A nonprofit CRM is arguably the most important software investment for nonprofit organizations, but how long do buyers wait to see the return on investment (ROI)?
Review data collected from G2 users in 2023 indicates that roughly one-third of nonprofit CRM software buyers aren’t even getting a full return within their contract cycle.
What is nonprofit CRM software?
Whereas traditional CRM systems support sales cycles and customer relationship workflows, a nonprofit CRM provides industry-specific features tailored to the unique fundraising needs of nonprofit organizations. The “C” stands for a constituent in this context and can refer to a donor, volunteer, member, or any person who has ever had a touchpoint with the organization.
A great nonprofit CRM will boast plenty of integrations with fundraising, nonprofit accounting, volunteer management, and even grant management vendors, centralizing these disparate data sources and supercharging the workflows of marketing, finance, and development teams.
Nowadays, more nonprofit CRM systems even offer features to help program staff manage outcomes for evaluations and grant reporting.
AI is proliferating this market now, too, enabling an unprecedented level of personalized outreach and prospect management. Fundraisers can target the right prospect with the right message at the right time and see greater success in securing gifts.
Nonprofit CRM systems rely on donor prospect research databases to utilize these features, but automation allows fundraisers to spend less time connecting the dots and more time connecting with new and current donors.
Technology will never fully replace fundraisers, though the right CRM system separates successful nonprofits from the ones treading water.
Usability also plays a huge role in whether users get maximum value from their nonprofit CRM. After all, features don’t matter if users fail to utilize them properly. Usability can be promoted through intuitive interface design, dedicated customer support, and training investment for staff.
Nonprofit organizations often have the reputation of being technologically and financially limited, so smart product design is the most crucial aspect.
Nonprofit organizations are feeling the economic strain
The latest data available from Statista shows that rising operating expenses were the greatest concern for nonprofit organizations in the United States during 2022, with 43% of respondents considering it their biggest challenge.
Limited staff capacity ranked second, with 41% of respondents citing it as a significant challenge. Naturally, technology spending is going to fall lower on the priority list in this kind of environment.
The ever-growing digital shift demands nonprofits prioritize smart technology investments or risk being left behind by a new generation of donors. Shiny new platforms with advanced automation promise to free up staff time, but organizations must feel confident that their investment will yield quick results.
Despite these capacity constraints, G2 reviewers in 2023 reported an average 2.35 month go-live time when implementing their nonprofit CRM.
While this may signal organizations rush implementation and sacrifice value, two other thoughts come to mind:
- Is there a perceived learning curve to nonprofit CRM systems that vendors don’t consider in their product design?
- Are enough nonprofit CRM vendors keeping their products competitive with current technological trends and expectations?
G2 reviewers and their current impression of nonprofit CRM systems
Nearly 73% of G2 reviews left for a nonprofit CRM product in 2023 rated Ease of Use as a 6 or 7 out of a scale of 1 to 7. This indicates that, for the most part, nonprofit CRM vendors are delivering functional, intuitive products to customers.
Interestingly, user adoption for nonprofit CRM sits at 72% overall, which means that a little less than 3 out of 4 users are utilizing the system.
There are several factors to consider when looking at that statistic:
- Not every nonprofit CRM system offers features that support program staff; they may use a separate system to manage program outcomes and evaluations.
- Development staff at different seniority levels have varying degrees of access to the CRM. Finance staff may also not interface with the system much and rely on development staff to pull reconciliation reports from the CRM.
- Organizations that can’t afford technology support and training will struggle to adopt and enforce expectations on system proficiency. When staff find a system frustrating to use, they’re going to invent workarounds or resign to only getting partial benefits.
- Alternatively, some nonprofits may be jumping the gun on AI investment and trying new solutions that their staff aren’t equipped to use proficiently.
Digging further into the 2023 review data for G2’s nonprofit CRM category, the average reported ROI for users was 16.95 months, but the average contract length was only 11.5 months. This means the average buyer won’t achieve full ROI until months after their contract expires.
Nonprofits operating on a thin budget can’t justify any new costs associated with renewal, leading them to abandon their current system for a more affordable replacement if the renewal isn’t feasible.
Of course, the irony is that this process is often more expensive in the long run when factoring in the costs of data migration and staff time spent learning a new system.
At a glance, more than one-third of nonprofit CRM reviewers waited 13 months or longer to achieve ROI. Perhaps most concerning, nearly 16.5% reported an astonishing four-year or longer timeframe.
I’m reminded of a former nonprofit role where the organization couldn’t afford the most current version of the CRM system, so we used an outdated, unsupported version. Whenever something broke, we crossed our fingers and hoped that someone on the internet had generously written a detailed solution.
Many variables can impact an organization’s ability to achieve full ROI on their CRM on time:
- How comprehensive is the vendor’s implementation and ongoing technical support?
- What is the nonprofit’s technology budget?
- What were the organization’s goals when selecting their current or previous CRM system?
- Does the organization have strong data hygiene practices?
- How tech-savvy are the staff in general?
If an organization doesn’t know how to make the CRM work for them, then their interpretation of ROI looks different.
Not all nonprofit CRMs are created equal
The relatively longer average ROI period, in contrast to the quick go-live period, presents an opportunity for more vendors to take a collaborative approach with prospective buyers and current customers.
Feature roadmaps, flexible contract models, consistent customer education, and other initiatives like these go a long way in helping nonprofits make their CRM systems stick. The burden of achieving ROI shouldn’t fall entirely on the organization, after all.
Intentionality will be crucial for nonprofit organizations and the vendors that cater to them in the coming years. Intuitive, proactive product design does a lot of heavy lifting, but buyers should also have a defined strategy in place and understand how smart technology prioritization and investment support that strategy.
While some donors still don’t believe that technology is intrinsically linked to stronger outcomes, organizations owe it to themselves to invest accordingly in their long-term success.
By partnering with the right CRM vendor, nonprofits can achieve quicker ROI and stay on top of rising digital trends.
Your nonprofit CRM software could play a key part in your donor acquisition strategy.
Edited by Jigmee Bhutia
