Donor Management Software for Nonprofits

Choosing a good fundraising software for your nonprofit fundraising campaigns is a vital part of making sure every fundraising event you host runs smoothly. Your fundraising software needs to have the right tools and features for building campaigns and running profitable activities for your donors.

More importantly, however, your fundraising software needs to assist you in donor management. Donor management software not only helps you keep track of all the donations you receive from your online donors, it also provides you with access to all the communication you have with your donors. This goes a long way in helping you establish positive relationships with your offline and online donors, increase donor retention, and getting donors to invest in your nonprofit organization over the long-term.

If you’re looking for the donor management software that’s best for your nonprofit organization, keep reading. This article will take an in-depth look into donor management and how tools like Customer Relationship Management (CRM) software applies to nonprofit fundraising campaigns. We’ll also examine fundraising concepts like the 80/20 Rule and see how they apply to modern-day fundraising.

What is Donor Management Software?

Donor management software is a tool included in fundraising platforms like PayBee. While inviting guests to your fundraising events, you’ll have opportunities to collect information about your in-person and online donors, including their names and contact information. During the event itself, you’ll collect even more information, such as the amount they donated and how they chose to donate (credit card, PayPal, check etc.).

Donor management software stores and organizes all this information and then makes it easily accessible to you when you need to make decisions about your fundraising campaigns. For instance, you can use special filters to sift through the data and discover which of your donors have donated the most to your campaigns year after year. This lets you know who you can rely on (and who you should definitely invite) to your upcoming fundraisers.

Conversely, learning more about donors who give less frequently can also help you organize better fundraising events. For example, if your donor management software reveals certain donors give more generously during silent auction events, this could be an indication that you should favor those activities when your guest list includes many of those donors.

Ultimately, donor management software is something every nonprofit organization needs to invest in, especially if you plan to grow your organization. Using fundraising software to manage donor information is more reliable and simpler than relying on a spreadsheet of your donor information or your staff’s memory of donors. By using fundraising software, you can better analyze your past donor data and develop insights that help you build stronger relationships with new and existing donors.

What is CRM in Fundraising?

You may have heard the term “Customer Relationship Management” or CRM used in business management. CRM software helps for-profit companies manage customer relationships by providing salespeople with up-to-date information on their clients so they can build better relationships with them and retain their business.

If this sounds familiar, it should. When applied to nonprofit organizations, CRM software tools are essentially a type of donor management software. Where for-profit CRMs focus on making the sales process easier, however, nonprofit CRMs offer fundraising software tools that assist in online giving and creating donor engagement metrics.

Here are some of the tools and features you should look for when choosing a nonprofit CRM or donor management software for your nonprofit fundraising campaigns.

Fundraising campaign tools

Your donor management software needs to let you build multiple fundraising campaigns with ease. This goes beyond simply building a donation form for your website — you’ll want fundraising software that can customize each donation form by offering different ways for visitors to give to your nonprofit organization. For instance, PayBee’s software allows you to offer a recurring donation option that allows donors to give a certain amount of money to your programs month after month.

Other useful fundraising software tools include:

• Customizable donation buttons: PayBee allows you to include donation buttons on all your web pages, providing multiple calls-to-action for visitors.
• Text giving: More people are giving through their mobile devices. Text giving makes donating as simple as sending a text.
• Peer-to-peer campaigns: The PayBee system lets your staff and volunteers build their own individual donation websites to share with their support networks and then direct all donations back to your main fundraising platform, making organization much easier.

Donor communication tools

Building strong relationships with your donors means keeping the channels of communication open. Your fundraising software should allow you to do everything from automatically sending fundraising receipts to delivering thank you emails to donors when they give to your organization.

Better donation communication tools let you separate different types of supporters into individual groups based on their characteristics and demographic information. This donor segmentation enables you to personalize your communication even when contacting hundreds of people.

For example, your donor management software tools can filter out donors who live out-of-state when you’re sending out invitations for an in-person fundraising gala. This increases the likelihood that the people you do contact will attend your fundraising event. Conversely, if you plan to host a virtual or hybrid event, you can expand your donor pool, since it’s easier for online donors to attend your event virtually.  

Multiple payment processing tools

Good online fundraising software like PayBee offer multiple payment processing options for offline and online donors, including PayPal, Apple Pay, bank transfers, and credit card, as well as more traditional options like check or cash. This improves your relationship with donors by showing them you can accept payment in the manner most convenient for them. Many donors appreciate this convenience so much that they’ll even pay credit card processing fees and allow your nonprofit organization to retain more profits — which is why PayBee’s fundraising software offers you the ability to offer guests this option.

Offering multiple payment processing options also provides your donor database with more valuable information. By taking time to analyze how your guests are sending their donations, you’ll have a better understanding of your donors and can take steps to make your galas more convenient for them. For instance, if you discover most of your guests prefer to donate via credit card, supplying your staff with more mobile credit card readers can help with check-out.

Tracking and reporting features

As stated, donor management software not only stores your donor information but also lets you keep track of your fundraising efforts, donor communications, and other important donor data. You should be able to easily sift through this data and spot patterns and trends with your donor activity that will alert you to how you can improve your fundraising events.

Fundraising software should make it easy for you to share with your staff and volunteers, allowing them to see how they can change existing fundraising practices to improve relationships with new and long-time donors.

PayBee keeps track of and automatically generates reports of all your fundraising activities and your donor interactions. You’ll be able to see at a glance which donors contributed the most and which of your activities proved the most popular with the most people. This helps you determine how you should structure your future events so they’re more popular with donors (and more profitable for you).

What is the 80/20 Rule in Fundraising?

One of the great things about modern fundraising software is its ability to widen your support network by letting you hold your fundraising events online and in-person. By increasing the number of people who attend your fundraising galas, you increase your earning potential. But which of these offline and online donors should you really be reaching out to in order to maximize your revenue?

The Pareto Principle — also known as the “80/20” rule — is a concept that states that for many outcomes, about 80% of consequences come from 20% of causes. In the case of fundraising, this is often interpreted to mean 20% of your individual donors will provide 80% of your revenue.

This tends to be truer for nonprofit organizations that receive large bequests and major donations from their supporters than it is for nonprofits that receive most of their funding from monthly donors who make recurring donations. One report indicates nonprofit organizations with all monthly donors get about 45% of their revenue from the top 20% of their recurring donors.

Conversely, charities and nonprofit organizations that attract wealthy donors who give large one-time donations do follow the Pareto Principle more closely, with about 73% of revenue coming from the top 20% of donors.

So, what does this mean for your nonprofit?

It means that by using donor management software to keep a closer eye on your donor activity, you can determine how much your current pool of donors affects your bottom line.

If most of your donors are recurring donors, you’re not benefiting from the Pareto Principle as much as other nonprofit organizations. You may want to focus your fundraising efforts on finding more generous donors who leave nonprofits bequests and large, one-time donations.   

On the other hand, if your donor management reports show that you’re receiving close to 80% of your revenue from a very small number of donors, you may be too reliant on a few benefactors. Reaching out to a wider pool of donors and offering them the option of becoming recurring donors may be a good way for you to ensure your funding remains more consistent, especially if you lose one or more of your major donors.

In both cases, donor management software will help guide your fundraising strategy moving forward. You’ll be able to spot which of your donors consistently provide large donations, making them excellent supporters to form strong relationships with and retain for the long-term. Likewise, you’ll be able to track how well recurring donations provide your programs with a stable source of funding without straining your donors’ budgets.

What Fundraising Platform is Best for Your Nonprofit Organization?

So, what is the best fundraising software for nonprofit organizations? Honestly, the answer to that depends on how your nonprofit organization raises money, and how you see it fundraising in the future.

We do recommend that you choose a donor management software that lets you easily develop multiple fundraising campaigns. Investing in software that makes communicating with your donors and organizing their information will also become more important as your support network grows. And of course, it’s essential to have a fundraising platform that accepts multiple forms of payment.

PayBee provides all of these tools and features, allowing you to assess your current fundraising strategies and then develop them as you see fit. To see how well our fundraising platform fits your needs, please sign up for a free demo of our platform. You’ll be able to experience first hand how intuitive our platform is for your guests to use. You’ll also be able to participate in a mock live auction and ask all of your questions to our team of experts. Donor management software provides one of the best ways to enhance your fundraising events, so sign up for a free demo and see how we can help your nonprofit organization level up!

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