Creating the Relationship-Centric Organization: Nonprofit CRM
It's a challenge to manage information about all your organization’s constituents. But this challenge is common to both commercial companies and nonprofits. A strategy borrowed from the commercial sector has been gaining popularity in the nonprofit sector over the last couple years: CRM.
The result is a lot of frustration. Organizations don’t know where the most current contact information sits on a day-to-day basis. And creating a list of all supporters – for instance, to let everyone know about an event or fundraising drive – can be a multi-day affair.
Here’s what a few of them said:
“It's crazy to try to cobble together all these pieces (One NW listserve, eBase database, What Counts email newsletter tool, and Groundspring for online donations) that weren't designed to work together.”
“None of our databases talk to each other easily. Our main organizational database is great for development and accounting, but is terrible for communications and field organizing. We have to pry out information to compare data, so we don't have an accurate count of how many supporters we even have names and addresses for…You get different answers depending on who you ask in the organization, because everyone runs their queries differently”
“We have different tools for each aspect of contact - email lists, mailings, phone. I would like one place where everything can happen. All of these different systems and cost-saving shortcuts cost tons of time!”
The challenge of consolidating constituent data into one place and making systems work together is common to both commercial companies and nonprofits. A strategy borrowed from the commercial sector has been gaining popularity in the nonprofit sector over the last couple years: CRM.
CRM – Constituent Relationship Management – is the set of processes and supporting technologies used to acquire, retain, and enhance constituent relationships (this definition is tailored from a Forrester Research definition, which states “CRM is the set of processes and supporting technologies used to acquire, retain, and enhance customer relationships”).
“Constituent” refers to ALL people with some relationship to the organization - donors, funders, volunteers, clients and all other people who help an organization to achieve its mission or are benefactors of the mission. “Enhancing the constituent relationship” can mean increasing donation amounts and frequency, volunteering, event attendance, client and supporter satisfaction, or other activities that further the impact of an organization’s mission.
Why should my organization care about CRM?
Supporters are the life-blood of an organization. They provide the money, time, advocacy, and other resources that make it possible to carry out an organization’s mission. However, there are compelling arguments that the loyalty of the average constituent to an organization is waning (see Marty Kearns’s article, “Network-Centric Advocacy”). While the notion of loyalty to an organization likely won’t disappear, nonprofits must become savvier about growing and strengthening constituent relationships. This means having reliable and easy-to-access information about constituents -- and regularly taking advantage of it for fundraising, mobilization, awareness, and other support.
Every nonprofit manages relationships with constituents, whether through a sophisticated tool or through scraps of paper, Excel spreadsheets, and miscellaneous databases. However, managing through these informal and decentralized methods is inefficient if not downright chaotic. Time spent compiling a list is time not spent growing the list. Employees who take Outlook contacts with them when they leave take valuable organizational resources. If you can’t reach all your supporters, you have a smaller base to ask for contributions, to invite to events, to encourage to volunteer, and to educate about your missions. Furthermore, isolated silos of contact data means that supporters may only hear about one aspect of the organization – for instance, they may hear about fundraising needs but miss communications that would tell them about accomplishments or volunteer needs.
Poor management of constituent data translates to greater costs, lost revenue, and decreased impact.
Is your organization Relationship-Centric?
How well is your organization doing with its CRM strategy? Our sector divides into four categories on this critical measure:
- Constituent Chaos. Some organizations have constituent data scattered everywhere. They have irregular, one-size-fits-all communications with supporters, and miss many opportunities to gain more value from constituents or grow relationships. These organizations can be described as being in a state of Constituent Chaos. They are underserving their organizations’ mission by failing to engage supporters more robustly.
- Self-Centric. Self-Centric nonprofits have constituent data consolidated into one or only a few places (they are likely to be newer organizations with up-to-date systems), but focus their attention primarily inward rather than on interactions with the outside world. Like organizations in a state of constituent chaos, they do little to differentiate between their supporters and miss many opportunities to cross-promote different aspects of the organization.
- Enlightened Stone-age. Enlightened Stone-age nonprofits appreciate and actively seek to engage their constituents with high quality interactions, but a multiplicity of data collection mechanisms requires staff to jump through hoops to coordinate outreach.
- Relationship-Centric. The organizations that have contact data consolidated in only a few places, have regular targeted interactions with constituents in which they cross-promote different aspects of the organization and create opportunities to grow the value of their constituents are Relationship-Centric nonprofits. They maximize their relationships with supporters: they regularly increase the average donation size and effectively engage an increasingly wide swath of constituents to take actions to meet the organization’s goals.
How to become a Constituent-Centric Nonprofit
There is no technology silver bullet for CRM. Rather, CRM is an ongoing effort that involves technology and internal process.
Looking for CRM technologies
While there are many tool providers that claim to support all relationship needs out of the box, these claims should be met with healthy skepticism. Unless they help you to manage all of your interactions with all of your constituents, they are a part of the problem. Some vendors claiming to have eCRM, for example, focus on online interactions but fail to deal with off-line activities, such as events. CRM-focused platforms such as Salesforce.com and CiviCRM are promising (and available license-free to nonprofits), but still may require significant customization to handle the broad range of nonprofit needs.
Be careful of narrowly focused systems, such as those for donor management. Donors are important, but they are only one of many types of supporters. If you focus solely on this group, you will miss other important things that an individual can bring an organization. Look for tools that increase your overall outreach and impact rather than focus a certain group of supporters.
It’s also important to look for solutions that allow your developers to connect to and share data with other systems via “open” (public, free, or nominal cost) methods . You should be able to access your data programmatically (for instance, via robust, well documented programmer interfaces, web-services, or XML formats). Closed systems and expensive, proprietary integration packages may be good business for vendors, but they do a disservice to nonprofits and inhibit your ability to get all your data in one place.
Moving From Chaos to CRM
Newer nonprofits will find it easer to adopt a robust CRM strategy. Organizations that can build an infrastructure from scratch have the opportunity to consider their growth, infrastructure, and data strategy from the start. Look for modular suites that cover the types of interactions specific for your type of organization. While their contact-tracking capabilities leave something to be desired, vendors like Affiniscape and MemberClicks are a good choice for smaller membership organizations. Similarly, smaller advocacy-related organizations should look for tools like Democracy In Action or CiviCRM/CivicSpace. There are dozens of vendors, so spend time defining your requirements first. Calculate your total costs over three to five years (including training, support, and maintenance as well as direct software costs) and assume that you’ll need to re-visit your decision in a couple of years, as your organization grows or its programs evolve. Don’t short-change your future by committing to a poor infrastructure.
Established and larger nonprofits face more difficulty. These organizations should generally use a mix of three approaches: 1) replace multiple tools with a single suite; 2) integrate directly between a few essential systems; and/or 3) create an intermediary data warehouse or datamart that pulls in key data from multiple applications.
- Replace multiple tools with a single application suite. If you are already planning to replace a key system or merge data sources, this is an excellent opportunity to look for a larger suite (such as Democracy In Action, Convio, Kintera, GetActive, or Salesforce.com) that could replace multiple standalone solutions. Perhaps your donor database could be replaced with a tool that also manages memberships and email campaigns A smaller or new organization with standard needs (such as tracking individual donors, volunteers, foundation grants, nonprofit partners, and events) can hire a consultant to get started with Salesforce or CiviCRM for between $5,000 and $15,000. Depending on the complexity of processes and the amount of data, larger organizations can spend from $30,000 up to hundreds of thousands of dollars on suites.
Proceed with caution: make sure your new consolidated application will handle all the critical tasks, as integrated suites may not handle any one thing as robustly as stand-alone solutions that focus on a single area. And define how this new system will relate to any data you still may have elsewhere. Will you integrate it with the other system(s)? Can you live with multiple data repositories over the long term? In some cases, constituent data (such as case data) may be unique enough to stand alone.
- Direct integration between key systems. Some organizations don’t want to give up the robust functionality of specialized applications, such as a donor management or an event ticketing tool. In this case, it may be possible to program custom feeds that will synch up the data between applications. For instance, many organizations that use Convio or Kintera to help them with their online presence integrate these tools directly into their Raisers Edge or Target Software donor systems. This can be a very successful solution, especially for organizations that are only tracking constituent data in a few places. The cost of data integration varies from thousands to hundreds of thousands of dollars, depending on the applications involved and the complexity. Blackbaud charges between $10,000-$25,000 just for the license to integrate external systems. Other software vendors offer free, open programming interfaces for your programmer or consultant to use. For help, look to data integrators such as Heller Consulting, Database Design Associates, and Jacobsen Consulting, or someone else with experience integrating the tools you are using.
- Data warehousing or datamart. For organizations that cannot live without a number of different specialized constituent applications, directly integrating each system to every other system will quickly become cumbersome (see graphic below). These organizations will be better off integrating these applications into and synchronizing them with a central datamart or data warehouse. A datamart or data warehouse is an independent data repository that communicates separately with each application and functions as a hub for reporting and data transfers. Typically an organization would do its data entry and maintenance in the original packages, and its mailings, eAdvocacy, program evaluation and other organizing functions from the data warehouse. This approach radically reduces the number of integration points, as shown in the graphic. This is a robust but complex solution which is likely to start at tens to hundreds of thousands of dollars to implement. Again, for help, look to data integrators or someone with experience in data warehousing for help.
Best practices for CRM implementation
- Start by defining organizational and programmatic needs. A common mistake is to focus on possible technology solutions before understanding the organization’s goals and context. Start by identifying the functions that a CRM strategy must address, such as fundraising, communications, partnership management, staff recruitment, or alumni relations. Understand core processes: What does your organization do when you first receive someone’s contact information? How does your nonprofit respond to inquiries? Mobilize support? Report outcomes to funders? To understand your current data situation, itemize every place you currently store information about constituents. Prioritize the worst inefficiencies in dealing with constituents. Don’t proceed to technology solutions until you have a clear picture of the current situation and lost opportunities.
Ensure that the right people are looking at these metrics regularly (weekly, monthly, or at least quarterly). Bring the numbers to the decision makers through easily accessible data dashboards or even through a weekly printed status report put on their desks, if necessary. If executives and board members are not using these metrics as part of their regular vital sign checks of the organization, go back to the drawing board and figure out the right set.
- Resist pressure (internally and from funders) to do it all at once. Give your organization a realistic timeline to move from a hodgepodge of systems to something more organized. Switching tools and changing processes can be both expensive and disruptive. Factor in your organization’s capacity to make the change, both in terms of financial impact and your staff’s ability to adjust given current goals. There may be a short-term downturn in productivity while your staff gets used to new tools and processes, so be prepared to provide the support required, including bringing in extra help for the short term. It can help to introduce easy and uncomplicated wins early on, especially those that involve moving people away from slips of paper and isolated Excel spreadsheets.
- Adopt adequate staff incentives and organizational cultural components. Consider the people issues in addition to the technology side. Make time for training, focus hands-on attention on influential staff members, and be prepared to solve issues of data ownership and management. It can also be useful to create specific incentives to uphold the CRM strategy. Could you add constituent responsibilities to job descriptions? Include key metrics in quarterly performance reviews? Give awards to staff members who find ways to significantly improve key CRM metrics?
- Define a strategy for data quality. Duplicate records, incorrect contact information, or missing data will undermine the quality of reports and decrease your staffs’ use of the system. If possible, put a single person in charge of data quality for your organization. Make sure it’s clear how data should be entered and that all your tools collect data in the same format (i.e. avoid one tool that asks for full name while the other collects first name and last name). A service provider such as the Data Bank (www.thedatabank.com) can help to regularly purge duplicates and verify addresses.
Start planning your CRM strategy now
Organizations that think they can put off their CRM strategy until next year will merely find a bigger and more costly problem when they do get around to tackling it. Relationship-centric organizations understand that the ability to have greater impact on mission is integrally tied to individual supporters.
Data is the currency of the 21st century; those organizations that can successfully use data will thrive.
Paul Hagen is an independent consultant who helps companies and nonprofit organizations scale through the effective use of technology. He provides technology planning, selection, change management, process re-engineering, and project management services for clients. Previously, Paul was a senior analyst at Forrester Research where he led research efforts on technologies such as customer relationship management (CRM), knowledge management, personalization, search and intelligent agents, online education, collaboration tools, and interface design. Paul's career started in the nonprofit and education sector (U.S. Peace Corps, Teach For America, Edison Schools), and he's held advisory board positions for the National Strategy for Nonprofit Technology (now N-TEN), Youth Technology Entrepreneurs, and Purple Sun. Paul holds a M.Ed. from Harvard and a B.A. from Stanford. He can be reached at firstname.lastname@example.org.
Steven Backman and Laura Quinn also contributed to this article. Thanks to dotOrganize for sharing their survey results.