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eCRM: The New Face of Fundraising

September 17, 2007
X Factor Consulting, LLC
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 Donor development has gone high tech, and many nonprofit organizations (NPO) have been left behind. No longer can NPO plan on simply sending a few mailings and making a few phone calls to garner support. Today’s donors expect to be known, appreciated, and approached in ways and at times that are convenient. New technologies allow you to do just that. 

Most people are familiar with the term CRM. CRM stands for Customer Relationship Management and has long been an emphasis in the for-profit world. In the nonprofit sector it is most often referred to as donor development. In essence, it is the emphasis on and the steps taken to build and manage relationships with constituents or clients. With the development of new technologies and the increasing expectations by philanthropists, CRM has expanded to include eCRM (electronic CRM). eCRM will never replace the Relationship Management process, but should be used to enhance the process and strengthen relationships.

eCRM is quickly becoming a necessity for sustainable organizations of all sizes in the nonprofit world, as well as in the for-profit sector. Whether the organization has one employee or hundreds, CRM and eCRM should be a priority for the organization.

We define eCRM as an organization’s plan for developing and managing ongoing constituent relationships through the appropriate use of technology, including email, Internet marketing, community websites (such as Craig’s List, FaceBook, MySpace) and organizational websites. Ideally, eCRM should be a part of the overall Relationship Management process. However, if a nonprofit is not currently engaging in CRM or donor development, eCRM can be the first step taken on this journey. (Next month we will focus on how to make an IMPACT with eCRM)

Online Constituents: The Real Picture

Currently, less than 5% of donations made to nonprofit organizations are made online. This number is forecasted to grow to 30% by 2010. (Source: Harvard Initiative on Social Enterprise) This is a projection nonprofits would be remiss to ignore. So, where are these donors coming from? You might be surprised.

Historically, the online audience has been younger and newer to philanthropy. However, research indicates that older people are the fastest growing segment online. That means not only are NPO able to reach new, younger donors, but they are quickly gaining access to those philanthropists that have a long history of donating and advocating for organizations.

Additionally, most nonprofits have significantly more postal (snail mail) than email addresses in their database (assuming there is a database). As the nonprofit sector is awakening to the potential of eCRM, more attention is being focused on gathering email contact information from current and potential donors. This alone will impact the amount of online donations received by organizations.

Why Should Organizations Engage in eCRM?

There are many benefits to engaging in eCRM. eCRM is a much more cost-effective communication solution for nonprofit organizations than traditional media. Printing and mailing a customized newsletter or solicitation can be very costly; whereas, this can be accomplished through email or a website fairly inexpensively. eCRM also provides a way to build ongoing relationships with constituents. Today’s technology allows NPO to customize messages for unique individuals or groups – and with the increasing expectations of constituents this is crucial.  

eCRM is also a powerful tool for engaging supporters (donors and volunteers) and advocates. As Rollo May, psychologist and author, once said, “Communication leads to community, that is, to understanding, intimacy and mutual valuing.” eCRM allows NPO to build that community by communicating effectively and in a timely manner. Organizations can share relevant information and quickly notify their database of needs and issues that require support.

For example, Hurricane Katrina was a disaster that spurred many grassroots organizations to action. In fact, many new 501(c)3 organizations were created during this time and their success was due in large part to the effective use of eCRM. Organizations of all sizes could quickly (less than 24 hours) begin emailing their constituents with updates and needs. Websites could also be updated to reflect the work required and accomplished. (Visit www.katrinasangels.org for an example)  To do this through traditional mailings would take time and money that simply wasn’t available. The situation was urgent and required urgent attention and eCRM provided the means for providing immediate help. 

Community is also built by allowing people to self-identify with an organization. For example, your organization may create an online campaign that lets people sign a petition expressing their support for a cause, like Brooklyn Supporting Youth. Once a person has signed-up, they should receive updates on the programs, outcomes, opportunities, etc. within your community. The goal of these communications is not necessarily to solicit funds, but to build support for the cause. After the relationship has been established and trust has been nurtured, it will open the door for potential fundraising.

Renowned speaker and writer Kay Grace once said, “In good times and bad, we know that people give because you meet needs, not because you have needs.” This reality is proven as nonprofits regularly share information and outcomes with constituents in order to build relationships. And since eCRM is so much more cost-effective, nonprofits can begin building and maintaining these relationships more economically and without the need to solicit funds at every touch point. These types of helpful updates build trust and show accountability. They should not replace traditional means of CRM but should enhance constituent relationships and keep your organization in the front of the minds of your audience.

In today’s high-tech world of fundraising, eCRM is one the best tools your organization can implement. The benefits are outstanding and the market is growing. Waiting too long before beginning to implement an eCRM plan of your own can cost you relationships and money.

Next month, we will begin exploring ways to be effective in the eCRM process.

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