Focus On: Software: Are You Plugged In?

M.J. Dunion knew she had a mess to clean up six years ago when she was hired as director of development operations at Boston Medical Center, formed when a private academic medical institution and a city hospital merged. Her main task was to combine several departments that had been using different databases in fundraising efforts. She knew this largely was a matter of using the right technology as efficiently as possible.

In Dunion’s case, the choice was software made by Campagne Associates, the New Hampshire-based company that some BMC departments already were using prior to the merger. Integration of the various departments took nine months and involved eliminating pockets of redundant data. Campagne Associates found programmers to work on the conversion process and ultimately helped put in place a reliable database from which Dunion and BMC could analyze information about donors.

In the years since development operations were consolidated, annual donations have risen from $500,000 to $12 million at BMC, which provides a safety net for thousands of patients whose incomes fall below the poverty line. Several factors were involved — more development hires as well as establishment of comprehensive foundation, major gifts and events programs — but Dunion says there’s no doubt that technology played a major role in jump-starting fundraising efforts.

“With the right software you can be far more strategic and coordinated in the appeals you send out, the information you’re capturing, and in compiling information about donors and the goals you have set,” Dunion says.

The popularity of new fundraising tools begins to make sense when you think of the large numbers of people who have to be communicated with at a nonprofit hospital, homeless shelter, prep school, museum or environmental organization, etc. The donor database at a typical nonprofit is likely to be much more diverse than it was 30 years ago, when development professionals often “turned to a few rich people” for funding, says Craig Ahlquist, vice president and cofounder of Campagne Associates.

A good fundraising software package forces users to quickly enter all new relevant data about donors and other constituent groups. In doing so, it minimizes problems related to turnover of employees.

“The software helps establish what we call institutional memory,” Ahlquist says. “The point is to ensure that new employees are always able to turn to a reliable database.”

Once the database is in place, the software system can be used to generate appeals for donations — either in the form of letters or an efficient e-mailing system — as well as expedite processing of gifts and thank-you notes. It also can help nonprofits analyze results and answer important questions, such as why there is a disparity in donations from one year to the next.

“If you’re using software that captures all the data at the time of processing the gift, then the data will still be there in a year or two when you want to analyze it,” Ahlquist says.

Donor management … plus
But donor-management software isn’t the only technology solution being offered to nonprofits by today’s information-technology industry. The San Francisco-based Groundspring.org is itself a nonprofit organization that provides technology services through the Internet and helps raise millions of dollars for other nonprofits. It’s an application service provider, similar to Yahoo and other Internet entities, except that its site and e-mail functions are tailored to help nonprofits.

“The Internet provides for a far richer set of opportunities for nonprofits to engage with their donors than traditional methods,” says Dan Geiger, Groundspring.org’s executive director. “It can be a lot more cost effective.”

That’s because ASPs can be used to take care of so many jobs. Personnel at nonprofits can use an ASP at will without having to install and manage software systems. The ASP people keep the software they use up to date, process transactions and handle e-mail for the nonprofit — all for a reasonable fee.

“Most people think of the Internet and online fundraising as the most significant change in the past three to five years,” Geiger says. “It’s still pretty small in the general scheme of things, if you look at the aggregate numbers, but it’s growing fast.”

On the cutting edge
Other areas where nonprofits can utilize technology include prospect identification, event management, grantmaking, membership management, planned giving, prospect research, trust accounting and just about every facet of development imaginable.

For a more comprehensive list of fundraising technologies, go to the Association of Fundraising Professionals’ Web site (www.afpnet.org) and check out the list of exhibitors from the recent conference in Seattle. (Click on International Conference, then on “Meet the Exhibitors.”)

Still, other technologies are more cutting edge and maybe not something an organization might consider without some prompting. For example, cMarket has developed an Internet auction platform specifically for the nonprofit fundraising market. And IATS Ticketmaster, a credit card-processing company, is helping nonprofits interact with people who use their credit cards to make donations.

The Massachusetts-based cMarket provides each subscribing nonprofit with a private online site at which to hold its auction. It eliminates geographic restrictions and allows the nonprofit to bring the auction to the attention of all its constituents via e-mail. It also acts as a marketing tool for companies that supply the items to be auctioned by featuring on the online auction site the name, logo and Web link of each donating company.

IATS Ticketmaster is designed to save nonprofits the time and money usually associated with clearing credit cards. It provides real-time processing for donations made through all five major cards, and eliminates the need for point-of-sale terminals and expensive payment gateways.

IATS already is built into many of the leading donor-management software packages.

Making sense of it all
While technology for nonprofits is a fast-growing industry, what might be growing even faster is the number of consulting companies geared to helping nonprofits choose the right technology solutions — Internet service, software and other adaptive strategies. These consultants are needed to help choose and use new technology and to help companies deal with subsequent changes in the way they do business.

Jennifer Keller Jackson, senior consultant at Community IT Innovators, says her company helps nonprofits “navigate through a very crowded marketplace” to make informed choices about technology. The main factors to consider while helping with those choices are the size, budget and expectations of a nonprofit.

“Maybe Microsoft Excel isn’t working for them anymore,” Jackson explains. “Maybe they need special software that will track donors, grantees and so on. We’re very familiar with the fundraising software packages out there, and we also do Web development.”

CITI, which has an active client base of 250 nonprofits, most in the Washington, D.C., area, also helps companies deal with the human side of technological change.

“Once you’ve got this great new tool or this new system, your worries have only just begun,” Jackson says. “You have to make sure people are trained to use it, and that they aren’t scared or annoyed by it.”

Jackson notes that new technology is being sought largely because funders of nonprofits are demanding greater accountability and outcome measurement. On the other hand, she says, executives at nonprofits don’t want technology to intimidate the people who have to use it. The goal is to make it “as painless and invisible as possible” so that development professionals can devote their energies to marketing, communications and other strategic activities.

Ahlquist has a slightly different take. He stresses that the world of nonprofits has become highly competitive and that senior executives at nonprofits must set an example for employees by embracing not only donor-management software but also new technology solutions in general.

For instance, he says, a smart executive at a visiting nurses association will realize that improved efficiency depends on staffers making the transition from filing paper reports to filing reports on laptop computers.

Or maybe the new tool is something as obvious as an HTML-based e-mail instead of a printed newsletter to publicize a children’s museum opening. The tech-savvy executive will understand that an online newsletter that includes pictures of kids playing in the museum and other attractive features can save money for the museum and enhance its image.

“Most executive directors are focused only on mission,” Ahlquist says. “I’m telling them, ‘Hey, here’s some cool stuff that’s going on. If you think some of this can help your organization, start researching it.’”

Use common sense
But CITI’s Jackson cautions executives against trying to be too cutting edge, and so does Jan Masaoka, executive director of CompassPoint Nonprofit Services, a California-based, not-for-profit resource center for nonprofit organizations.

“Some nonprofits have been convinced to over-buy software products that are overly big and complicated in proportion to their giving program,” Masaoka says. “You can have a big giving program and a small nonprofit, and vice versa.”

A good consultant likely will recommend software packages in the $500 to $10,000 range for nonprofits with small giving programs. Intermediate packages might cost from $15,000 to $50,000. The most elaborate software packages — “the 500-pound gorillas,” as Jackson calls them — are in the $100,000-plus range and are best suited to the enormous giving programs at nonprofits such as United Way of America.

Masaoka advises nonprofits also to devote time to devising online technology strategies, even though the Internet has yet to become a major conduit for donations.

“A lot of donors go online to learn about an organization, but they may not actually donate online,” she says. “Integrating your online strategy with your multiple ways of giving — that’s what they need to be looking for.”

“They” are the people at the nonprofits best qualified to make decisions about software, online options and other technology solutions. The first thing she does as a consultant, Masaoka says, is to make sure the nonprofit’s accounting department is choosing the accounting software and the tech-savvy people in the development program are choosing the donor-management software and overseeing online operations.

Masaoka also might try to deal with someone who can make the best decisions about software packages geared to event management, planned giving or other special tasks. At a charitable foundation, she’d probably talk to the executive who knew which grant-management software package was best suited to staffers. For example, a package based in Microsoft Access probably would be a good fit if the foundation already was using other Microsoft Office applications.

Get what you need
Technology only helps if you use the right mix of components, says Michelle Milford, public relations manager at the Texas-based Lance Armstrong Foundation, founded to help improve services for cancer survivors. LAF uses its Web site to recruit volunteers and to seek donations, which “have increased significantly over the past two and a half years” since the foundation began online solicitations, Milford says.

LAF runs its database with a popular software package that connects to the foundation’s Web site. A popular Internet application is used to retrieve information from the database and display it on the Web site. Another package takes care of grant management.

Masaoka is all for new technology, as long as executives understand that it can provide solutions, but it’s not a panacea.

“I try to help people lower their expectations of what they think fundraising software’s going to do for them,” she says. “I still think the market is relatively poor in regard to what the technology actually can do.”

BMC’s Dunion makes a similar point: “There’s always a trade-off made in your decisions. Whenever you choose a new system, you realize there will be a better one down the road. The important thing is to have great customer support and get the most out of the system you have.”

Consultants and experienced users agree that everything depends on the size and budget of the nonprofit, and the functionality of the technology. In other words, be sure you know what you want it to do for you.

“Whatever the use, it’s probably going to be an important part of your operations these days,” Milford says.

David McKenna is a Philadelphia-based freelance writer.