Is Your Donor Management System Hurting Your Fundraising?

Here is a 5 Question Audit – to Help Avoid Hidden Costs and Lost Revenue

Many businesses believe that building an ongoing relationship with patrons will boost their participation and their giving. One of the most important aspects of this method is keeping the records and notes of every patron. However, does this lead to more revenue? Section 18A

Not necessarily.

The reasons for this are varied however the outcomes of reliance on Donor Management tools are discouraging. Traditional fundraising strategies offer 15% growth by efficiently managing data. But the results are slowing down. There is also a loss of donors, which is posing serious challenges to goal of fundraising.

To determine the validity of the claims, consider asking you five of the following questions

1.) Where do my contributions originate?
Take a look at your donation programs. What amount of revenue are you generating through subscription fees, membership fees and patrons with high net worth as well as registration fees and sponsorship fees for participation with special activities, donations from the government and private foundations or sales?

Utilizing traditional fundraising strategies has advantages, namely that they are well-known and aren’t limited in the scope and impact. They are appealing to similar patrons, but how do traditional fundraising strategies effective in the current economic climate? A lot of patrons have been hurt in tough times and reduced their donations to charities.

2.) Are my typical fundraising strategies and campaigns generating enough funds to finance the organization’s core projects this year? In the next year? Then what? Many non-profit organizations’ budgets for their projects each year increase. To keep pace with the growth of their programs, an organization has to boost their fundraising targets however how can they do this? It could be by increasing the average donation amount or by increasing the number of donors or grants. The planning of growth in budgets and plans are essential when designing the growth plan.

3)What is the cost of hidden expenses? Apart from the costs of acquiring the system, set it up, and keep it running donor management systems, campaigns should be able to include workshops, training costs and then add costs for design advertising, marketing printing, sorting, the assembly of direct mail pieces , whether it’s for the purpose of a newsletter, invitation reminder or thank you receipt. The time of volunteers and staff members should be added to. It is crucial to make the most of the money spent on volunteer capital for an organization and to be efficient in managing the time spent by staff members.

It is essential to think about all expenses. The most straightforward costs to measure are those that are not covered by the budget or financial expenses, the others are contributions in kind which provide an apparent worth for the items or services that would have to be paid for. The most obscure hidden cost can be found in timing… What amount of time is spent by staff, volunteer, members of the board, and supporters to develop, manage the use, control and conduct a follow-up appeal or community-building activity.

4.) How is the information about donors used to develop campaigns? Many Donor Management Systems provide multiple messages based on the patron’s characteristics, like the size of the gift and where the patron lives and what charitable causes they traditionally contributed to. This method could lead to an amount of donation that is a goal for various levels of donors, which means that there are limits on giving for those who spend more or make small gifts appear insignificant.

5.) Does it provide the possibility of growth and a the ability to raise funds beyond the current patrons, members and database of donors? A limiting factor of Donor Management systems is also the way they handle patrons who are not in the database. In certain donor management systems, it is necessary to establish relationships before asking for assistance. Do you think that is a good strategy?

In a conversation with a regional non-profit arts and humanity organization about the possibility of increasing their donors I was surprised by the response. The non-profit organization was unable to achieve doubling the number patrons. The cost of entering and maintaining the system would be prohibitive. They have an Donor Management system that limits their fundraising potential.

Follow this five-step audit. Examine the results, and then scale back on traditional events that bring in significantly more donations than the expenses for running the event Look for new methods to extend the reach beyond the limits in the databases of donor donors and then discover ways to automatize the process to ensure that cost of fundraising is decreased.