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Working with Software Vendors: Helping Them Help You

Assess your organization's needs and survey the options before you pick up a phone to ask for a demo

Acquiring new fundraising software and upgrades can help nonprofit organizations toward greater productivity, and may make it possible to offer more responsive donor services without increasing staffing levels. But finding the right vendor match and the right mix of products can seem daunting.

Does your mission require the sophistication of integrated software designed to support professional fundraisers who manage annual campaigns, auctions, and a donor newsletter? Do you need customization at the level required by, for example, a charity that looks after or provides a refuge and allows individual adoptions? Or can you get by with the basics, contracting out for technology support services beyond off-the-shelf capabilities--word processing, email, and fax?

Who decides what a nonprofit needs? According to the Technology Works for Good website, of a Washington, DC-area nonprofit technical assistance networking and training organization, "The technology culture of nonprofits is most often shaped by an organization's leaders, namely upper-level management, board members, and funders. Frequently, those who shape the technology culture are not fully aware of the importance of technology to their organizations or may lack up-to-date knowledge." All the more reason for today's fundraising managers and development officers to become familiar with what's out there specifically for nonprofits, so they can help with technology proposals. The editors of Advancing Philanthropy have compiled an overview of the main types of software providers and service arrangements, advice for conducting a technology needs assessment, options for external support, and price ranges for every budget.

Scouting the Talent

Hundreds of products are available for purchase or lease or as shareware.

  • Many products are available as individual modules so an organization can add on capability as needed; for example, a membership management package might offer an optional special-event management module.
  • Specialized products come packaged with useful subcomponents built in; for example, event management software might contain modules to track guest registration and payment of fees and donations, print name badges, conduct mail merges, and provide post-event reporting and statistics.
  • Integrated fundraising software may contain separate components that let a nonprofit create donor profiles, perform trends analysis, support capital campaign management, process donations and pledges, and prepare personalized mailings.

Software packages exist for all aspects of fundraising and organizational management, including such tasks as direct marketing, membership management, event management, statistical analysis, telemarketing support, donor and alumni relations, volunteer management, accounting, subscription fulfillment, grant management, and fundraising project management.

The software providers most often used by fundraising organizations fall into the following five categories. This information, coupled with detailed knowledge of your organization's technology needs and a little independent research, will help steer you in the right direction.Software vendors market and sell a specific software package. While some vendors offer customization, training, and after-market support, you should plan to devote some of your own staff's time to ongoing programming and management of the software you buy. Many vendors design and sell software tailored to the specific needs of fundraising organizations; other organizations have bought and implemented the same systems, so ask for references before you buy. Before you meet with a vendor's sales representative, read AFP's "Twenty Questions to Ask a Software Vendor" Application service providers (ASPs) can be a good option for a nonprofit that cannot devote a portion of its staff dollars to full-time information technology support. ASPs support clients by housing databases outside the client's office; the databases are accessible via the World Wide Web and a standard browser. There are a number of advantages to this arrangement: No special software or new hardware has to be purchased to house the database, and access is 24-7 from any location with an Internet connection. ASP costs are subscription-based; some services are free for smaller organizations. Service contracts offer you the chance to purchase hardware and software support, and are useful for organizations without much in-house technological expertise. Standard contracts include monthly or annual fees that allow you to access online or telephone support, and some include a set number of onsite technical assistance visits per year. Some software vendors offer their own service contracts; others will simply refer you to local companies that provide such support.Outsourced support allows very small organizations or those lacking IT expertise to use technology without a major capital investment. This is also an option for organizations that choose to purchase and customize off-the-shelf software designed for general use, such as Access, Paradox, or Approach. Ideally, you should look for an external consultant who has experience in developing databases and working with nontechnical staff in fundraising organizations. As always, call references and visit other sites to get an idea of how well this outsider is able to work with the organization. Shareware (or the free version--Freeware) is another option for small organizations, although you will need to have someone on staff with a knack for technology. Shareware can be downloaded from the Internet and usually tested for some period of time before a modest payment is required to purchase a full-featured version. This gives your staff the opportunity to play with the software in your own environment before making any kind of financial commitment. Shareware is often designed by someone who likes to create programs and solve problems but lacks the ability to mass produce, market, and support software sales. Shareware programs range from utilities that transfer, translate, and store data to programs that help you design websites or online databases.

Assessing Technology Needs

Before you contact any vendors for a demonstration, you should be able to answer the following questions. The answers will help you decide what type of software you need to buy, how much training or support you need to include in the deal, how soon you need the new technology in place to meet your immediate goals, and how much money you will need to acquire and implement the new system:

  • Why do we need software? Will it be used to produce correspondence? Track donations? Identify prospects? Support events? Manage a capital campaign? All of these things?
  • Who will use the software, and what is their current level of technological expertise? What is the track record of the firms you are considering in meeting deadlines?
  • When do we need it, and what will happen if we don't have it in place by then? What is the trade record of the firms you are considering in meeting deadlines?
  • How much money can we spend, and would we be better off with an interim solution?

Taken together, the answers to those questions will tell you how much you will need to spend--which may not be the same as how much you have available to spend. At least you'll have a clear idea of the tradeoffs.

Technology planning is the most important phase of software acquisition, and the more time your organization spends in this phase, the better prepared you will be to work with vendors. "The trick to defining your needs is to describe what you want to do with technology, not what you think you need to buy." We found that good advice on TechSoup, a website that calls itself "the technology place for nonprofits." Here's the rationale offered for taking time to plan (see the website for details):

The technology-planning process will help you minimize technology-related crises, use staff time efficiently, and avoid wasting money on equipment that makes your life miserable. It will help you think through your priorities in order to use technology in a way that furthers your mission. It will help you budget for technology and make cost-effective purchases. Even more spectacularly, a technology plan can be instrumental in your quest for technology funding.

And be sure to plan beyond your immediate needs: Three years is the useful life of most software before you'll need to purchase significant updates. Carefully study the hardware requirements for each package; the best software overall for your needs may require more memory, more hard disc space, or a faster modem or Internet connection to get it up, running, and earning its keep.

Better a Guest than a Host?

The price ranges are as broad as the applications, so the challenge for most nonprofits is finding software with the right price and functionality. Most prices include purchase of the basic modules, but most vendors charge a per-user licensing fee on top of the base price. There may be fees for additional modules, for customization, for updates, and for technical assistance and training.

Sometimes the best strategy for your organization is to leave technology to the tech types and keep your focus on fundraising. Fortunately, software providers have come up with a mechanism for small organizations that can't maintain an IT staff: hosted applications. Offered through outsourcing agreements with third-party commercial service providers, hosted applications allow small organizations to have access to all facets of technology without having to build and maintain their own infrastructures.

One such host is Cisco Systems, Inc., which has a special program to provide the network infrastructure to deliver a complete technology solution to small and medium-sized firms. "By outsourcing the hosting and administration of applications, growing companies no longer need to build the infrastructure or hire and train a technical staff to implement and manage these applications, which translates to significant savings in cost and time," says Eugene Lee, Cisco vice president for small/medium business marketing.

But what is everyone else in the sector doing? How do you find out what works for a nonprofit like yours? Electronic information exchanges such as "peer networks" offer an opportunity to quickly learn from others. Moderated online discussion groups are an excellent way to seek ideas and experience on technology issues from others in the field.

Once such service, hosted by DevelopPro.com is free for development professionals. Its moderated Peer Network Groups are divided by topic area and offer users a forum in which to both offer and seek information with others in similar organizations. This kind of information exchange offers an ideal opportunity to seek advice on the pros and cons of various technology options.

TECHNOLOGY COMES IN ALL SIZES

Craig Ahlquist, vice president of Campagne Associates, has been conducting seminars on technology issues for AFP for the past eight years. He divides fundraising software acquisition costs into five system price-range categories.$300 to $700. For the new, tiny, or limited-budget nonprofit. These systems will meet basic data storage needs.Free to $2,500+ per month. Application Service Providers (ASPs) fall into this category. Some ASPs offer free data storage for organizations with limited records (usually under 1,000); for those with higher storage needs, they offer subscription-based pricing. The price you pay per month or per year is based on your storage needs--a cost to watch as your organization's data needs grow. The low initial investment can make this a good option: $3,000 to $7,000. Most fundraising programs are found in this price range; they offer some level of membership, volunteer, and event management support. Functionality is limited to data storage but with a much larger capacity than found in the lower price range.$15,000 and up. These systems include highly developed donor databases and require significant amounts of training in order to take advantage of features such as barcoded gift entry and integrated event, volunteer, and membership management. This price range can include highly sophisticated systems designed to provide one-stop support to a development director, from tiny tasks to organizational strategic planning.$25,000 to $250,000+. You already know if you need this type of system. These packages support the largest fundraising organizations, and are highly specialized and customized for the organization's needs. Hire professional technology consultants to conduct the research and procurement process before you sign on the dotted line.

Even the tiniest of nonprofits can harness the power of technology to improve the work they do. The key is to know what level of technology is right for your organization before you start shopping. Technology comes in all sizes--you don't have to try to fit yourself to a vendor's offerings. Within a price range, there's a solution for every need, and often several vendors who can offer different package deals.

"You Don't Have to be Afraid of Us"

In November, 10 software companies that serve nonprofits replied to an informal email survey that AP sent out; seven of those respondents--our cover photo people--later also met to offer further perspective on how nonprofits can choose the right technology and provider for their needs.

Despite their competitive products, services, and pricing structures, these vendors turn out to have remarkably similar perspectives on the groundwork nonprofits should expect to do in preparation for purchasing new software, as well as the level of aftermarket service nonprofits should expect to receive. One telling comment: Nonprofits should get over a common reluctance in the sector to talk to sales people!

Among those who replied to the survey, two had been in business for two years; four had been in business 10 to 16 years; and four, 23 to 25 years. All but three focus exclusively on the nonprofit sector; the other three have client bases that are respectively 90 percent nonprofit; 85 percent nonprofit and 15 percent for-profit; and 65 percent nonprofit and 35 percent government. Almost all offer limited (as little as four hours) initial free training and user support (with fee-based follow-on); provide online or printed software documentation; and express a belief in the importance of communicating to their nonprofit clients the realities and tradeoffs of acquiring new software. Here's a roundup of their advice. Q. New software is published all the time. What's the best way to tell whether it's time to upgrade to a new version or to a more advanced software?

Harry Gruber (Kintera, Inc.): If the current software you are using is holding people back, and if the upgrade is within the nonprofit organization's budget and will enable staff members to accomplish all that they need to do--but cannot do now--then it's time to make a change.

Charlie Cumbaa (Blackbaud): There are two reasons to move to a more advanced software version: an organization's needs change in some significant way, or new technology presents a way to gain a significant benefit by changing the business process. Periodic maintenance upgrades help nonprofits take advantage of software enhancements that vendors are continually making, based on their feedback from customers. A caution: switching from one vendor solution to another can often be costly.

Joseph Scarano (Araize): The first thing to do is list all the features that the new software has that you cannot do with your present software. If these new features are essential to you to help make your job more efficient, then you should consider the cost-benefit ratio of upgrading. If the software vendor will no longer support the old software you are using, then you may have no choice but to upgrade.

Craig Ahlquist (Campagne Associates): When thinking about upgrading, the most important thing to evaluate is whether or not a particular product will help you to either save more money or raise more money than your current system. Ideally, a new product will do both better than the current product. In addition, the system should pay for itself within 18 months of purchase.

Henrietta A. Yelle (PG Calc Incorporated): The vendor should educate customers and inform them when it's time to take the plunge and update software. In the case of our software, for example, it's our job is to know when tax law changes will require software updates--and to tell customers.

Vinay Bhagat (Convio): Technology obsolescence represents a significant problem for many nonprofits. Why did it take so many organizations so long to migrate to Windows-based systems from DOS? Because upgrades are expensive and, more important, they're extremely painful. A typical software upgrade triggers significant disruption for an organization. But the Internet changes everything. When software is provided via the Internet by an application service provider (ASP), upgrades can be delivered seamlessly without the client organization having to worry about installing any software. This method of delivery makes it easy for an organization to keep pace with the latest innovations.

Robert Alves (Advanced Solutions International, Inc.): First, take a long look at the longevity, strength, and the software development strategy of the software manufacturer. In today's fast-paced information age, it takes focused dedication and large amounts of resources to keep a customer's software from becoming obsolete. It's important to work with a software manufacturer who will constantly keep you current with the latest software advances by providing regular software updates.

Then, ask yourself if your current software product manages more than just tracking pledge and donation information. Most fundraising organizations manage committees and volunteers, create orders and fulfillment, manage special events, and much more. Your software has to be versatile. Finally, your software must provide Internet connectivity to your data. We call this e-CRM. The ability to gather new prospects, collect donor preferences, and communicate your needs via your database is, without a doubt, the fastest growing need you have.Q. How can smaller nonprofits keep up with advances in e-philanthropy technology when there's no onsite IT department?

Robert Alves (Advanced Solutions International, Inc.): Most small nonprofits can afford the initial investments for _e-philanthropy technology. It's the long-term support that becomes an obstacle for most. Software vendors providing staff training and technical support for normal maintenance of computer hardware components from local providers can help small nonprofits afford the e-technologies and see a much lower cost of ownership over time.

Charlie Cumbaa (Blackbaud): Many systems today, whether deployed onsite or through the Internet, don't require a lot of IT support. What's essential is having an e-philanthropy solution that seamlessly integrates the front-end Web outreach with the back-end constituent relationship system. Without this integration, an organization without IT staff will have a _difficult time ensuring that vital, confidential donor and gift data are captured and transferred effectively into the fundraising database. For those organizations needing a little extra _IT assistance, vendors are providing more technical support services. These services give even very small organizations access to specialized resources at very reasonable costs.

Craig Ahlquist (Campagne Associates): Keeping up with e-philanthropy doesn't always necessitate an IT department. Much of this technology has been made easy to use. Stay in close contact with your software support and account representatives and stay plugged into the technical journals. There are some great IT resource centers specifically for nonprofits that can provide knowledge and resources. People should also use AFP as a resource--the Resource Center is a helpful place to start. Another good place to gather information is through various email discussion lists that address development work. The CharityChannel site hosts many.

Vinay Bhagat (Convio): The premise of an ASP is that _an outside company with appropriate expertise can manage _the specific technology in question more effectively than a nonprofit organization. This principle applies to virtually all nonprofit organizations, but particularly to small organizations with no or limited onsite IT. A strong ASP will take care of data management and software upgrades and troubleshooting and provide technical support. The nonprofit will not have to invest in any additional hardware beyond desktop computers or hire technical staff to maintain the system.

Another challenge faced by small nonprofit organizations in the development function is the requirement by some donor management software packages for dedicated, highly skilled administrators. New advances in software design have emphasized ease-of-use as a design focus so that nonprofit professionals can use a software package with minimal training.

Harry Gruber (Kintera, Inc.): The ASP model is ideal _for nonprofits because there's no hardware or software to _purchase, plus no more upgrades, data conversions, client-side software, or 7/24 Internet support costs. ASPs can provide smaller nonprofit customers with complete end-to-end Internet services, all for a fraction of the cost of purchasing their own software and systems. Q. When trying to weigh the best deal, what's the process nonprofits should follow to get information from several different vendors before asking for proposals?

Joseph Scarano (Araize): The easiest way to contact software vendors now is to go to their websites and gather as much information as possible about software features, user profiles, and pricing. Most websites have a "Contact Us" page to request additional information, if it is not on the website.

Henrietta A. Yelle (PG Calc Incorporated): Don't just think "technology"; first determine if e-philanthropy is right for your constituency, and how large a portion of your development effort should be devoted to that area. Use existing resources both inside and outside of your office by

  • Asking for help. Get the word out to your constituents that you need IT help. Seek a technology professional to serve on your board. Form a volunteer advisory committee, and make sure they have guidelines that tie the technology plan to program and development goals.
  • Networking. Speak to colleagues at other small nonprofits. Find out what has worked for them.
  • Educating yourself. Designate someone in the office to learn basic Web technology and teach others. Keep in mind that onsite IT is not necessary to implement Web-based solutions that reside on other company's servers. And onsite IT is not always necessary if your own site is supported by your Internet Service Provider (ISP); make sure your ISP is doing all it can for you.

Charlie Cumbaa (Blackbaud): Be curious! Visit websites; attend trade shows and see what vendors have to say about problems you're trying to solve and goals you're working to achieve; ask other nonprofits about their vendor experiences. _If you're purchasing a major system that will have an important role in your organization's success, the more of this research that you can do, the better. Formal requests for proposals (RFPs) can play a role in this process, but be careful of information overload. All too often, the responses to feature and function questions from all vendors will look very similar. Picking the right deal is more about picking the right relationship than about the lowest cost.

Harry Gruber (Kintera, Inc.): Before a nonprofit organization begins to research vendors for new products or services, it must develop a strategy for integrating the proposed new technology into its existing business model. When there is a plan, a budget, and approval to move forward, then information gathering should begin. The actual information gathering process is straightforward:

  • Look to trade organizations for the latest on technology.
  • Create a detailed RFP or specific criteria for analysis.
  • Have vendors address your criteria in their presentations.
  • Develop an evaluation sheet to grade each vendor.
  • Ask for other nonprofit references and case studies.
  • Negotiate pricing.

Robert Alves (Advanced Solutions International, Inc.): It's important to invite the "Best of Breed" vendors in to meet with your decisionmakers, discuss your specific needs, and offer you solutions and ideas. Ask as many questions as you need to in order to determine the strength of the organization and the ability of the software to meet your specific needs. Then, I recommend taking the time to complete three very important items before asking for a proposal:

  • Ask your vendors of choice to arrange an onsite, half-day customer visit so you can see the software in action. Take important decisionmakers from your office who will use the software and benefit from it. Don't rule out a day trip wherever they want to take you. It will be well worth your time and money.
  • Make telephone calls to five or more additional customers asking specific questions. For example, how is their long-term support handled? How is Internet technology connected to their database? Do they use software for tracking pledge and giving activities?
  • Review the software vendor's strengths: how long they've been in business, how they're reducing the overall cost of ownership for their customers, and the specifics on how they'll keep customers current with future technologies.

Perhaps the best way to wrap up this conversation is with pragmatic, reassuring advice from Ahlquist:

If you are looking for the actual steps in the process, start with the Chronicle of Philanthropy's Annual Tech Guide or AFP's directory of resources and consultants. Then talk to the account representatives. Do some of the guided tours, but don't forgo the demonstration with the account representative. You could miss huge parts of a program by relying solely on marketing material or a self-guided tour or demo disk. Then, once you have gone through that process, start looking for the application that will provide you with the greatest return on investment.

If you are looking for what will be most helpful throughout the entire process, then talk to your account representatives! So many within the nonprofit sector are wary of sales people. Many of these account representatives were development directors in a former life. They have worked, throughout their careers, with hundreds of nonprofits. I know that here, we don't want your business if our program isn't going to work for you. We'll eliminate ourselves if we're not a good fit. You don't have to be afraid of us? we got into this business for a reason.





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