In this episode of Tech in the Arts podcast, nonprofit technology consultant Karen Graham shares insights from her research with AMT Lab’s Executive Director and Publisher, Dr. Brett Ashley Crawford, on how organizations choose, evaluate, and manage donor software systems.
Karen Graham is a nonprofit technology strategist with over 20 years of experience in nonprofit leadership, consulting, and capacity building. She specializes in CRM and donor management systems, guiding organizations through every stage of software selection and optimization to better achieve their missions. With leadership experience at Tech Impact, Idealware, and MAP for Nonprofits, Karen helps nonprofits use technology to work more effectively, foster innovation, and better achieve their goals.
Show Notes:
Dr. Brett Crawford
Welcome to a Tech in the Arts podcast of the Arts Management and Technology Lab at Carnegie Mellon University. Here, we connect you to the innovation happening in the field. I am Brett Ashley Crawford, the executive director and publisher here at AMT Lab and I am speaking with my friend and tech co-conspirator, Karen Graham. Karen is a speaker, trainer, writer, and consultant with expertise in technology leadership and innovation, nonprofit software, and digital strategy. Her consulting work includes strategic technology roadmaps, development of knowledge resources, and leadership coaching. Graham's past roles include executive director of the national nonprofit, Idealware, as well as leadership roles in capacity building, arts, human service organizations and a software startup. She holds a Master of Business Administration in Nonprofit Management from the University of St. Thomas. For more information about Karen, visit KarenGrahamConsulting.com. Today, we're really focusing on a report that she collaborated on, that focuses on donor management software. What people are satisfied with in their software systems and what they want in their software. This is not the first time that this report has been done so it has some really interesting data in it. We're going to uncover what you need to know about donor management should you be thinking about upgrading your software.
Dr. Brett Crawford
Welcome to the arts management and technology labs podcast. It is so great to have you here. I'm going to start with an overarching question about the study which I think is really about the value of the study and what brought you into the study. So if you can, talk just a little bit of the background of the study and you participating in it this year. Just give us a little bit of the background before we get into those deep questions.
Karen Graham
Well, there are actually two parts to this study. There's the public report that I do that's based on a survey of 379 nonprofit organizations about their use of donor management systems and what goes into their purchase decisions, what they like and dislike about their systems, what they consider to be important features, that sort of thing and we ask a few other contextual questions too. So, I think it's really important for purchasers of that kind of software to understand what their peers are thinking about and to be able to use the study, for example, to look at a list of features and think about, okay, I'm probably going to purchase donor management software, or make a decision maybe to retain my current system in the next year.
Now I have this list of features, and I can see that other people think that these features are really important, or these features are less important that helps people reflect on their own decisions. And I hope that this will lead to people making better, more confident decisions for their own organization.
There's also another side of this study which isn't quite as obvious to people that read the public report, which is some market data that I provide to the providers of those software. They purchase that from me, and they're receiving quite a bit more detail that compares them to their competitors. And that helps them to be more competitive in the market, but it also really helps them to improve their products. I've had a lot of conversations with them about how to use this data to guide their product development roadmap.
Dr. Brett Crawford
I'm sorry if I interrupted a bit. I was going to say that makes a lot of sense because I think that these types of studies help both sides, right? The vendors really never have that chance to pull that kind of data from the clients at a bigger perspective and to be honest, get data from people who are not in their vending system. Like what does the overall market want? Not just how am I serving my individual clients? So, I'm sure that this is really a wonderful value on both sides. That's great.
Karen Graham
They seem to think so.
Dr. Brett Crawford
So, you mentioned this and I'm going to point out the study notes that people are considering changing their software every three to four years. That makes sense, right? You have those moments, I would say three to five years in most organizations, where you make sure your technology stack is meeting your needs. Yet fewer companies are actually making that choice. I mean, the study really showed that they think about it, but then nope, we're just sticking with what we got is what's happening. Can you share what you think is influencing this “stick with it” mentality? And you know, even if there's only moderate satisfaction, they are still sticking with it. Why do you think that is?
Karen Graham
Yeah, I can share what people said are their reasons for sticking with products or for changing. I can also share what I think is going on, which might be slightly different, which is that products have gotten better. I think products have gotten vastly better over the last 20 years as online web-based fundraising and donor management products have matured and improved and they've listened to their customers and added features that work for them.
They've adopted more modern technologies. Like many of them are starting to look at AI technologies now, for example. So, the products are getting better and overall satisfaction was actually quite high too. I would say. I mean, in my judgment, almost every single product that we've got responses for had strong satisfaction from their customers. This isn't a market where people hate the products, but even when there are certain aspects of it, certain facets of the product or the vendor relationship that they're not happy with, there are some things that people report that they consider as barriers to making a new purchase or to changing from one product to another. One of the top ones is the staff capacity. We asked about capacity for evaluating choices and capacity for implementing a new software system separately, and those were the top two things that people chose when we gave them a list of factors that might have influenced their decision to stay with their current software and that matches my personal experience. I'm curious to know how that lines up with your experience working with nonprofits. But for me, I have worked with a number of organizations that just feel like they have so much to manage. They are maybe a bit out of their depth in making a software purchase decision because it's not something they do on a daily basis.
It's something they do every few years at the most. And, it just can feel really difficult to make time and space for that. So, it's not even necessarily about the cost or the disruption, although those are also factors that people cited, but it's just the, the staff time and expertise that's needed to really do this well.
Dr. Brett Crawford
Yeah, I think it's the staff time and expertise, not only to choose the software, but also to then implement the transition. When I was still working in the industry and we did a transition, we hired additional staff, meaning we were covering somebody who was already on staff that we moved 50 percent of their time on to transition planning and then transition implementation. Because it's not like it's a magic bullet and you flip a switch. And I think that you have to recognize that the opportunity cost of improving a system is a transition that is not going to necessarily be quick. And then you have additional training for the new system, et cetera.
So, I wasn't surprised by that, but I thought it was interesting that maybe even 10 years ago, people were hopping more because they were looking for that additional capability. And I think there was more differentiation between the systems that were out there. A lot of the systems that we look at in the arts, included ticketing package, right. And I think a lot of your organizations leaned on the education, which they have classes to sell.
But ticketing packages for performing arts are a narrower bucket or of potential systems because assigned seats is this whole other data set that you have to pay to get customized that you know, it offers a different problem to solve. And I would say that it's usually when you're looking in those areas for what can I do to improve my relationships, it's finding one that is a whole picture, right? Something that I don't have to take it, take multiple systems and plug them in that I can find a one solution place.
Karen Graham
Yeah.
Dr. Brett Crawford
So, yeah, it's interesting. The good news was that the systems have improved so much, which I think is probably going to sustain itself, especially as AI is entering the marketplace, because I think that artificial intelligence will be able to lift all of those organizations at the same time. So, still the differentiation won't be quite as much.
Karen Graham
I hope that's true. Yeah. I am a little bit wary with some of the merger and acquisition activity and some of the VC investment, outside investment that's going on in the software market right now, that it's possible that some of these companies are going to become less focused on what their customers really need, more focused on quick profits and that makes me a little uneasy. So, I wouldn't be shocked if I saw satisfaction go down in the next study because of that but I hope that that does not come true.
Dr. Brett Crawford
I'm not going to have you do a market analysis of all the various merger and acquisitions, but I will say, in my previous world, we were working with Blackbaud and they often would purchase and integrate product into their systems. And I think that as any company, as you're getting used to a new system, it would have a bump and then it would improve.
Karen Graham
Mm hmm.
Dr. Brett Crawford
So, I think what you were saying, that I'm seeing in even outside of the donor software area, is the private equity entering the space where people who are really investing or buying, purchasing an entire company that they know nothing about the point of the company. They just see it as a place that's going to maybe get them a short-term gain at the expense of. So, I think those are the moments where you. as a recipient of that particular vendor solution may find people who are thinking they'll make some changes in the next few years.
Karen Graham
Quite possible. We'll see what happens.
Dr. Brett Crawford
Absolutely. We lightly mentioned mergers and acquisitions, and some artificial intelligence. There's a marketplace that's going to be changing a lot. So, I noticed that artificial intelligence is the last thing of importance in that system list.
Karen Graham
Yes, when you sort all of the different facets of a system, the features and vendor aspects and vendor characteristics, things like that, when you sort them in order by, from satisfaction, highest to lowest, AI comes out as, or no, is it satisfaction or importance?
Dr. Brett Crawford
I think it was
Karen Graham
Importance, yes.
Dr. Brett Crawford
And I think probably either way it would have been in the same place.
Karen Graham
Yeah.
Dr. Brett Crawford
Because I think it's so early into the market, but I think that those of us who are working deeply in tech see the potential for artificial intelligence, and to be honest, some things that are already baked into systems in terms of machine learning, right?
We're already using artificial intelligence as machine learning when we use projections for our fundraising plans, right? Things like that. But I guess my question is in the donor management systems in the software area, what are you seeing as opportunities and potential trends when it comes to more the generative AI, integrating a broader AI package, maybe a combination of machine learning and generative into some of these solutions or operations?
Karen Graham
What's already clearly arrived is AI to help with writing. So, if you want to write a fundraising email, there are lots of systems that have now incorporated AI into that, or you can do it externally and paste things in. So that feels like it's kind of already 2023 news. But…so like that kind of generative AI stuff is not as exciting to me as some of the power of AI and machine learning for predictive analytics, for really analyzing the data and helping organizations spot the hidden gems in their donor list or their prospect list.
I don't think that we're at the point with artificial intelligences where they can be as good as a human on their own in identifying those prospects and prescribing what you should do to move forward with those relationships to deepen them, to pursue those kinds of gifts. But that data combined with somebody who really knows the donor base, who knows the mission, that can be pretty powerful. So that's interesting to me. The other thing that I've seen, just so far, just two companies experiment with, and one of them is Salesforce, not surprisingly, but the other one is a tiny company that is doing a lot of stuff with queries that are based on natural language.
So, you can ask the database, I'd like to see everyone who donated, uh, last year but not this year, in this zip code, who is interested in cats, whatever, and it'll give you that list without having to build a complex query. You can actually talk to it. Like you can click the little microphone button, and you can talk to it and tell it what you want and then there are different ways to manipulate the data, also using natural language to create different kinds of reports, visuals, grouping, sorting, all that kind of thing.
I think this has potential to make these systems so much accessible to non-technical users that it's really going to be a game changer.
Dr. Brett Crawford
And I think it'll also speed it up.
I mean, I think a lot of the time that we take is thinking about, well, how am I writing that? I used to do this in marketing. How can I pull the right list to get this segment, right? And so, you have to think about the variables. You realize you pull the wrong list, you go back and you tweak that variable. So, I think working with a strong natural language, generative AI partner can do exactly that. I think it will potentially transform the management era in that sense, in that you need the skill, you need the critical thinking skill to understand how the data, what the important elements of the data are, where I put the data is. But I think it's also important to recognize that you don't have to necessarily be able to write the formula in the right way.
Karen Graham
Yes, exactly. And it actually puts even more of a burden or responsibility on people to really understand how their data are structured and what the logic is behind some of those queries. But it doesn't require them to just click through 15 different filters. So, it is a huge time saver and it can be more iterative.
You can get a set of results and say, oh, actually I want to exclude this group. And then it just does that, instead of having to rebuild the whole query.
Dr. Brett Crawford
Mm hmm. I think it will change not only the individual who is doing the typical queries right now, like how they can get into more nuanced data, but I also think it will empower people who used to be scared. I mean, to be honest, sometimes executives don't want to put their hand into all the little details because they were never trained to deal with it. And they'll be able to ask questions, sort of a perspective on a donor or a particular segment that they can access without having to go to another staff member. So.
Karen Graham
Yeah. I also think there's opportunity for these systems to be a little bit better at suggesting things to the user. Like you might want to look at these lapsed donors, or you might want to look at these people who made their first gift and you haven't heard from them in the last two months. That sort of thing. The ways that systems can sort of prompt a user to discover opportunities that they didn't think to look for.
Dr. Brett Crawford
Yea and help prompt the users to quit doing the things they've always done just because they've always done them. I think of some of the places where I usually have communications, and I have recognized some of the bigger multinational nonprofits. Their communication patterns have changed, and I am 90 percent sure it's probably because somewhere in there they have started incorporating a more robust data analysis for segmentation. So, which is good!
Karen Graham
I do wish sometimes my computer would talk to me and say, Karen, why are you writing this long email? You could just call this person or things like that.
Dr. Brett Crawford
Absolutely. It's the, how can we start getting the generative AI that we need it to do, right. Yes. “Remember you already emailed them three times. Stop. Pick up the phone”.
Karen Graham:
Mm hmm.
Dr. Brett Crawford
It's very good. Or can it take my email and make it to do list for me without me having to like shuffle through it all?
Karen Graham
I mean, the answer is probably yes. I just don't know how good it would be at this point, but it's getting better and better.
Dr. Brett Crawford
It is getting better and better. So, I think one of the other pieces that I noted in the report that I find very important, and I teach in my classes, is taking a pause and making a plan. Not doing reactive behaviors and activities but really thinking, okay, what are my goals and how am I going to reach them? And you found that having a formal donor engagement plan had a direct impact on fundraising success. And I was hoping you could maybe unpack that a little bit more for our listeners, perhaps adding what you feel to be important components to such a plan, because I think particularly those mid-sized organizations where they really need it often aren't sure what they should focus on or just don't have that habit baked in yet.
Karen Graham
Yeah. So that was actually from a previous study that was conducted by my partner on this study. He's a little bit of a silent partner on the public part of this, but his name is Tom Lehman. He's a retired industry analyst who looked at the donor management software market and a couple of other kind of adjacent software markets during his career.
And so, he conducted a similar study a few years back and asked that question about formal fundraising and engagement plans. He didn't really ask any details about, like, what did those plans consisted of? It was just, did you have a plan or not? And found a really strong correlation between the presence of a plan and fundraising success in terms of dollars raised and specifically increased from, from one period to the next.
So, I mean, I can only speculate what those plans might've consisted of, but what I can say is that based on my own experience and learning, some of the things that are part of a good donor engagement plan and fundraising plan in general that relate specifically to the software use are really looking at your data to figure out, like, where do your segment sort of naturally fall? Where are your donors naturally clustering based on? Interest based on giving patterns. And it might not just be the amount of their giving, but it might be the frequency of their giving. You might have like once-a-year givers versus people who are a lot more frequent or more erratic where they only give when a certain thing triggers that.
So really looking at your data to kind of understand giving patterns can be helpful and also to understand like what really connects these people to the organization and then using the tools you have to be able to personalize communication to them. This is not a new concept. I mean, this is kind of like targeted marketing concepts have been around for, I don't know, a hundred years more than that.
But that's kind of the bread and butter of a, of a fundraising plan, I think. Not just making guesses, but using your intuition, your intuition to ask the right questions and then using your data to find the answer and really guide who your segments are, help you predict what you might be able to raise based on past patterns and using that to predict that sort of thing.
Dr. Brett Crawford
Thank you for that. Yeah. And I think my, what I was noting was I think the terminology around that formal engagement plan seemed interesting approach because I think this time you studied it through maturity
level. My follow up is how do you see the relationship between maturity level and having an engagement plan and how you are defining those things?
Karen Graham
Well, so one of the things we use to define higher levels of, of fundraising maturity was that the organization did have a formal plan. And it was the maturity model that, that we devised because we were actually unable to identify one that was kind of widely accepted in the field. And, was roughly based on the capability maturity model, which was developed, I want to say through MIT, but I could be wrong about that.
So maybe don't quote me on that. But it's kind of a widely used model that just looks at different phases that organizations tend to go through from a pretty chaotic ad hoc approach to things to having systems and best practices, and just being a lot more form al and smooth about the way things are done, I would say.
So we applied that to fundraising and one of the things that characterized higher levels of maturity was that they did have a formal plan.
Dr. Brett Crawford
I mean, it does make sense. I just find the, the maturity language was a different way of putting it that could let things leak out. You know, I think the concrete, it was a yes or no question. Do you have a plan? Do you not have a plan? Versus where are we putting you in terms of reactive to intentional work.
Karen Graham
Yeah. And when we surveyed organizations, we did provide quite a bit of detail, sort of a rubric for them to choose their maturity level. So, it wasn't just a couple of words, they got a full description of each level that would help them place themselves there.
Dr. Brett Crawford
When you were pulling your data, request for data, did you target directors of development or were you focusing more on management level, like, where were you really hoping the level of experience in fundraising was going to be answering these questions?
Karen Graham
I would say we targeted directors of development and other people because it's not the same in every organization depending on the size and the way they're organized, but people who make decisions about donor management software purchases. Often that's a development director, but in a tiny organization that might be the executive director. In some organizations, an IT person might be involved in those decisions as well. And so, we allowed people to respond to the survey if they were a decision maker of any kind. We screened out people who were consultants or who worked for software vendors or, who just didn't really, there were a handful of organizations that said they don't use, or they don't do any sort of fundraising from individual donors. Maybe their organizations are funded strictly through grants, that sort of thing. And so, in that case, we said, thanks for starting the survey, we're going to kick you to the end.
Dr. Brett Crawford
Totally understand. And I will say, I'm looking at the report right now. You had a nice diversity of size in your data set. You know, it really was, if you're looking at the visualization, it was pretty evenly broken down.
Karen Graham
That was pretty deliberate. We were able to get a data set of organizations that we could email. And that's a little tricky, honestly, just side note, being able to email people to participate in research is sort of exempt from the anti-spam laws, but it's still pretty dangerous territory.
So, we had to be very careful about how we contacted people about this, but we were able to use that data set to find a really large variety of organization sizes. We also worked with a number of partners, including N10 and we're able to get them to help us promote the survey to their lists as well, which are very broad. TechSoup was another promotion partner on that.
Dr. Brett Crawford
Yeah. All of which will have nice long arms that will hopefully reach the audience. So if you're running into people in the street and you've never met them before and they say, what do you do? And you sort of explain your work as a consultant. How do you promote their use of this report? How could you instruct someone to use the report if they are interested in learning more?
Karen Graham
If they are one of those folks who makes decisions about donor management software. I think I might suggest, and I'm just scrolling through the report on my screen right now, to see like what would be the one page that I would want them to look at. I think it would not be, The page about the most frequently used product. I do have a list of kind of laying out the market leaders by budget size of their clients of the organizations using those products, but I think it's a little dangerous to just use that as like, Oh, well, my organization's in the one to 5 million range. So, these three products are probably the ones I should look at.
Well, I mean, maybe. Maybe those should be on your list, but they shouldn't be the only ones. Because if you're a theater who has ticketing requirements and seat assignment requirements, you might not find that capability with any of the three products that are listed in that category. Or there might be some other things that are really special about your organization that, um, would require you to look at more of a niche product that is purpose built for that kind of scenario.
So, that's probably not the page. I would point people to, I might suggest that if they were only going to look at one page, they might look at the satisfaction by feature page. Not so much. To say, like, “well, basic reporting capabilities have really high satisfaction in general. So I shouldn't ask any questions about that when I'm considering vendors”. Because there is some variability from one product to the next, which isn't really captured in this aggregate chart, but it may give them some ideas of what sort of questions they should really focus on. If we know that let's say you're an organization that has chapters. Chapter and affiliate support in general as getting a five out of 10 rating on a 10-point scale across all products. Well, that might be something you really want to dig into and make sure that the products you're considering have good support for that if it's something that's important for you. If it's not something that's important for you, then you can kind of just disregard that. Like, who cares if other people are dissatisfied with that? You don't even need it, right?
Dr. Brett Crawford
No, I totally get it. I would also point out to them that they need to, or ask them what they expect from their software, right? I think one of the pieces that was a visualization you had was how they perceived it impacting their fundraising success. That was really interesting because at the end of the day the middle ground, like if you really just said, okay, either it helped or didn't help, and what's above and what's below, there wasn't as much of a differentiation as you would think there would be which I’m sure it’s psychological.
Karen Graham
Yeah. There was about a third of people said that their donor management system neither helped nor hindered their fundraising. So, it's kind of neutral. And then there was another third that said it somewhat helped, but there really weren't a lot of extremes.
Dr. Brett Crawford
No, it, it was just like, yeah, it sort of helps me.
Karen Graham
Yeah, and I imagine some of these companies that provide that sort of software are really wishing that a lot more people would have said, yes, it was really enormously helpful.
Dr. Brett Crawford
Which probably relates to training. I mean, when I've worked with other companies on other projects, I've been surprised that they might say, I really wish my software could do X and I'll look at their software and go, well, it actually can. You know, you just aren't necessarily like tapping into that or your staff that hasn't ever been trained on it. Right. And so, I think the question of what are you trained to do and what are you expecting from the system implies also whether you're getting out of your system.
Karen Graham
Absolutely. I actually wrote an article or a blog post about that for N10, in conjunction with this report, with some suggestions for how to get more out of the system that you already have, or the system you're about to purchase. It would apply equally well to that. But some of the suggestions that I have there for maximizing return on investment are take the training that's provided by the vendor and just click around on things. I find a lot of people are afraid to see what happens if I click this button and there's really no need to be worried about that. It's pretty difficult to make a catastrophic mistake by just messing around and exploring menu options and finding out what things do. I find that's a really good way to learn.
And also, in a more structural level or like strategic level way of thinking about it. Making sure that the organization has enough resources allocated to really use the software well. Sufficient fundraising staff and also staff that have the right kind of technical training and not necessarily even talking about usage of the software, but technical training in terms of data literacy and data visualization and that sort of thing. That I think can make a huge impact on what people get out of their fundraising software and the people who are really good at that are the are probably the ones that are in that small portion of people who said, our fundraising software substantially helped our fundraising efforts.
Dr. Brett Crawford
I am in complete agreement with everything you've said. And I think that it's one of the things that I will be sure to include in our show notes, all the links to the article you report, the blog posts you put on N10. I think that training and investment are so important to even just feeling comfortable to click on those things you've never tried before. Those of us who were early adopters of technology, meaning like a long time ago in the world, I'm not afraid to go click on things because I figure the worst it's going to do is like freeze my browser and then I'll just restart my browser. I say that as someone who has actually crashed some serious websites before, but if they came back up, I just had to like unclick the thing I clicked.
Exactly. It's just, it's just a zero or a one. But I do appreciate this conversation because I think it really lifts up the importance of thinking about how you use these systems, how you're investing time and money and people to do this work. I appreciate all the time and research and thoughtfulness that you put into putting all this together with your teammates. It seems like you had some really good collaborators as well
Karen Graham
Yes, and Tom, foremost among, among them. He was a really great partner on this. I learned a lot from him. So yeah, it was, it was really a pleasure to do this. I've always loved research and, but what I love even more than discovering the information is synthesizing it and communicating it back to my peers in a way that can be useful to them and so I hope that I've accomplished that for some of the people who read this report and who listen to the podcast.
Dr. Brett Crawford
Same here. I'm, I am absolutely sure those who listen to the podcast will be very inspired and our show notes will be filled with many resources from the work that you've done. Thank you so much for joining us. This has been great. It's been great to reconnect as well.
Karen Graham
Yeah. Thanks for having me.