Data Intergration

Most nonprofits, when the amount of time and money they spend is accounted for, dedicate most of their resources to relationship building, communicating with their constituencies to build communities of interest. Yet 20 years after the advent of the personal computer, and several years after the internet boom, most nonprofits have not introduced technology effectively to help them build a community of constituents.

A major result is that nonprofits are less effective at their number one job, building quality relationships. They cannot communicate with their supporters in ways that other organizations do. Nonprofit constituents, who are also customers and citizens, now expect interactive and personalized content to keep them engaged. Unless nonprofits adapt technology to meet their needs, they risk losing their voice as their constituents pay attention to more effective communications strategies in the never-ending and ever-escalating battle for human attention.

Having said that, the more technology is incorporated by a nonprofit organization, the less likely the organization is effective at developing quality relationships with its constituencies.

This may sound like an argument against technology, and certainly there are a number of nonprofits that firmly believe technology gets in the way of relationship building. Smaller organizations often do not need sophisticated technology, but they will as they grow and their relationship building needs to scale accordingly. What is needed is an approach that puts technology in service of a nonprofit's mission, technology to create community.

Data Disintegration

Consider the technological capacity of a typical medium-sized nonprofit:

• The nonprofit has a moderately powered computer for most of its staff.
• Their computers are connected to each other by a local area network (LAN), and the LAN is connected to a broadband (usually DSL) Internet connection.
• Staff have email accounts at their desktop, and access to websites with a browser.
• The organization sends occasional bulk emailings to its supporters, using an email client such as Microsoft Outlook.
• The organization has a contact database, but few records have an email address recorded.
• The organization has a website, it has an impressive number of visitors (compared to who walks in the door or calls on the phone) and the organization collects web statistics.
• The organization can accept contributions through links from website to a donation portal (such as eGrants.org), but it does not have the ability to directly capture contact information of its visitors (such as an email address) nor sign up visitors interested in participating in the nonprofit's programs.
• The organization has a fundraising database, usually created by a consultant or by a volunteer associated with the organization. It records contacts and payments and produces mailing labels and letters.
• The organization conducts various programs, and program staff have adequate access to technology. They create their own spreadsheets to track information on program delivery and store them on their own computers.

Notice that all of the technologies are related to communications -- relationship building -- and that they all fundamentally rely on a database to track information about interactions with constituents:

• There is a database in the email client, the address book, one for each staff. It contains at least an email address, but may also contain a street address.
• There is a database at the website, that tracks at least page views. There may be an additional database that records email addresses and interests of web visitors.
• There is a database that tracks donations and each donor's contact information.
• There are probably many databases that track program-related information.

Also notice that all of this data is stored in separate databases. These databases are unrelated, meaning that if the email address changes in one, it is not changed in any of the others, unless someone does it manually. Data entry is still the single biggest expense in any database, and often data is not manually entered more than once, if at all.

It also means that an organization cannot securely share information about a specific individual. Sometimes this reinforces internal requirements of the organization, such as when program staff cannot have access to major donor information. But most times this separation of data means lost opportunities: it's clear that donors are more likely to be activists on behalf of the organization than non-donors. The people represented in the database know this best: they receive mixed messages from the organization because the people sending the messages do not have a holistic view of who the person receiving it is, and their relationship to the whole organization.

Customer Relationship Management Software

Thus, as more technology is incorporated into the organization, the effect is data disintegration. Now that basic technology infrastructure needs are being addressed for many more organizations by market mechanisms, data disintegration may now be the single largest information technology problem in the nonprofit sector. Business recognized data disintegration as a problem long ago, and customer relationship management (CRM) software was created to integrate sales and marketing with customer service data within an organization. CRM, when implemented well, becomes the central nervous system of an effective organization. Solutions range from Goldmine for small businesses to very customized and complex Oracle databases for large corporations.

The nonprofit sector has access to a few applications that could be called CRM. There are about 25 companies that publish commercial quality fundraising software (our corollary to sales and marketing), but most of them are quite small and the software is expensive and limited to fundraising functions (no other programs - the customer service departments - can use the software). The largest company, by a factor of at least two, has about 13,000 customers and their software starts at several thousand dollars (and costs much more to approach true data integration). The players in this market have not change appreciably in the past five years.

Recently, there are a number of application service providers (ASPs), companies that host databases that nonprofits access over the internet with a browser, that have entered the CRM market. Most ASPs focus on one aspect of a nonprofit, whether it is donor/membership relations, volunteer management or engaging activists online. Nonprofits that use more than one ASP are faced with more data disintegration because there are no widely adopted standards for the exchange of data between ASPs (it is not in an ASPs interest for you to be able to share your data with other ASPs --- you might switch providers!). For the integrated CRM functions that are necessary in a growing organization (and provided by only a handful of ASPs) the start up costs and monthly subscription fees are high and add up fast.

Both traditional software publishers and ASPs are targeting their products for the high end of the market. It's a rational business decision: that's where the money is. However, the vast majority of small- and mid-size nonprofits, who often are in the best position to do quality relationship building, integrating online and on land strategies, have not had access to tools that can help them. Our estimate is that at least 95% of all nonprofits are not using commercial quality software to manage relationship building with their constituencies. The initial high hurdle of software cost is the major reason nonprofits do not have access to database solutions that are so critical to achieving their mission.