August 18, 2008 | Categories Donor Management

Why free nonprofit software often costs more!

There are a LOT of Free Software Options for Nonprofits

First let me remind my readers that I’m the CEO of a software company whose business is providing fundraising software to non-profits, so I can’t claim full objectivity on this topic. That said, I’m pretty tired of reading blog postings and articles from non-profit consultants espousing the virtues of “free” software for various aspects of nonprofit administration — from constituent relationship management (CRM) and web content management systems (CMS), to online donations, etc. In some cases the products being recommended are open-source software like ebase, Civicrm, SugarCRM, etc. and others are from philanthropic entities set up by for-profit companies like salesforce.com.

Sure, its nice of salesforce.com to provide nonprofits with free licenses for their software, but they are able to do this because their real business is providing salesforce as a sales contact management system for businesses. Adapting salesforce to provide the processes and reporting necessary to meet the unique aspects of nonprofit fundraising is a daunting effort. Of course these consultants have a solution — just hire a consultant to adapt (customize) the system to meet the needs of your nonprofit. Unfortunately the cost involved often far exceeds what the nonprofit would have to spend to buy a product that is already designed and tailored for non-profit fundraising.

What do Nonprofits Really Pay for Open Source Software?

I have a similar criticism of open source products, where the products must be maintained and supported by a community of developers. Again, the motivation — providing nonprofits with inexpensive software — is laudable: however the results almost always require the nonprofit to spend far too much time and effort on figuring out how to make it work.

As I noted at the outset, you can reasonably question my objectivity, but take a look at these quotes in a recent article from Idealware that presents case-studies of a few nonprofits’ experience with general-purpose CRM systems.

From NY-NJ Trail Conference (NNTC)

“While ebase was a low-cost solution for NNTC (ebase can be downloaded for free and used on top of Filemaker Pro), the real cost has come in the staff time it has taken to modify the database. Daniels’ deep technical knowledge allowed him to make major changes. The rest of the staff now knows enough to make routine changes as necessary and train each other as new staff members are hired.

Because of his comfort with technology, Daniels did a lot of the CRM implementation himself, though he knows this is not an option for many nonprofits. “Most organizations don’t have a high-powered techie to implement a CRM for them, and finding a sophisticated volunteer is not possible for most organizations,” he says. “Without sophisticated knowledge you may have to hire consultants.”

Words of Wisdom Daniels cautions against getting locked into a product. In NNTC’s case, ebase has not progressed and there is no upgrade path without doing a significant rebuild of the existing data and reports. “Nearly the entire CRM would need to be rewritten to upgrade.”

From Washington Toxics Coalition (WTC)

Salesforce itself is free for WTC to use because of Salesforce’s donation program (which provides up to 10 licenses for 501(c)3 nonprofits). However, it cost $10,000 for their consulting firm, ONE/Northwest, to migrate WTC’s data and build custom features. “We couldn’t have done it without them,” says Dawson. The project took about four months to go live. For an organization with about a million dollar annual budget, the CRM modification “wasn’t chump change,” says Dawson.”

“Not everything is better in Salesforce. WTC likes to create very specific solicitations to donors based on their interactions with the organization, and it is difficult to print a spreadsheet with a full history of giving. Ebase did this better by storing all donation data in one place. WTC’s Consultant, ONE/Northwest, created a custom view of some interactions but not of others.”

Here is a link to the complete article at Idealware which has a lot of other interesting insights and also includes many positive comments.

Understand the Full Cost of “Free Software” Before you “Buy”

My point is simply that non-profits need to realize that the cost of software is just a small component of the total investment in successfully implementing technology. As a software vendor focused entirely on nonprofit technology we have a strong financial incentive to help our clients use our products successfully. We serve as their technology experts, so they can spend their time and energy on their missions and building stronger relationships with their donors and constituents — not on building software.