Optimizing Your Donor Database for Greater Impact

In this episode, Nathan discusses the vital role of donor relationship management systems in enhancing nonprofit fundraising efforts. Providing some practical insights and tips, Nathan explores key features such as donor management, fundraising tools, and data analytics, we emphasize the importance of selecting the right database tailored to an organization's needs.

Chapters

• 0:09 Effective Nonprofit Database Management
• 13:24 Database Integration and Security Considerations
• 23:28 Show Recommendation Request

Transcript

Nathan Ruby: 0:09

Welcome to the Practice of Nonprofit Leadership. I'm Nathan Ruby. Today, we are going to be talking about databases. Now, this is important for you because if you have a good database, because if you have a good database, well and some people call them CRMs, customer relationship management CRM comes from the for-profit world, the for-profit sales world, to be exact. That's where the acronym came from, so I guess for us it'd be donor relationship management, right? So we'd call it. What is that DRM? So DRM for us. But anyway, if you have a good database and that is or DRM, or CRM, whatever you want to call it, it will help you raise more money, and so it is worth the time and effort to get the right one to help you be the most successful you can in your fundraising program. So what does that look like? Well, let's take a look at it and see. All right, here are a few things that you need to focus on when you're looking for your first database, or if you've got a database that you've kind of outgrown and you need to upgrade, so this is relevant for you too. So, thegrown and you need to upgrade, so this is relevant for you too.

Nathan Ruby: 1:26

So the first thing we want to look at is donor management. How does this system help you with donor management? And by that we mean tracking donor information. So is it easy to store contact details so phone numbers and emails, and summer homes and winter homes in Florida or Texas or Arizona, wherever your donor might, winter Giving history? Is that an easy thing that you can find and look at, because that becomes very important when we're asking for gifts this year. Can you track communication preferences, such as no mail or only send an appeal letter? And now, as we are getting, we all of us fundraisers are a little bit more and more and more on online giving and email, looking for gifts through email and online. Is there a place to do no email or no email on specific appeals? That's actually something I'm dealing with. Now. I've got a couple of donors who have asked to not receive. They're fine with the direct mail, but it's the email that we're doing that they want to manage, and so is that easily manageable? And the answer on the database I have is not quite as easy as I would like it to be. We found a workaround, but it wasn't quite as easy as it should have been.

Nathan Ruby: 2:56

And then, of course, any other relevant notes. Is there a notes section to where you can make notes about conversations that you had with donors, donor preferences. And here's one that I do with my donors and they are in the notes that I keep on my donors. I track what their favorite drink is, whether it be an adult beverage or a Coke, or Pepsi or Diet Coke, or I've got one donor that's diet Dr Pepper. I write that down because then the next time we meet, when, if you're at a restaurant or someplace like that and we're getting ready to order and I could say diet Coke, right, or diet Dr Pepper, or and it's, and it's amazing how people, if I remember what you drink, that means we are in a relationship and it is a reinforcement for that donor to say, oh, my gosh, nathan, really we're in a relationship, he really knows me and that is a big deal when it comes to fundraising me and that is a big deal when it comes to fundraising. So I'm not saying you have to do that, but that's where I keep that information. It's not because I have an amazing memory and it's because I wrote it down and I looked at it before I went into the restaurant, so anyway. So remember that stuff and that's a place to put those notes.

Nathan Ruby: 4:22

What else is in the donor management section? Segment donors. Can you track donors by different criteria? So maybe you'll be looking for any donor with 500 and above because you're going to do a special invitation to them to the gala. Or maybe you're looking for people, donors, who gave last year less than they did in 2023. That's actually something you should be looking for you should be going through your database now and who gave less in 24 than they did in 23. So can you segment donors that way? And then, last, of course, is gift tracking, and so, just you know, is it easy to be able to keep track of one time, somebody who gave one time during the year, or your monthly donors or people that give once a quarter? Is it easy to track that, the frequency of gifts? So, under under donor management, you know, donor information, segment donors and gift tracking. Those are kind of the three things that we're looking for.

Nathan Ruby: 5:30

Next is fundraising tools. So this is a little bit more about okay, how are they going to help you raise money now, all right, and so there's a couple, two, three ways they could do that. One is donation forms, and donation forms is how you can do easily online giving through customizing the forms, and I don't know all the details on that and how to walk you through the or explain that, because I just know it works and I know that it needs that. So that's got to be. One of your question is how easy are the donation forms to work with and can I understand how to use them? So donation forms through online giving, campaign management, to track and manage your fundraising strategies? So we're going back to your fundraising plan and you're going to have, you know, depending on on how sophisticated and how big your your fundraising program is two or three or four. Some of you may even have five uh fundraising strategies that you're doing, and so it is important throughout the year to be able to track that. So is our uh gala fundraiser? Are we uh, you know ahead or ahead or behind of where we want to be? Our gala is in a month, but our 5K run is in the fall. We've got four or five months, but are we on track for that? And oh, how's our direct mail doing so to easily track those individual fundraising strategies and maybe even down to the tactics level? It's important for your database to be able to help you with that, because the database, the CRM, should help you. It should help you with these things so that you could do them faster, quicker, more accurately and you don't have to spend so much time trying to figure out and working on piece of paper and pencil to try to figure out where you are in these things. So campaign management is a piece of the fundraising tools.

Nathan Ruby: 7:34

And then gift acknowledgement, and this is really important in the giving cycle because the gift a lot of people, a lot of executive directors, make the mistake and they think that the gift acknowledgement is the end of the gift and I mean, I guess technically it is the end of that particular gift. So somebody writes a check, puts it in an envelope and sends it in. Somebody goes on your website and clicks the give here or give now button and they give, or they find a QR code on your direct mail piece and they use their phone to give online. That way, however, they make their gift. That's fine. And then the acknowledgement letter goes out. So they get a letter it says thank you very much and at the bottom of the letter maybe it's got the tax receipt documentation on it, or maybe you do that at the end of the year. Either way is OK, but whatever you're sending that letter out, your database should make that simple and easy for you and it should be a seamless system or a seamless process because, yes, while it's the end of that particular gift, it also marks the beginning of the next gift.

Nathan Ruby: 8:56

So when you're sending your donor a thank you letter, that is, you are now gearing them up for their next gift and the next gift and the next gift, and so we want that gift acknowledgement to be really good and we want it to go out rather quickly. If we could get that out the same week, that would be awesome. Uh, 48 hours would be even more awesome. Manure, awesome, awesomer, awesomer, awesomest Uh 48 hours is is. We'd really like it to be that quick, but you know some organizations we just can't do that. We just can't get to that standard. Uh, and so within a week would be. You know, in that case, a week would be great and anyway. So that thank you letter is part of that important process.

Nathan Ruby: 9:43

Okay, number three reporting and analytics. Your database you want it to be able to spit out reports for you. You know reports for you know donors and their tax requirements for auditing, foriting for tracking just your overall fundraising. And some databases are more geared towards a higher level of skill set when it comes to putting in queries and running reports, and the more flexibility you have in creating the report, the more complex the setup of the query is, which means the more knowledgeable you need to be in databases and running queries. You need to be in databases and running queries, and so. So, for instance, if you want to run a list of every donor from your town, uh, for last year, so you would have you know whatever name of your town, I want every donor who gave in that town. Um, or maybe that's not the best example, but we'll with it because that's what we started with. So, any town I've got X town, I want every donor in that town.

Nathan Ruby: 11:04

Okay, so it runs the list. Well, do you want the list to be in this format? Do you want it first name, last name, address, phone number, email, gift amount? Do you want it to be just first name, last name, gift amount. Do you want it to be first name, gift name, or first name, last name, phone number and cumulative giving for the year? So the more flexibility you have in creating what the list looks like, the more complex it's going to be to create that list, whereas some databases will just have one way or maybe two ways of looking at it. So if you want more flexibility in what reports look like, you better be able to know how to do queries, or at least be willing to learn how to do it. And so that's just again. One's not right and one's not wrong. It's just. If you don't have experience in running queries, it's way easier to look at databases that maybe have a little less flexibility, but they just run out the basic reports for you.

Nathan Ruby: 12:20

Okay, next would be donor trends. You know, we want to know, we absolutely want to know if we had a donor who didn't give last year, holy smokes. We really want to know who that is and then we could decide. You know, is that somebody we want to call? Is that somebody we want to contact and reestablish the relationship? But we won't know that if we don't run the report. So you definitely want to have good donor trends. So lapsed donors, monthly donors, your largest donors, so different ways to segment those donor trends to help you make decisions about how should I engage with this donor and how should I do that. So that's going to come from reporting analytics. And then the last one on this is campaign metrics. We want to be able to evaluate the success of specific campaigns, um, and the reason you want to do that is you want to be able to to determine the ROI, the return on investment.

Nathan Ruby: 13:24

So we did, uh, you know, we did, a direct mail piece in September. Well, how did it do? Did did that come back the way we thought it would, based on the expenses of, of, you know, doing it, writing the letter and, you know, sending it to the printer to be formatted and the design of it. And then you know, we had envelopes and we had, you know, printing costs. So we had mail cost and then we had staff cost of doing the thank yous. You know we had that all in all, that expense. And then we look at the total revenue from that, from that mail piece, and then we could say, ok, that worked or no, that didn't work. But we can't do that if we can't segment out that metric and determine what was that September appeal letter, how much revenue came in on that. So you've got to make sure that your databases can do that. So, all right. So reporting, that is reporting analytics.

Nathan Ruby: 14:19

I think another one that's really important is looking at integration with other tools. So how does the database integrate with how you are giving online? So if you're using, you know, stripe or if you're using PayPal I don't know, people still use PayPal. I think PayPal is getting a little dated, um. But whatever, whatever online giving processing system you use, how will that integrate with the database? And that is a big one, because if your processing doesn't talk to the database, you're, you're, uh, you're you're happy to double entry and you're just making things more complex for you. So if you already have an online payment processing system you use and you're looking at a database, that's one of the first questions I'd ask is do you integrate with whatever you're using? So, payment gateway integration?

Nathan Ruby: 15:21

Another one that I would really be interested in is your accounting system. Does the database interact with whatever accounting system you're using? Because if it does, then that could save your accounting staff a ton of time. I mean, how cool would it be if somebody comes onto the website, hits the buy now or buy now, the give now button. They make their gift online. It goes right into the database, it goes right into your accounting system and you don't even have to enter that. That is seamless. So I definitely would check accounting system, and you don't even have to enter that, that is seamless. So I definitely would check accounting system. And then any other systems, any other computer systems you're using. I don't know what they would be, but if you've got other databases that you're using within your organization, to ask the question if they would integrate with those. So that's something that's important.

Nathan Ruby: 16:26

And then, lastly, security and compliance. Now I will again say I am not a data security expert. I don't know that stuff. I know people who do know it, but I don't personally know it. But those are some questions that you need to ask is because you're literally trusting this organization with your donors, financial information, and so you know what are the encryptions, uh, where, where's the data stored, what are the protections for that? Um, there are some privacy laws, uh, that are out there. So, um, you, so you just ask the question and if you feel like you're not getting the answer that you kind of thought you were, if you just don't understand it, then I would definitely find somebody, a volunteer, somebody with some online data security and compliance knowledge to help walk you through that. I think that would definitely be worth the extra effort to find that out.

Nathan Ruby: 17:24

All right, so you know, I think, when you boil this all down there are, there are three quick things that, like that, are pretty important to consider, um, outside of of the stuff that we've just talked about. Uh and one is budget and the the greatest database. There are databases out there that are the Lamborghini or the Mercedes-Benz or the Cadillac of databases and they come with a price tag that is the same as a Lamborghini, a Mercedes or a Cadillac. They are really, really expensive, and not only are there upfront costs, but then there are monthly costs that go on and they are really pricey. And does every nonprofit need that? No, no, you do not need, especially if you're just getting started and this is your first database that you're really looking at net.

Nathan Ruby: 18:26

Don't spend a massive amount of money, because often when you have big databases that are expensive, they come with a level of complexity that is overwhelming, and if you don't have dedicated staff to be working in that database every day and to have the training and the repetition, so that I mean you could be trained something, but then if you don't do it for six months, we forget it. So I would be very leery of high end, expensive databases. If this is your first one and you've got a $200,000 budget or a $50,000 budget, there are some free options out there of databases that will do you just fine and will be totally adequate for your needs without spending a ton of money. So, budget make sure you take your budget into account.

Nathan Ruby: 19:26

Next is ease of use. Make sure you take your budget into account. Next is ease of use and again, just like I was talking with budget, there are some databases are designed for simplicity and will give you the basic information you need at the touch of a couple of buttons. Other databases are like I was talking a little bit earlier, are built for more flexibility, and with flexibility comes complexity, so they're harder to use. Now you get to, you can cut your information 14 different ways and look at it. Do you want to look at it in landscape? Do you want to look at it this way? Do you want to look at it that way? Do you want it to be this? And that's all great and those can be very helpful. But if you're just getting going and you're kind of getting your feet wet in this, I would choose simplicity over complexity every day of the week.

Nathan Ruby: 20:22

And then the third one is scalability. We're going to make the assumption that your fundraising is going to grow and get bigger because you're using a database and, like I said at the beginning, if you have a database and you use it well, it will help you raise more money. So we're just going to make that assumption that we're going to get bigger as we go. So I would be asking about scalability, you know, as maybe we we don't need this service now, but as we grow, that might be something we'd be interested in. How does, how does this database grow with us? Um, now, some of them will have the capacity to do that and others won't, and so I, I I will always recommend that you try to not switch databases if at all possible, because when you convert from one database to another, it is absolutely, excruciatingly painful. So we try to avoid doing that.

Nathan Ruby: 21:24

However, that said, you may have to at some point. You may have a database that is very simple, very basic, and it does your needs very well, and then, down the road, two, three, four years, you've maxed out its capacity and you're going to have to go to something different. That's okay, I wouldn't worry about it. That's okay. I wouldn't worry about it If your budget is zero and there are some very good databases out there that are free up to a certain level of donor entries, of records. They call them a record. So if you have a donor, that goes into the database, that's one record. So there are some very good databases out there, very simple, that will do the job for you.

Nathan Ruby: 22:10

If you have 50 donors and then all of a sudden, two years from now and you have 200 donors or 300 or 400, and you've outgrown the database, you're in, that's okay. We'll take that as we'll be happy about that, and we will grin and bear going through a database transition or transfer. But if we can avoid it, that would be good. So, budget ease of use, scalability yes, absolutely 100%. If you use a good database or CRM or what do we call it, drm, if you have a good database and you use it correctly, it will help you raise more money, no question about it. But and this is a big but a CRM is like anything else If you don't use it, it won't help you raise a penny. So spend the time and energy to get the right database for you and your organization and then use it, and it will pay for itself many times over.

Nathan Ruby: 23:28

Thank you for listening today, and can I ask you a favor and this is from Tim and I both If there is someone you know who you think would benefit from our show whether it's this show or one of the other episodes that you've listened to could you just forward them a copy of the episode and by doing that, you would introduce them to this show and and maybe it'll help them like it helped you. Um, that would. It would be a huge favor to us and tim and I would really really appreciate that. Okay, that's all for today, until next time you.