New integrated online software tools lead to more possibilities for nonprofits. How do you choose? Internet strategist Michael Stein describes what's available and offers some considerations when choosing tools that can help with emailing, online donations, advocacy online, and more.
In 2007, nonprofits are seeing more options for online software tools than ever before. These tools can help organizations communicate via email, raise money, update their websites, conduct online advocacy campaigns, register people for events online, and generally manage member and stakeholder information.
In addition to several large, established online software vendors, a number of smaller and mid-sized companies have begun offering nonprofits new and affordable tools. A characteristic of these tools is that the various modules within a software suite are integrated together, and are able to share data seamlessly between them. This integration is making possible new capabilities that up until now had only been available at a much higher cost.
The beneficiaries of these new choices are nonprofits themselves, who will benefit from costs savings, more vendor choices, options for more involvement in the software development process, and software tools that better fit their actual needs.
Of the 100 or so Internet companies that serve nonprofit needs today, many have developed unique software offerings and occupy specific niches such as walk-a-thon donation processing, online auctions, and event registration.
The largest vendors have grown rapidly in size in the past few years, due primarily to the infusion of venture capital investments and the acquisition of other companies. Companies such as Blackbaud, Convio and Kintera have concentrated their sales efforts on the larger nonprofits, which deliver larger and more predictable revenues.
These companies have changed how nonprofits are using the Internet to engage their constituents. The integration of email messaging, online fundraising, and online advocacy modules among others allows nonprofits new and more efficient ways to engage with stakeholders using the Internet. With these tools, a nonprofit can easily send a targeted email to a list of people who have donated money recently, inviting them to a special event. Integrated tools could also provide the names of people who have been the most active in online advocacy campaigns, and invite them to local house parties, with each message geographically customized.
On a parallel development track, online software companies who target small and mid-size nonprofits have been growing as well. I’m particularly excited by the sophistication of several new contenders. Many of these tools have matured to offer many of the same integrated functions as their larger brethren.
In this category, I’m thinking of vendors such as Action Potential, AMP from Radical Designs, Antharia, Artez Interactive, CitizenSpeak, CitySoft, CiviCRM, CivicSpace on Demand, Democracy In Action, eTapestry (recently acquired by Blackbaud), LocalVoice, Orchid Suites, Papilia, andThe Data Bank, among others. Predictably, this tier of companies is beginning to challenge the larger vendors for clients as nonprofits look for cost savings, seek new feature combinations, or prefer to work with smaller companies.
A third tier of online software vendors offer tools, often called point solutions, that power a single part of an organization’s Internet needs. These vendors offer user-friendly, affordable, and reliable means to conduct individual activities such as collecting online contributions, storing email addresses, sending email messages, or selling products.
In this category, I’m thinking of vendors such as Constant Contact, Goodstorm.com, ChipIn, Salesforce.com, Network For Good, NPO Groups, Topica, Vertical Response, and Typepad, among others. Some of these companies do not specifically target nonprofits as clients, but their products have nevertheless become favorite tools for some organizations. These vendors’ tools are not primarily designed to integrate with other tools, though data can usually be imported and exported fairly easily.
As an Internet strategist who is asked regularly to recommend online software tools to nonprofits of varying sizes, I am seeing some head scratching by nonprofits about how to choose among these options.
The most frequent question I hear is how to distinguish between the middle tier and upper tier of integrated vendors. It’s a smart question: as I mentioned earlier, the evolution of middle tier integrated software tools has blurred distinctions between the two.
The upper tier of large online software vendors has set the standards for performance and responsiveness in this area. These standards have been honed by servicing the needs of some of America’s largest nonprofits, who not only manage huge amounts of constituent data and sophisticated marketing campaigns, but also must respond in times of national and global crisis. The needs for September 11th, the Asian tsunami, and Hurricane Katrina have defined many current practices in stakeholder engagement, online fundraising, and email communications.
The large software vendors are distinguished by their emphasis on rapid and continual product development, dedicated client account managers, and highly advanced tools for stakeholder relationship management. Nonprofits with very large member lists (over 100,000 names) will find comfort in their experience with established online programs and leaders in the field. Their emphasis on flawless uptime performance and redundant systems will reassure organizations that regularly operate in times of crisis. Nonprofits with complex marketing and fundraising requirements will also gravitate towards these larger vendors, which have tools to suit a variety of nonprofit needs including event registration, walk-a-thon management, online auctions, email personalization, split list testing of email messages, and conditional content tools that allow sophisticated email message design and delivery. Finally, the ability to use these tools along with integrated website content management systems (CMS) allows these vendors to support nearly all nonprofit Internet needs under one roof, with the ability to seamlessly move stakeholder data between the various modules.
This fully integrated functionality comes at a cost. Prices vary widely depending on what modules you use, the size of your list, and how desirable a client you are to the vendor, but range anywhere from $1,000 to upwards of $10,000 a month. Setup fees start around $5,000 and rise considerably when migrating a site from another system, starting a site from scratch, or customizing tools for specific needs.
The middle tier software vendors also offer many of these same benefits. While many of them lack the experience in managing very large member lists, their software tools can accommodate fairly complex needs for messaging, segmentation, and reporting. Most offer the key tools that nonprofits need for stakeholder outreach, but there are often fewer feature options than those provided by the larger vendors. Simply put, they may be a year or so behind the larger vendors in terms of tool development, but the gap is clearly closing.
This middle tier spans a broad range of price points, starting at about $100 per month and ranging up to compete with the larger companies above at $1,000 per month or more. Setup fees tend to start in the $1,000 range and can scale up considerably with migration or customization.
The third tier of online software vendors are also playing an important role as nonprofits go shopping for one easy and affordable tool to send out action alerts without having to reinvent, build, or invest in a whole system. There is clearly a place for single tool vendors in the nonprofit tech economy that favors affordability and flexibility.
This third tier has fairly low price points, starting at about $15 per month, and setup fees from $0 to $1,000. Naturally, customization and other special needs will increase both these prices.
I am an unabashed fan of integrated online software tools, and encourage nonprofits to see their communications, fundraising, and advocacy working in harmony together, exchanging data when appropriate, and providing a complete view of constituent activity.
When choosing vendors, this might mean looking for one vendor that offers a suite of integrated tools. If a nonprofit is just starting out online, they might instead find a vendor that offers one tool, but that can add-on other integrated tools as the nonprofit’s needs expand through email list growth and experience.
The coming year will see additional changes among the software options we’ve discussed in this article. Some of the single point vendors will offer integration features. Several mid-tier vendors will increase their offerings to attract clients. And Open Source tools will continue to grow as a viable emerging model.
What does all this mean in the real world of nonprofits trying to fulfill their mission and accomplish their organizational goals? Nonprofit staff are eager to learn the best practices in online communication and engagement and make the most of their lean budgets and staff. They are excited to find technology partners that understand where they’re coming from, want to grow with them, and see them more as technology partners than just a revenue stream.
The true potential of integrated online software will be revealed in real-world campaigns that are conducted by nonprofits, and that demonstrate tangible results such as money raised, volunteers recruited, advocacy messages sent, and other programmatic campaign goals.
The promise of affordable integrated software tools is to provide an on-ramp so that more nonprofits--particularly small and mid-size--can use the Internet to enhance their existing programs, engage stakeholders, and achieve their organizational mission.
Michael Stein is a nationally renowned technology writer and Internet strategist who empowers nonprofits in communications, fundraising and advocacy. He is the author of three books and numerous articles about nonprofits and technology, including the 1997 groundbreaking book “Fundraising on the Internet: Recruiting and Renewing Donors Online” (with Mal Warwick and Nick Allen). Since then he has written about the evolution of Web-based nonprofit technology service providers, and uses of mobile phones in civil society. Michael has provided strategic support to numerous organizations on Internet strategy covering tactics related to marketing, fundraising and advocacy, with a specific focus on email newsletters, Website content, blogs, and Internet vendor selection.. He is a Board Member of the Golden Gate Chapter of the Association of Fundraising Professionals and Idealware. Read his blog at www.michaelstein.net [2].
Jeff Heron, John Kenyon, Robert Weiner, and Laura Quinn also contributed to this article.
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