion ($969 million) to its shareholders.

Convio, based in Austin, Texas, recently went public under the ticker symbol CNVO. Today it’s worth more than $125 million to its shareholders. There are scores of other companies, both public and private (for the record my company, Artez, is a private company headquartered in Toronto), as well as a group of nonprofit organizations, including Network for Good, that provide technology solutions to nonprofits and fundraising teams.

This shouldn’t come as such a surprise. If I were to go to a marketing conference — or a pharmaceutical conference for that matter — I would anticipate the exhibitor hall would be filled with technology companies too. Technology (computers and the software and websites they power) is a necessary tool to conduct effective relationship management in 2010, no matter what the industry. What is interesting to me about the fundraising sector is the recent shift in technology decision making from the IT professional to the fundraising professional.

This shift has been occurring ever since I’ve been participating in this fundraising technology conversation starting about 10 years ago. Any time my colleagues and I came across a new potential client, we were asked to speak to the head of IT, or for smaller organizations the webmaster. Most people in fundraising organizations viewed “fundraising technology” as primarily a technology conversation. But that has been changing steadily ever since the amount of money flowing in through technology has been increasing. There’s nothing like a few dollar signs to get a fundraising team to sit up and take notice! Now many groups see it as a fundraising technology conversation, and these groups tend to generate superior results.

I’ve met many charities around the world that raise more than 50 percent of their individual, public funding through technology. The overall average of all individual donation dollars donated via the Internet for charities in North America is somewhere between 5 percent and 15 percent. Of course, averages are just one mathematical way to describe a number of very different situations all in one tidy figure. The reality is that no one fundraising team is identical to another.

Here’s a fun exercise to try: Assemble your decision-making team and ask each member to write (secretly) what year your organization will raise more than 50 percent of all individual, public donation dollars via the Internet. If 50 percent seems too far off for you, go for 25 percent. Compare the answers publicly, and discuss the variations. Some on your team may say "never," while some may put the year surprisingly close to today.

The point of the exercise is not to get the "right" answer, but rather to align your team’s goals. If you collectively feel that you’ll hit the 50 percent rather soon, you’re going to want to devote more resources to your fundraising technology conversation than if you collectively conclude "never."

Once you’ve established some internal alignment back at the ranch, it’s time to go fundraising technology shopping! This is where many teams freeze … the choices are numerous and often daunting. The prices are hard to compare and vary widely. The feature sets provide a dizzying array of delights, but will you ever use them? This is a good moment to seek some advice. Rather than depend on the technology companies to tell you why their widgets are better than the next, turn to some trusted peers who have recently gone through the technology selection process and ideally have a year or two of field-testing reality under their belts. Ask them some frank questions: Did they pay what they expected to pay? How long did it actually take to implement? Are they raising any more money than before?

This last question is an important one to end on: “Will your choice help you raise more money?” As you shop for fundraising technology, don’t check your common sense at the door, and don’t let fundraising technology salespeople dazzle you. At the end of the day, technology is simply a tool. Put into the right hands, a chisel can create Michelangelo’s “David” … but in the wrong hands, just a lot of dents in the wall. If you spend all of your resources selecting and purchasing tools, but have no money or energy left over for the team to leverage the tools, you may find yourself staring at a wall of impressive-looking computers with very few donations flowing through them.

Good luck growing your online fundraising in the last half of this year!

Philip King is president and CEO of Artez Interactive, an online fundraising solutions provider.