Investing in donor technology can create new opportunities

I invited Alexis Simoneau, CAE, to write this week’s guest column after I received a question about the decision to invest in donor management software. Alex and I met several years ago through our shared nonprofit work.

She is currently the Customer Experience Manager for CharityEngine, a donor management technology company, and lives in Tallahassee. I asked Alexis to share her thoughts about the role of technology in the nonprofit sector and how to approach the decision to invest in donor software. 

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A nonprofit geek’s ode to technology

In my career serving hundreds of mission-driven organizations with technology solutions, my passion for this work grows every day that I get to see its impact.

I’ve seen nonprofit leaders leverage technology to grow their operating budget by 20x without hiring any new staff, increase ROI by 10x as they transitioned from in-person to online fundraising events, and streamline processes so they could reallocate staff time toward a program they’d been dreaming of for years.

These results might seem far reaching, but with the help of technology, this could become reality for more nonprofits. 

How much to invest 

Nonprofit leaders understand how important it is to be responsible stewards of their operating budget. While it’s fitting that those missions are laser-focused on prioritizing funds toward their programmatic outcomes, it’s equally fitting to prioritize the innovations that foster growth.

If your board has big dreams to grow the impact your mission creates in the world, what got you here will not get you there. That impact cannot grow if all operating dollars are allocated to programs.

Not-for-profit is not a business model – it’s a tax status. In the corporate world, executives know that if you don’t make investments, you will not see a return. 

Nonprofits should be investing between 2-5% of their operating dollars on technology. Technology investments pay for themselves and unlike staff, don’t get sick or go on vacation. This return on investment can and should be calculated and measured. 

Prioritize strategic outcomes

While there are many solutions for the many needs, prioritizing your most critical business practices such as finance, fundraising, and data management is a great place to start. If you have solid foundations here, 

I would direct you to your strategic plan. Technology can help you achieve your goals more quickly.

When staff and board members have been following the same processes for so long, the comfort in the familiar can be difficult to give up. Consider the following: 

• The opportunity cost of staff time compared to an automated process; 
• Gaping holes in data that inhibit fundraising success from grants and donations; and 
• Data analysis and audience segmentation can increase revenue from fundraising campaigns. 

If you think technology could streamline a process you feel takes more time or effort than it should, you’re probably right. Let technology do its job so your team can focus on what it's good at - which is probably less about entering numbers in a spreadsheet and more about strategy and critical thinking. 

Prepare for the sales process

When you’re ready to explore the marketplace and schedule product demos, you’ll want to make sure you know your requirements and decision criteria. This is not something a board member or individual staff member should take on independently but should be holistic and thorough across your team. Key considerations include:

•  Time-consuming administrative processes
•  Financial, program, or fundraising reports that need to be generated and analyzed monthly
• Data needs for grant applications 
• Donor, volunteer, program participant and staff experience

Beyond the functional requirements and pain points, you’ll also want to define your budget, timeline, primary users, internal point of contact, and project owner. Smart technology vendors are trusted advisors, but your business practices are your own. Your team and your priorities need to be at the forefront of your search. Keep these ideas in mind to save time and most importantly, find the right partner who can fit your unique needs. 

Let technology work for you

Embracing technology can create more opportunities for your mission to innovate and evolve. Your technology can and should grow with you. Technology investments allow you to streamline processes, generate revenue, and capture the data and impact your donors want to see. Imagine what you could do by leveraging new revenue streams or newly uncovered staff time to make a bigger impact in the world! 

Alexis Simoneau, CAE, has spent the past 9 years of her career devoted to revenue generation for mission-driven organizations. She can be reached at Alexis.Simoneau@charityengine.net. Notes on Nonprofits is produced by Alyce Lee Stansbury, President of Stansbury Consulting. We love answering your questions so please send them to notesonnonprofits@gmail.com. 

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