Many development professionals fall for the marketing hype that says, “If you buy our fundraising software, you are going to raise more money and raise it faster and easier than ever before.” Unfortunately, after that development director has plunked down a major portion of their annual development budget to buy a fundraising database program, they realize that it is still going to fall to them to get out and solicit the gifts that will fund this year’s operations.

By: David G. Phillips

This new version of fundraising software from that big firm and that web based fundraising software from this exciting startup firm—all marketing themselves as fundraising software, when they have little or nothing to do with fundraising and more to do with record keeping and accounting. Why? Because with the pressure on successful development directors to win more charitable dollars for their organizations, an advantage in fundraising is what development officers feel they need and the software manufacturers are not unaware of that fact.

Many development professionals fall for the marketing hype that says, “If you buy our fundraising software, you are going to raise more money and raise it faster and easier than ever before.” Unfortunately, after that development director has plunked down a major portion of their annual development budget to buy a fundraising database program, they realize that it is still going to fall to them to get out and solicit the gifts that will fund this year’s operations.

Often development directors, in their quest to please their constituents and their bosses, hear the marketing message that tells them how seamlessly the software integrates their word processing files with their donor files (which is going to let them merge their fundraising direct mail letters almost effortlessly). They hear talk of raising money over the World Wide Web and accessing their files from the road over the Internet. But, when push comes to shove, they do not have any prospects to whom to send the vast new pile of direct mail, nor do they have the money to pay (even the discounted) postage on this mail. Nobody is visiting their website, so it is not generating any gifts. A school, for example, cannot afford a laptop computer to read the files off the Internet from afar, much less a secondary development officer traveling on behalf of their small school.

Let’s face some facts here. Switching to a big name database software program is going to require a significant investment. A development professional must carefully analyze the potential return on this investment before determining whether to proceed with the investment, when to do so and which product to install.

Small charitable organizations that already have a mature development operation, those with hundreds or thousands of annual contributions of various types and levels and those who already have a development data-entry specialist are good candidates for such a system. It is probably better to make this investment before adding a second development officer.

Whatever you do, examine the alternative systems carefully and see them work in a client’s offices outside of your own. Check the references of the company you’re considering and see if you can corroborate them on your own. Among the more prominent name brands of software for fundraising and record keeping are: Blackbaud’s Raisers Edge, Donor 2, Donor Perfect, Metafile, Paridigm and Target. One interesting new company, Etapistry, is creating the only database fundraising program that is entirely web based. That means no additional investment in hardware/software.

Most small charitable organizations can get by with a good high-end office package, such as Microsoft Office or WordPerfect Office Suite, both of which offer a database program for record-keeping, a spreadsheet for accounting and a great word processor for merging out mail or e-mail. These packages usually work better together with their sibling programs than they do with so called “fundraising software” made by third party vendors.

Until your organization gets large enough that it outgrows the basic system requirements that are provided in a high-end office package, I would recommend you spend your money on things that are more closely associated with your mission (such as special events, direct mail, or adding a development assistant or data-management specialist). The truth is, you will not raise any more money because of the software, but it may save you lots of time and make your organization more efficient.

My recommendation would be that you maintain a basic office package for as long as you efficiently can. Two budget years prior to implementing the fundraising database package, I would encourage you to budget and escrow approximately $5,000 per year for the purchase of a computer and a basic one-user license for the best software you can afford. Then, when you implement the system, you will have the money in place and you will be able to learn to use the basic system and let it grow with your organization.

One last word of caution. If you are not a large regional or national organization, but a local charity with a limited budget, please don’t let them sell you the ten-user system with all the bells and whistles you don’t need, like the special acknowledgements package, the donor recognition package, the matching gifts program, the special events program and on and on. Request the price for the basic version of their “top of the line” windows based product and you should be able to purchase this software (+ $7,500) and the hardware (+ $2,500) for about $10,000 total.

David G. Phillips is president of Custom Development Solutions, Inc. (CDS). CDS has become one of North America's best and most sought after fundraising consulting firms specializing in the strategic planning and tactical execution of capital campaigns for non-profits throughout the United States and Canada. More information on CDS can be found on the web at www.cdsfunds.com If you have a fundraising question for David, please call 800-761-3833 or send an email to dgp@cdsfunds.com.