A number of innovations have emerged which are transforming the way nonprofits handle data and are opening new possibilities for the sector. Natalea Iskra investigates.

A number of innovations have emerged which are transforming the way nonprofits handle data and are opening new possibilities for the sector. Natalea Iskra investigates.

It’s no secret that the proficiency with which an organisation manages donor data has a direct impact on how much money they have to put towards their cause.

According to Paul Freeman, community relations and fundraising director for the Royal Institute for Deaf and Blind Children, there are three key reasons why having a sound and sophisticated database management system is absolutely vital.

“Firstly,” Freeman says, “you need to be able to communicate with donors on the most personalised level. Secondly, it’s important to ensure that no potential bequestors or major donors fall through the cracks. And thirdly, maintaining accuracy of records is paramount.”

“There is nothing more irritating to a donor than being addressed with a misspelled name,” Freeman continues, “and nothing more costly to a charity than sending out mail to wrong addresses.”

In recent years, in keeping with the global trend towards online, database vendors have developed and released a whole new breed of systems for the nonprofit arena.

These developments include hosted systems and software as a service models (SAAS) which are accessed via the internet, and sometimes referred to as ‘cloud’ computing.

But no matter which version (even the traditional software out-of-a-box resident on a local computer model) you look at, many are now allowing nonprofits to integrate data captured through digital channels with offline data, allow greater donor engagement, and push out fundraising campaigns through websites and other digital platforms.

Integrating online with offline

“Growth in online is the fastest growing form of giving and has been for a number of years now,” says John O’Donnell, managing director of Blackbaud.

“A few years ago nonprofits just placed a donation form in the website. However, we are seeing organisations recruit e-marketing people and understanding the value of channel integration such that direct mail is driving traffic to nonprofits’ websites, where landing pages have the same message and images as direct mail pieces.

“There are multiple forms of communication in addition to direct mail and email,” O’Donnell continues. “Sms, social media such as Twitter and Face book, combined with smart phones have people linking from messages through to websites, and a vast array of digital footprint can now be captured.

“So integrating online with offline tells us a great deal – did they open the email, did they click on the link, how long did they stay on the page etc.”

“Capturing this data against individual donors,” O’Donnell says “gives insights that can be subsequently segmented to grow relationships, and that eventually grows support, be it financial, volunteering or advocacy.”

Cloud Computing – Hosted and SAAS solutions

The emergence of IT services delivered via the internet is known as cloud computing, and there are two models that relate to donor databases.

‘Hosted’ systems are installed locally and hosted remotely, and according to Paul Ramsbottom, managing director of Advanced Solutions International, these are becoming increasingly common among nonprofits.

Then there is the software as a service model, or SAAS, where the database and its management is hosted offsite. Nonprofits using this system typically pay a monthly subscription fee for the service.

According to O’Donnell, “SaaS offerings are gathering great momentum broadly and are here to stay – the economic model for the buyer is very attractive, especially in the first few years, where the traditional model incurs upfront license fees.”

Mainstream systems for the nonprofit sector

While there are a number of database offerings designed specifically for the nonprofit sector, some organisations, such as Redkite, are opting for systems designed for the commercial sector.

“When we started looking for a vendor we looked at a number of options,” says Shelby Burns, brand and marketing manager for Redkite. Salesforce, a mainstream SaaS system, was chosen in the end.

Burns says this system was selected for a number of reasons including: its scalable architecture; scope for customisation; and its ability to be used throughout the organisation for purposes beyond fundraising.

“We use it to manage our financial assistance program, as well as for purchase orders with an automatic approval process,” Burns says.

Issues & risk factors

Jason Haigh, managing director of ESIT, believes that there are a number of issues associated with cloud computing database offerings, and that these need to be explored closely by nonprofits considering this option.

“What happens, for example, if something goes wrong with the provider?” Haigh poses. “Or if data is hacked, or exposed. The result would be disastrous.”

O’Donnell, on the other hand, says that issues around data exposure pose less of a threat when nonprofits choose to host remotely.

“Some organisations are sensitive to the location of data,” O’Donnell says, “but so long as the privacy and data security laws of that country are at least on a par with the organisation’s location it is a no greater risk situation.”

“Generally,” O’Donnell continues, “any vendor offering hosting services can invest more in security, disaster recovery and service levels around uptime than any single organisation. This is particularly attractive to the non-profit sector.”

But Haigh also warns that nonprofits should properly think through the decision to move their major computing applications to a remote destination.

“Organisations need to realise that the true benefits of cloud computing can only be achieved if all their applications can be moved to the cloud.

If they do not move everything to the cloud, they are paying for their local infrastructure and for their hosted environment. At present not all of the applications an organisation might need are hosted.”

Another of Haigh’s concerns is that many of the online systems do not have the power or flexibility in them that’s needed by large organisations.

“In addition,” he says, “if you do the sums you’ll often find the cloud system exceeds the cost of traditional systems within two to three years.”

The future of database management

According to Ramsbottom, the single biggest trend is that in five years there’ll be no data entry staff, as everything will be coming in electronically.

“This will free up fundraisers to spend more time analysing trends rather than keying in transactions,” he says.

Ramsbottom also believes that cloud computing solutions are opening up new platforms of communication with supporters.

“It will enable us to move beyond transactions into the engagement space,” he says. “We haven’t even touched on video communication, for example skyping to ask donors questions. It is providing a space for an immediate interaction and engagement.”

Haigh is not entirely convinced that the future of database management exists only in the clouds.

“We’re going to end up with both types of systems, that is, traditional database management systems and cloud computing services,” Haigh says.

“A number of large organisations will continue to do things as always,” Haigh continues. “Many will have in-house expertise and networks and hardware, they will have built highly complex and sophisticated systems, and they aren’t likely to be pushing systems out.”

Freeman believes that, in future, database management “will get more and more user friendly … we’ll see stronger interfaces with websites and social media such as Facebook, people will get to know and work their databases in a more sophisticated way and anyone that doesn’t will be left behind.”