5 Ways Your Current CRM May be Costing You Too Much Money

When it comes to nonprofits, every penny counts. From office space to equipment, nonprofits need to get the highest quality at the most reasonable price so that they can devote the largest possible percentage of their donors’ generous support to accomplishing their mission – and choosing a nonprofit CRM is no exception.

Now, when we say “Your nonprofit CRM is costing you too much money,” we don’t simply mean the subscription fees are too high, or that there are costs hidden in the fine print of your contract. What we mean is, there are unseen organizational costs inherent in most donor software systems that can take up a big chunk of your overall budget.

The truth is, the lack of features, complicated processes, and potentially bad data integrity provided by your nonprofit CRM software may be costing you thousands of dollars each month — and without you even realizing it. There are a variety of ways these costs accumulate, but in our experience with nonprofits over the past decade or more, we’ve found that they can be lumped into two main categories:

1. Gross inefficiencies that waste your team’s time and effort, which could be invested elsewhere
   
2. Actual money coming out of your pocket every month that should be directed toward your mission

Ways Your Non-Profit CRM May be Wasting Your Money

With those introductory thoughts in mind, here are five possible ways your non-profit CRM may be eating up a large percentage of your overall budget…

1. Your CRM May be Creating Bad Data

In helping organizations migrate their data to Virtuous, we continually find an excessive number of duplicate donor records created by their CRM. Sometimes, it’s hard to spot: a husband and a wife may each have their own record; a supporter has moved, so there are separate accounts under both addresses; someone gets married and their last name and address changes.

Other times, it’s much more direct. W’ve seen multiple accounts for givers with data that is virtually an EXACT match: same name, same address, same email address. There have even been cases where a donor record was duplicated three or more times!

You may be asking, “What’s the harm in a few duplicates here and there? How does that cost me money?” Let’s look at a real-life example:

An organization that migrated to Virtuous a few years ago had over 900 duplicate records created in their former donor database. If they sent 14 appeal letters annually — one per month with two follow-ups for calendar fiscal year-end mixed in — and quarterly newsletters, those costs would add up very quickly. Broadly speaking, it was costing that organization $1 or more in order to get a piece of mail into the hands of one of their donors. You may think that $1 is so small of a number, it doesn’t really make that much of a difference. But when you add it all up, you get something like this:

$1 x 18 mailers x 900 = $16,200/year.

You read that right: sixteen thousand! And the cost is likely even higher than that, particularly when you factor in certain variables like the latest paper and postage fees.

In addition, beyond the hard cost of sending too much mail on an annual basis, there are dozens of soft costs directly related to duplicate donor records.

• Donors receiving duplicate mailings or phone calls may perceive the organization as inefficient or wasteful. They may think twice before making a new donation.
  
• Important notes or tasks associated with donors are attached to the wrong account and organizational knowledge is lost.
  
• Duplicate contacts wreak havoc on marketing stats and reporting. It’s impossible to produce accurate “new giver” reports when data is duplicated or incorrect. This would affect revenue projections, ROI calculations on marketing initiatives, and can dramatically alter the annual budgeting process.
  
• When data sometimes gets split between multiple accounts, you can’t get a full picture of who your supporters are and what their overall contribution to the organization is. You may even harm the relationship by not honoring their communication preferences because that information is only being tracked on only one of their donor records.
  
• It takes time for your data management team to consolidate records because it tends to be a very manual and protracted process – not to mention that every hour spent consolidating records is an hour NOT spent doing something that will help accomplish your oganization’s mission.

2. Your CRM May be Inefficient at Standard Back-Office Tasks

Short, repetitive tasks can quickly take over your team’s time as weeks, months, and years add up. The most common task completed on a daily basis for nonprofits is the gift entry and receipting. This is important because the generous supporters who make up your database are the lifeblood of your organization. They not only keep the doors open and the lights on, but also allow you to accomplish your mission. Therefore, quickly and accurately tracking gifts is the critical task that needs to happen on a daily basis. Unfortunately, many nonprofit CRMs make this either far too difficult or far too easy. Here’s what we mean…

On the “far too easy” end of the scale, the software says, “Hey look, a gift! Do I know who this gift should be attributed to? Nope! OK, let’s create a donor record.” That’s one of the most common ways nonprofits end up with duplicate donors records – and as should be clear by now, that’s a bad way to operate.

On the other end of the spectrum, some donor management systems make you jump through a dozen hoops and make it a painfully long process to enter gifts in bulk. The data is accurate and clean(ish), but the gift entry process is long and arduous. When this happens, your team’s time is wasted, costs increase, and your team can spend less time furthering your mission.

3. Your CRM May Not Play Well with Others

Most nonprofit CRMs fall into a trap common to software systems in the 1990’s and 2000’s (even ones in recent years!). They work hard to hold your data hostage by not allowing it to easily integrate with other common systems. Instead of integrating, they try to be a one-stop solution for all of your organization’s needs.

Some CRMs are happy to offer you an API (Application Programming Interface) for an annual fee. But once you fork over the cash, your technology team may find that the API requires coding acrobatics to integrate with the most basic third party systems.

Even more concerning are solutions that try to be “all things to all people.” Some CRMs claim to be great content management systems for your website, credit card processors, accounting software for your finance team, and email marketing platforms. On the outside, that sounds GREAT. Why wouldn’t you want to get everything you need in one place? But the reality is, by trying to be “all these things to all people,” many popular donor management solutions end up struggling to do any one thing really well.

4. Your CRM May be Too Complicated

Here’s a helpful exercise. Take a moment and ask yourself, “When was the last time our CEO logged into our CRM?”

That’s not meant to be a joke. But unless your organization has five or fewer full-time employees, the answer is either “never” or “a lot in the first week, but now… not so much.” Why is that?

More than likely, your executive team needs to access the information sitting in your nonprofit CRM, but the system is either too complicated or requires too much training. As an alternative, they’ve quickly learned to rely on other team members for reports, insights and information stored in your CRM.

Unfortunately, this problem isn’t unique to your executive team either. Many nonprofits have team members who don’t use their donor software. Often the tools are just too difficult to use unless you have a degree in data administration, or unless you’ve gone through a certification process offered by the software provider.

Think about that for a second. Some CRMs are so difficult to use, the companies that built them have to offer weeks-long certification courses to train smart, capable, passionate people how to use their software correctly. When you combine that with the typical employee attrition rate at nonprofits, as well aa the cost/time to retrain new users, you have a serious problem on your hands.

Too often, organizations have one or two people in IT or accounting they rely on for anything that extends beyond the most basic tasks in their nonprofit CRM. Need a report of gifts to a specific project since the beginning of the year? Get it on the never-ending IT to-do list and hopefully you’ll get something back by the end of the month. Need to run segmentation for an unexpected marketing opportunity that popped up? Hopefully the one operations person trained on the software is willing to drop what they’re working on to get it back to you today. Need to know what the response rate and ROI on direct mail initiatives was for that May appeal letter to major donors? You can see where this is going…

5. Your CRM May be Keeping People Out

In addition to limiting team member access because of poor usability, some donor management software solutions literally limit how many team members are granted access to the system. As a result, many organizations are reluctant or unable to empower their entire team. The result is often back-office slow-downs and a lack of data funneling up to major donor representatives or the executive staff. Understandably, that can cause severe limitations for your organization’s success plan.

Why Virtuous May be the Right Alternative to Your Current CRM

Virtuous is the CRM solution that simplifies donor management to help nonprofits build deeper relationships with their supporters, raise more money, and do more good. From generating clean data to creating fast-acting and personalized automation tools to acquire and sustain long-lasting donors, Virtuous may just be the option you never knew you needed – until now.

Over here at Virtuous, we’ve been in your shoes before. We know what it’s like to be handcuffed to antiquated and ineffective software solutions. Our founding team spent decades working in the nonprofit space because we’re passionate about empowering charities and reduce their costs. That’s how Virtuous got started. We wanted to find a better way for nonprofits to accomplish their goals. To put it simply, Virtuous was made by fundraisers for fundraisers. So ask yourself this, “Is Virtuous the right fit for you?”

Schedule a demo with Virtuous today and discover how Virtuous could just be the next best thing for your nonprofit.

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