Yesterday a friend sent me Fred Wilson’s recent post, The End of Pay and Pray – who, as a result of GoFundMe’s purchase of Crowdrise, essentially argues that crowdsourcing is pushing out fundraising databases. I (think I) disagree. Here’s why…
Crowdsourcing is powerful and here to stay. To Fred’s point, it’s been responsible for bah-zillions of dollars from millions of people. It has absolutely modernized and improved how people help each other and how (some) organizations find viral success when they can make a compelling and urgent case. I’m sure it’s made a few good fundraisers sweat about their careers and relevance.
However, that was never the intention (or at least the sweet spot) of fundraising databases.
You still needed marketing minds, graphic/web designers and others to analyze results, select the next strategy, segment audiences, make requests, inform supporters/prospects and repeat. Oh and above all, a compelling case and content was required. Granted, crowdfunding IS supporting (or even replacing) some of that effort.
There remains a (giant) gap in crowdfunding software for the next level of donor engagement – individual donor management.
Helping nonprofit staff know/remember who to talk to next, about what topic, when, via what medium, etc. is still vital. The CRM function still holds value…and so do the people making those decisions. My contention is that nonprofit fundraising software is notoriously terrible at ‘moves management’ (the fancy philanthropy term for the ‘pipeline’).
Further, those that do help with the ‘pipeline’ treat people like data, when we know that fundraising at its core is a relationship-focused process. Don’t just track dates and amounts of gifts, tell me about the person. Show me a picture. I should glance at their profile and be told (or reminded) about our last conversation, their favorite author, where they like to vacation, the latest on their grandkids.
How do you build strong personal relationships with the hundreds or thousands that supported your Crowdsourced campaign? How do you tell who even wants that type of relationship with the cause? How do you understand what part(s) of your mission they love most and would support further if they knew more? Who has the capacity to add a zero (or two) to their last gift if only you could work together to discover what big idea matched a need with their heart?
No software available (that I’ve seen) has made it easy to plan out interpersonal activity with donors/prospects well into the future in an easy, clickable way.
It would multiply a good CEO or nonprofit staffer’s productivity 10x.
If I’m a VC (interested in nonprofit software), that’s where I’m looking next.
Nonprofit Nate 
My favorite quote from that article is “There is no correlation between the amount of money a non-profit pays and the amount of money they raise with these tools.”
That’s true, but it’s also like saying “There is no correlation between how much you pay for your gym membership and how much weight you lose.” Again, that’s true, but who cares?
What matters for weight loss is the effort you put in. And the same is true for a non-profit’s development team. Good tools—whether donor management software or a gym membership—can be useful. And better, higher-priced tools can be even more useful.
But what matters is that you use it.
Thanks Robby – appreciate you chiming in. Oddly, the marketers for fundraising databases, gyms, etc. would have you believe the correlation! I do think Fred and the VC world has the right spirit behind the question ‘are people raising more funds with this particular software’ – but to your point, they’d need more data. If one could show usage rates, increases in loyalty/retention, etc. then we’d be on the right track. No one software is going to help causes raise more money and no one weight-loss program wins above the rest. Their value lies in their role as supplemental tools and support – not the magic bullet.
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