Monday, July 28, 2008
Why Fundraising CRM Software?
A lot of people, even some people within the non-profit industry itself, are rather surprised that most organizations do not use professional CRM Fundraising Software - I'd estimate it's at only 4% of all non-profits (about 50,000 of the approximately 1.6 million non profits registered in the United States) . These include all the clients from DonorPerfect, Blackbaud, Convio, Exceed, Sage, Donor2, etc. - combined.
Yes, the other 96% tend to use something, like Microsoft Excel or Access, but at the end of the day there's still very few who take the necessary next step to increase their fundraising performance through CRM fundraising software.
Founded in 1995, the foundation has provided full scholar camperships to low-income middle-school children to private independent residential camps. What's unique is that the organization's recipients may continue to receive an annual campership- as long as they continue to meet their school’s academic and citizenship standards and are invited to return by their respective camps.
It's a fascinating program and as a former camp counselor and assistant camp director, I believe 100% in their mission.
When it comes to fundraising technology, however, they are admittedly a bit behind the times. About 2 months, I had a chat with one of the board members who had a simple question: "Why should anyone buy CRM Fundraising Software?" It seemed like a very reasonable question, and I couldn't believe that we had exactly ZERO web pages or marketing material that addressed it. In reality, for many years we've been operating under an assumption that everyone knows why they need to buy fundraising software, for the same reason as why everyone needs to buy food, shelter, transportation, etc. It was a flawed way of thinking and one we set out to correct. (Note: Apparently, we're not alone. I checked Intuit Software (makers of Quickbooks accounting software), and they didn't have anything either that answered the question why one would purchase accounting software in the first place- it was just a given)
As a result, we've developed some material, and by far our largest effort was to communicate it through a new marketing channel for us- a YouTube Video.
So here's the video link that we'll be using and perhaps we can get the other 96% to consider fundraising software after all. Feel free to pass it along.
Monday, March 24, 2008
NTEN Conference/Social Return vs ROI
I just completed a conference with NTEN, and this time around, I have to say I felt a different vibe- and I'll explain in a moment.
The NTEN Technology conference brings together the latest trends in technology for the Non-Profit Sector. Full of energy and lots of young people (well, at least younger than I am), it was definitely invigorating to see everyone come together.
However, who was coming together? Unlike last year, I definitely noticed many more folks connected with technology companies or they were independent consultants. Of course, I fall into this same group, but usually it's important to see that the people we are trying to serve- actual non profit organizations- attend the event.
I guess I just experienced a different vibe this year- technology seemed to be the focus, and not non profits. There were scores of people selling themselves or the latest wares- and many times I didn't even know what they were trying to sell. Technology for technology's sake I guess.
In reality, the only reason why non profits should invest in any technology is if they believe they will achieve a return on investment greater than their current processes. Now, ROI can be calculated in many ways, and it's not just about dollars. There's certainly SROI, or Social Return on Investment, that must be measured as well, and something I'm calling STROI, or Social Targeted Return on Investment.
Your STROI can be measured and influenced by activities such as public awareness campaigns, volunteer initiatives, special events, and grass-root advocacy projects, just to name a few. So while an initiative may not raise a lot of money, it may raise awareness which could be very worthwhile to your cause, and potentially create a fundraising base in the future- which could be a very, very, very, long time away.
I do believe people put more of an emphasis on STROI than traditional ROI, simply because it's easier to convince people with feelings rather than fact - the returns are nebulous and not easily measured. I.E., anyone can spend $50,000 and buy a full page ad in USA today. Sure, you'll get lots of people that read the ad- but will you ever know how many? Will exactly 5% of those readers become advocates and donors? The answer is always 'maybe'. So people try it and most fail.
I think the same reasoning applies to many new technologies. Let's create an application on Facebook! They have tens of millions of members! Sure you may get 1000, 10,000 or even 1 million people to download it- along with the other 30 applications they downloaded already. How many of those that download it are committed to your cause? How will yours rise above the crowd? Is it worth developing an application to try and find a needle in a haystack, when you have to pay and maintain the cart that holds the whole haystack? (And pay for the driver, and maintain the wheels, and the axle, etc. etc.).
It's no secret that the best fundraising activities or technologies generate both the return on investment and spread their message to raise social awareness. These types of activities include traditional Thons (such as walk-a-thons, bowl-a-thons, dance-a-thons, etc.) where the constituent is actively recruiting (through their social networks) additional constituents and raising a significant and meaningful amount of money at the same time.
Direct mail fundraising, a tried and true ROI king, certainly is a case of lower social return (you target a limited pool of people), and a high return on investment. The same goes for Planned Giving and Capital Campaign initiatives- since the ROI is off the scale for these activities, the fact they only reach a few people doesn't matter. On the other end of the spectrum, a newsletter reaches many people, but the overall ROI is quite low.
Finally, you have a group of activities that have both low social return AND low ROI. Some examples of these (which include both off-line and on-line technology) include On-Line Shopping Malls, Paid Banner ads, personalized widgets, full page newspaper ads, television ads, etc. I even think tools like Twitter come into play here- where's the ROI?
In face of the other alternatives, doesn't it make sense to avoid this last group of activities if at all possible?
