4 Reasons to Invest in Nonprofit Database Software

July 14, 2021
Explore this guide for four reasons to invest in nonprofit database software.

Guest post blog submitted by: GivingMail, a leading provider of direct mail solutions.

Your nonprofit needs to collect donations, message donors, host events, manage volunteers, and much, more more. Juggling all of these tasks is where nonprofit database software comes in. Nonprofit database software solutions serve as your nonprofit’s hub of information and documentation, allowing your nonprofit to make data-driven decisions to improve operations while staying organized. 

Before investing in a nonprofit database, take a moment to understand why and how it can benefit your nonprofit. Doing so will help inform your search as you’ll be able to assess your current tech stack to discover gaps, assess database options on their core features and how well they meet your nonprofit’s most pressing needs. 

Our team at GivingMail has written guides and tips for nonprofits starting their research on nonprofit databases and other software solutions. To help explain why a nonprofit database (also known as a constituent relationship management system) is so important to the financial and organizational success of your nonprofit, we’ll discuss how:

  1. It can help automate your marketing efforts
  2. It can help make data-driven decisions
  3. It can help segment your audience
  4. It can help secure major gifts

Gaining a thorough understanding of the benefits of a nonprofit database will also help you convince your board, nonprofit leadership, and other members of your organization why choosing the right software matters. Remember that the software you choose will affect your entire team, so make the investment once you’ve decided it makes sense for your organization. 

1. It can help automate your marketing efforts

Staying in touch with your supporters is vital for your nonprofit’s continued success. However, even with templates, writing and sending emails to individual supporters is hardly practical. For instance, you’ll want to send a thank-you email to every supporter who donated, which requires linking your messaging system to your donation form so no supporters are forgotten. 

Some nonprofit databases are designed with communication tools that automate mass email marketing by creating profiles for your supporters and then using that information to deliver customized emails in response to specific actions such as donating. Along with email, nonprofit databases can also accomplish this with direct mail, addressing each supporter by their name in a personalized message.

Efficient communication improves your nonprofit organization’s marketing as you can maintain conversations with hundreds of supporters at one time. Here’s a general rundown of how you can set up your nonprofit database to start automatically sending emails:

  • Create profiles for each supporter. Your nonprofit database stores information on your supporters such as their name, contact information, and past interactions with your nonprofit. By doing so, your automatic messaging tools will be able to pull key information from specified fields to fill out message templates with relevant details. In addition to addressing each supporter by name, your nonprofit database should also be able to reference past donations, event attendance, and volunteer history to build a connection with each individual supporter. 
  • Write templates for common messages. Many nonprofit databases come with pre-built templates for the most common message types such as thank-you letters. However, you may decide to add additional message types such as welcome emails to encourage new donors to become part of your nonprofit’s community. Websites like Fundraising Letters can be a valuable resource for creating your first set of templates, but be sure to customize every template you use to match your nonprofit’s branding. 
  • Set a communication timeline. Determine when you want your messages to be sent. Thank you emails for donations and confirmation for event registration should go out immediately, but other messages such as your monthly or weekly newsletter will need a different schedule. You may want to set reminders or continuous messaging until a problem is resolved such as payment errors, so ensure that your nonprofit database comes with customizable settings that allow you to edit communication timelines at your discretion. 

Your nonprofit database is ultimately a time-saving tool, and automatic outreach will save your employees quite a bit of time and effort for routine messages. Your team can also use your nonprofit database’s communication tools to identify engagement trends such as open and response rates. This information will allow your team to make data-driven decisions to benefit your entire communication strategy. 

2. It can help make data-driven decisions

Nonprofit databases collect information on your supporters, events, outreach, donations, and more. Your software solution should come with reporting capabilities, allowing you to create and pull reports on relevant data to identify trends that matter. 

The phrase “data-driven decisions” gets thrown around a lot because it makes logical sense to make decisions based on facts. However, there are ways to optimize your nonprofit database to ensure the data you are getting is worthwhile such as:

  • Practicing data hygiene. Unclean data includes duplicated data, inconsistent capitalization and spelling, trivial information, and more. These mistakes tend to accumulate over time as data entry errors, bugs, and miscommunication all happen without any real fault. You can take measures against unhygienic data by forcing data entry forms to require more specific standards before being accepted, but routinely going through your database for the clean up can often be the most straightforward solution. 
  • Running strategic tests. Your nonprofit can and should experiment so it can gain data to answer specific questions. For example, A/B testing involves creating two forms of one document (and “A” and a “B”) then tracking responses to see which version had a greater impact. For example, you might experiment by sending out an email with an image of a group and an email with an image of just one person to test which imaging strategy has greater impact. 
  • Fixing errors. Errors come in all shapes whether they’re data entry related, a bug in the system, or a security vulnerability. Install updates and practice submitting entry forms as part of your maintenance procedures to prevent errors from causing serious damage to your data. 

Stay focused on the larger picture as you analyze your data. Set goals before diving into reports so you can determine what counts as a success and then evaluate how you can turn something into a success. Don’t worry over every data point, but rather use your nonprofit database to employ data towards identifying problems and finding solutions. 

3. It can help segment your audience

In addition to creating donor profiles, you can group and segment your supporters in order to improve your communication strategies. Segmentation is the process of separating supporters based on similar characteristics such as engagement history and demographic data to better donor experiences and interactions. 

Your nonprofit database stores information that should allow you to segment your supporters based on a variety of shared traits. However, not all segmentation strategies are equally effective. 

For example, dividing supporters based on gender to send out blue and pink cards likely won’t result in a noticeable improvement in donor relations. By contrast, segmenting your supporters by the campaign they contributed to and sending messages related to impact shows your nonprofit pays attention to its supporters and their contributions, subsequently building supporter relationships.

GivingMail’s guide to donor management software lists a few useful ways you can segment your supporters:

  • Communication preference. You should keep in touch with your supporters across multiple channels including email, social media, direct mail, and telephone. You should also allow your supporters to specify which channel they prefer being contacted on so you can segment and create messages for their medium. 
  • Engagement history. Who are your supporters to your organization? Are they donors? Volunteers? Both? You’ll want to send different informational messages to donors and volunteers. You can then further segment these supporters by engagement history such as previous donations and event attendance to create more personalized messages. For example, you could segment your audience by event attendance and then further by supporters who donated at the event, crafting a message that recognizes both their attendance and contribution. 
  • Gift size and type. You’ll have small donors, major donors, recurring donors, lapsed donors, and many others. While every donor should receive a thank you, you might decide it’s beneficial to segment your major donors, so they can get special recognition for their gifts. 

Remember not to segment your donors for the sake of it. Make purposeful decisions that tie into your greater fundraising strategies. For example, if you wanted to improve donor retention, you might segment donors by how long they’ve been with your organization to create welcome messages for new and first-time donors. 

4. It can help secure major gifts

While small donations add up, major gifts are vital to your nonprofit’s continued financial health. Keeping track of your donor profiles can help you craft an effective moves management strategy, nurture leads, and solicit major gifts. 

Moves manage involves tracking your relationship with donors including initial meetings, feedback requests, and major gift asks. The goal of moves management is to cultivate relationships that will eventually lead to a successful ask by ushering your donors through a series of steps, the last of which is receiving the major gift and thanking them for it. 

Your nonprofit database can improve your ability to establish and build these relationships. By creating donor profiles for major gift prospects, monitoring where you are in the gift process, and providing data to help adjust your strategy, you’ll follow through on connections and move one step closer to securing a major gift.

Nonprofit database software allows your nonprofit to centralize its data and then put it to use. Find a software solution with communication, reporting, and segmenting tools then ensure your team is trained in how to use them to make the most of your new technology. 

Request demos and reach out with questions to potential software providers, so you invest in a solution that fits your nonprofit. 

About the Author:

Grant Cobb is a fundraising specialist with over 6 years of experience in the nonprofit space. Currently the head of marketing and analytics at GivingMail, he is a huge proponent of data-driven decision-making and the push to bring high-level analytics and fundraising to all.

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