Donor Management Software

If you’re a nonprofit organization, donations are your lifeblood. The generosity and kindness of your benefactors keep your organization running, enabling critical research, greater public awareness for your cause, and the ability to share life-changing gifts. Enter donor management software.

While nonprofit organizations have a different purpose than businesses focused on returning value to their shareholders, that doesn’t mean they’re not responsible for managing complex and intricate financial scenarios. Nonprofit organizations must have the right tools in place to properly manage their financial matters, from grants to recurring gifts. Donor management software makes it easy to manage a donor database, analyze and assess donations, process payments, track events and fundraising campaigns, and carry out your nonprofit organization’s administrative tasks.

This guide will provide you with information on the following topics:

What Is Donor Management Software?

Donor management software makes it possible for nonprofit organizations (NPOs) to manage, track, and execute strategies that engage and retain donations. Donations are a vital component of any NPO, and donor management software enables users to take more control over their donor database. By tracking and analyzing a donor’s transition or communication history, donor management software helps create targeted email marketing campaigns that offer convenient links to accept online donations.

With the right donor management software, NPOs can make it easy for any number of users or volunteers to take advantage of powerful donation tools. Data mining and data conversion tools make it easy to analyze trends to identify areas of success and opportunity. And with powerful communication tools like automated email campaigns, mail merged thank-you letters, and contribution statements, staying in touch with donors is simpler than ever before.

Primary Features

Key Benefits

NPOs depend on their solutions to manage, improve, and maintain incoming donations. Here are some key benefits that donor management software offers its users:

• Improved donor analysis: Powerful data management tools in donor management software enable NPOs to use complex logic queries to get the most out of any donor database. By maximizing a donor database’s capabilities to track each donor’s complete donation history and every possible point of contact, NPOs can identify trends that make it easy to reach as many donors as possible. For example, database queries can be used to pinpoint donors who haven’t given in a set period of time, identify people who have attended events but have not given, or assess donors who usually give but haven’t yet made an annual donation.
• Comprehensive donor record management: With donor management software, NPOs can manage all donor addresses and contact records to ensure information is complete and up to date. Data from a variety of different spreadsheet or databases sources can be imported and combined, making it easy to remove or merge duplicate entries, quickly search through names and addresses, and add wealth and philanthropy ratings. Donor management software can also directly link individuals, highlighting their relationships and affiliations.
• Better donor communication: Donor management software can turn your donor database into a comprehensive communications platform. Email integrations with popular solutions like Constant Contact make it easy to send email acknowledgment letters in batches, distribute contribution statements, and share online fundraising campaigns. Communication capabilities also make it possible to import data from Excel, generate mailing labels, mail merge letters, and identify and merge duplicate entries.
• Easy form creation: Whether it’s to gather contact information, recruit volunteers, or solicit and receive donations, donor management software lets NPOs quickly and easily create responsive web forms that can be shared through email.
• Tracking, allocating, and managing volunteer work hours: Many NPOs depend on the generosity of volunteers to help carry out administrative, donor management, and fundraising tasks. Donor management software makes it simple to build a database of volunteer workers, assign work to volunteers, and track their complete work history.
• Error reduction: For NPOs, donor management software can act as a centralized hub for all donor-related activities. Any number of separate databases, spreadsheet, address books, and payment systems can be linked in one common system. Doing so can greatly improve accuracy and transparency throughout the donation process.

What Type Does Your Business Need?

The best donor management software for your organization depends on the size of your NPO operation. While every NPO needs a set of tools to manage and track donations and donors, not every organization needs a larger, more comprehensive standalone solution:

• Small NPOs may want to consider donor management software that integrates with existing solutions that many small businesses use, such as QuickBooks.
• Medium NPOs with a fair number of volunteers and donors should consider donor management solutions that make it easier to parse larger donor databases for better management of donation tracking.
• Large NPOs should embrace complete donor management solutions that make it easy to track large numbers of volunteers, donors, and events, coupled with mobile and cloud-based features that enables access and management on the go.

Popular Solutions

Just as all NPOs have different purposes, not all donor management software solutions are alike. It’s important to carefully assess the capabilities of each donor management software solution to ensure it meets the particular needs of your NPO.

One popular piece of donor management software is DonorSnap (pictured above), a cloud-based solution available through an affordable monthly subscription fee. DonorSnap gives NPOs complete control over their donor database, making it easy to quickly manage and reach out to thousands of donors in an instant. In addition to standard features like pledge tracking, donation entry and acknowledgment, and comprehensive reporting, DonorSnap also offers direct integration with QuickBooks for enhanced accounting and fundraising capabilities.

Is QuickBooks a Donor Management Tool?

QuickBooks itself does not have a donor management tool included in it’s base package. QuickBooks itself recommends looks into more robust systems for donor management, especially if you anticipate tracking each donor touchpoint and not just each donation. Some basic fundraising software options will have basic donor management features, which could negate the need for a complete donor management tool.

The bottom line is if your nonprofit has a deep donor base, a large employee pool, and a more involved marketing plan, you’ll be best suited with a donor management system.

Common Pain Points

One common pain point for many NPOs is the cost of adopting new donor management software. As many NPOs run on tight budgets, large investments in new solutions can prove to be costly and potentially unaffordable. While many cloud-based solutions are more affordable and make it easier to account for recurring software costs with subscription pricing, it’s important for any NPO to choose a solution that suits their budget.

Ensuring ease of use is another important pain point for donor management software. Because many NPOs depend on volunteer labor, user-friendly donor management software is essential for organizations to make the most of their donor database. Whether it’s through an intuitive user interface, comprehensive and easy to understand training documentation, or included technical support, donor management software that’s easy for volunteers to use can help reduce errors, improve data security, and maximize productivity.

Market Trends

Here are some of the market trends donation management software developers have taken into consideration when crafting their solutions:

• 51% of nonprofits used a donor/contribution management software (pictured above): We asked fundraisers to share with us which software tools they used. We found fundraisers rely on three main types of software tools above others for managing their efforts.
• Online fundraising: Raising money online has become a popular and conveniently of soliciting funds from donors. Donation management software makes it easy to share links to campaigns for donations, process payments, and manage recurring gifts.
• Cloud-based software: Many donor management software platforms are now being offered as a cloud-based software as a service (SaaS). SaaS software can often be accessed anywhere, enabled through a web browser or a variety of desktop and mobile apps. Cloud-based donor management software is often accompanied by a recurring subscription price, making it easy to account for technology costs on an ongoing basis.