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The 5 Key Elements of Effective Fundraising Software

By Jay Love | Small Business

In most cases, no other factor has a bigger impact on the achievement of a nonprofit’s mission than the amount of funds raised during a given time period. However, very few fundraising software products actually facilitate fundraising! They shouldn’t just be systems for maintaining donation records and issuing receipts.

Here are five key elements of effective software products that actually facilitate fundraising:

The 5 Key Elements of Effective Fundraising Software image SoftwareFundraising SoftwareElement #1 – Communications

Since fundraising is based upon relationships, and virtually all relationships are the result of proper communications, we shall deem this element the most important. Communications covers a wide spectrum of items ranging from outgoing newsletters and solicitations to follow-up communications, such as thank you letters. Your system must facilitate each and every communication process. Here are a few of the basics to be aware of:

  1. Ability to create, send and track the results of all of your email communications (you should not need to go to a second system to do this!)
  2. Ability to quickly and properly acknowledge and thank via a proper letter or email every gift or pledge
  3. Ability to properly segment and create outgoing solicitation letters
  4. Ability to store a copy easily of every communication in the constituent record
  5. Ability to handle other communications such as newsletters, surveys and reminder letters

Element #2 – Constituent Management

This key element can only be achieved if the system is easy enough for every fundraiser and executive in your organization to use daily! Every donor can tell if these key people are not recording the notes regarding every meeting, call or conversation.

If all fundraising is based upon relationships, and you are working with more than 25 people, you need an easy and reliable way to capture all the details discussed as well as your specific follow-up actions. Therefore, the entering and accessing of those details with every single person, foundation and corporation is essential. This is where relying on a single administrative person to do this is impractical and very inefficient.

A key desirable feature is being able to use smartphones and tablets. This really unlocks usage by fundraisers and executives!

Those details of every interaction are literally the springboard to retaining every donor. In particular, knowing what every constituents wants, needs and ultimate desires enables major gifts and bequests.

Element #3 – Tracking Engagement Levels

Could you imagine trying to drive a car without a speedometer or gas gauge? Trying to raise funds from any constituent without any accurate knowledge of their “engagement” level is with your organization is just as difficult.

Whether the capability to accurately determine the engagement level is automatically part of the summary screen for each constituent or is based upon a customized report you create here are the key factors you should be utilizing:

  1. Type of giving (multi-year pledge, recurring or outright gift)
  2. Giving trend (is it going up or down)
  3. Number of years of giving (bonus points if they are consecutive)
  4. Volunteer activity
  5. Event participation
  6. Stewardship (bonus points for this one)
  7. Social Media activity
  8. Board or committee participation
  9. Communication preferences known
  10. Initiates communications
  11. Opens email
  12. Responds to email
  13. Subscribes to multiple communications

Element #4 – Dashboard w/ Alerts

Isn’t it sweet when your car dashboard tells you have a tire with low pressure or a service is due or your washer fluid is near-empty? Your fundraising team has critical information that must be at their fingertips in order to achieve the desired results. Dashboards and alerts allow this information to come to life every single time the fundraising software is used!

We believe most of these alerts and dashboard readings should be based upon “Best Practices” for small to medium size nonprofits. Unless you have an extremely experienced fundraiser on staff or have engaged such a consultant, the settings deemed vital by top notch industry experts will serve you the best. They will also reduce your implementation time by 75% or more!

The established standards include:

  1. Donor retention monitoring
  2. Instant campaign statuses
  3. Alerts for key fundraising actions:
    • Sending thank you’s promptly
    • Doing multiple appeals annually
    • Engaging donors about to lapse
    • Key dates for events
    • Follow items for constituents
    • Updating credit cards on file about to expire
    • Newsletter due dates
    • Campaign ending dates

Element #5 – Recordkeeping and Reporting

Yes, we could not forget one aspect of any fundraising software system is the proper recordkeeping associated with pledges and donations. This may also involve some standard or custom reporting depending on the extent of your dashboard(s).

Be careful about using systems designed for the commercial business world. No business except for a nonprofit has to worry about the following for nearly every financial transaction:

  1. Tax deductible or not
  2. Matching gift involved
  3. Soft and hard credits
  4. Type of pledge payment plan and reminders
  5. Recurring transactions up to a date or amount or neither
  6. Memorials and tributes
  7. Special recognition and/or no recognition
  8. Fund involved
  9. Campaign and/or appeal involved
  10. Funds encumbered or not
  11. Thank you letter/email type
  12. Gifts in kind

Reporting usually requires both a means for creating and modifying custom reports, as well as being able to filter or query the data being pulled for the report. The key aspect of these functions to keep in mind is to make sure they are easy enough for the fundraisers and executives to use. Otherwise your entire operation is at the mercy of a single person, if you are a small or medium size organization.

Yes, we know the above five elements are not what most how to guides about selecting, implementing or using fundraising software focus on. The main reason this is the case is they were not written by actual fundraisers, but rather by vendors, database managers or technology consultants in nearly every case.

Now that fundraising is so much more about relationship building versus direct mail or special events for most organizations, the above five elements should serve you well in your quest to choose the tool best suited for actually raising funds.

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