Is the Donor Management System Dead?

“In another 10 years, there will be no such thing as a donor management system.”

That’s what Tompkins Spann, Vice President of Business Development at KELL Partners in Austin, Texas, told me a few months ago as I was researching an article about donor management system trends for the Nonprofit Times.

The statement was intentionally provocative and comes with the caveat that Spann and his colleagues at KELL focus their consulting exclusively on helping nonprofits work with Salesforce—a CRM system. But it also had a ring to truth to it.

Other experts I spoke to talked about the “CRMization” of donor management systems or recounted how often they heard clients express a wish for an all-in-one system that includes marketing automation, fundraising, payment processing, website integration, volunteer management, and event management tools. There’s a current of dissatisfaction with the limitations of most donor management systems.

But is it possible? Can one system really provide everything an organization needs while still being affordable? How well can one vendor develop and maintain such a diverse range of tools?

Some think Blackbaud’s Raiser’s Edge NXT can pull it off. Others are betting that Salesforce and its massive AppExchange will offer an increasingly simple way to put together a customized system that has everything an organization needs.

At the heart of the problem is the question: How good is good enough? For example, it’s unlikely that a vendor will be able to offer an email tool that’s better than MailChimp, Constant Contact, and VerticalResponse. Are you willing to pay enterprise software prices for a second- or third-tier tool?

Integration is potentially a way around the problem of settling, but even with Salesforce, different tools and systems are not always good at communicating with each other and the power of your tool may be dimmed by the limitations of your integration.

And for many small organizations, a CRM system might be too big and not user-friendly enough to entice them to switch. Tech consultants and IT geeks may be thrilled with the power of a system with multiple modules or integrations, but for people on the ground, smartphones and tablets have taught them that technology should be powerfully simple. What Tracy Kronzak of BrightStep Partners in San Francisco calls “button-click ease” is something we’re all starting to take for granted, but that’s not always easy to build, especially when not everyone wants to press the same buttons.

For now, the donor management system has an important place in the market. However, if vendors begin to cooperate to make integration easier or the individual tools continue to be commoditized and only slightly differentiated, we may see donor management systems scramble to become CRM systems or get squeezed out entirely. Maybe check back in about 10 years.

Learn More

For a rundown of the latest donor management system trends according to experts across the nonprofit technology community, read The Evolution of Donor Management and its Fundraising Future at the Nonprofit Times.

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