CRM could boost your charity performance as it has helped other charities to successfully save money and raise donations
Customer relationship management (CRM) software exploded onto the business scene about twenty years ago, and the market for CRM products is now worth tens of billions of pounds, according to Gartner.
It allows businesses to organise and manage all interactions and relationships with customers, and prospective customers, from one centralised platform.
When it comes to charities and non-profits, CRM means constituent, rather than customer, relationship management, where constituents include donors, prospective donors, members, volunteers, partners, vendors and so on.
CRM systems designed for charities offer specialised features such as donor and other constituent management, campaign management, donation management (including the ability to take payments), donation accounting, fundraising event management as well as providing analytics and reports.
These last two capabilities: providing analytics and reports are important for charities as they become increasingly data driven.
That’s because around 80% of all donations tend to be made by just 20% or so of donors but identifying and managing your relationship with that 20% can be hard, unless you have suitable software such as a CRM system.
CRM can also have an important role in your charity performance by helping you to hang on to your donors. The system provides donor (and other constituent) retention tools which help with membership drives, engagement in volunteer projects, or pledge management. And that is important because, according to the Harvard Business Review, a 5% reduction in your customer defection rate can increase profits by 25% - 95%.
Assuming something similar holds true in the non-profit sector, a relatively small reduction in donor defection will have a significant impact on your total fundraising.
It’s important to acknowledge that CRM systems do present some challenges to charities.
Implementing them involves changing to existing practices and usually requires some training. It can involve cultural changes, because a central relationship data repository means staff no longer "own" specific donors or store contact histories in their own spreadsheets or contact management software.
Instead, data is designed to be shared with other staff, and it is only when they are willing to do this that it can be fully exploited.
There’s also a cost in introducing any new software. That includes the software, but it may also include integration with other systems such as email and consultancy fees. However, many CRM systems are cloud-based. That means that charities don’t need to buy, run, and maintain the software themselves, instead paying a monthly per-user fee.
This also makes it easy for staff to use the system even if they work mainly from home, and for the charity to add or remove users, paying only for the people who need to use the CRM system.
So does all of this functionality make a difference to charity performance, despite possible organisational challenges and costs?
It appears that it does: charities using CRM software enjoy donor contribution growth of at least 20%, according to UKFundraising
Here a few specific examples of CRM helping charity performance:
So, although factors like the level of training required, acceptance of the new system by staff, and the degree of help provided by CRM consultancies undoubtedly affect the outcome, the answer to the question: "Can CRM systems really help improve charity performance?" seems to be: "Yes they can".