Mostly I have lots of questions and concerns that the firms won’t be able to address until the merger is completed — if then. My main questions are about product strategies. (How) will this affect Convio’s online marketing suite? Common Ground? Luminate? NetCommunity? Sphere? Raiser’s Edge? eTapestry? (How) will this affect Blackbaud’s plans for, or ability to build, implement, and support Enterprise CRM? Will Blackbaud continue to develop on both the Salesforce and Infinity platforms? Will they really be willing and able to maintain all of these products and codebases?

While I generally think vendor consolidation is bad for the nonprofit world (unless the vendor being absorbed wasn’t a strong player to begin with), I’m less concerned about the impact on small nonprofits. There are tons of choices out there for small and mid-sized organizations. Idealware’s Consumer’s Guide to Low Cost Donor Management Systems reviewed 30 systems, the majority of which don’t come from Convio or Blackbaud. I’ve also been compiling a list of every donor database I come across at https://socialsourcecommons.org/toolbox/show/1661

I’m more concerned about the top end of the market. There were few full solutions designed for large nonprofits to begin with. Blackbaud has already bought Team Approach and PIDI, and (assuming this goes through) Luminate will join that club. On the recent NTEN community call someone asked the panel to name 5 vendors (other than Blackbaud and Convio) to whom we’d send a CRM system RFP for a $100 million nonprofit. It’s a real struggle to come up with five that can handle:

• Millions of records and hundreds of users
• Complex family, social, business, corporate, and financial relationships
• Provides robust, flexible support for all forms of fundraising, membership, marketing, and communications
• Support advocacy, volunteer management, complex events, electronic communications, content management, online payments, and merchandise sales
• Provide strong reporting and analytic tools
• Has an intuitive user interface for casual users
• Supports streamlined, high-volume data entry tools
• Provide data integrity tools to keep the data clean
• Has an open API and flexible import and export tools
• Has strong role-based security as well as strong protection against hackers
• Supports multiple locations or chapters, multiple currencies, multiple languages, and multiple character sets.

In addition, the vendor or consultant needs to understand nonprofit best practices, workflows, reporting needs, fund accounting, and unique requirements like giving societies, membership benefits, fair market donation values and tax benefits, soft credits, gifts that are split between funds or sources, auction gifts and purchases, and how to provide donor recognition credit for gifts that have no tangible value. Finally, the system needs to be backed by strong implementation practices, training, and ongoing product development and user support.  Software alone seldom gets the job done.

I’m also concerned about the confusion this will cause in the industry. I’m currently working with clients that are considering Blackbaud and Convio’s database products (among others). They don’t want to choose a product that won’t get the full resources of the merged company, or could even be killed off. Some independent consultants who implement Common Ground have questioned whether my clients even want to consider that product until the dust settles. (I’ve also heard from competitors that are expecting to pick up new clients because of the confusion).

And I’m concerned about confusion at Blackbaud. My experience with past acquisitions was that it took months or years for sales reps to figure out where their products stood. Sometimes they would pitch competing Blackbaud products against each other. Other times they would refuse to show us a product that a client was interested in because of an internal decision to promote product A over product B.

Although Blackbaud has bought companies and immediately killed off their products, (e.g., Fund-Master and GiftMaker Pro), of late, they’ve acquired companies and kept their products going (Team Approach, eTapestry, PIDI, Kintera). However, in most cases I haven’t seen evidence that they have invested in the future of these products. In some cases (like Team Approach), clients have been told that there won’t be any future product enhancements.

I expect that it will be many months before we have any clarity about what this merger will mean and years before anything significant happens. But it’s hard for me to believe that Blackbaud will be able to support all of these products. I expect that some clients will be given notice that they should make other plans. It’s also hard to imagine that established products will be killed off — at least not any time soon. I’m more concerned about newer products, or those with smaller customer bases.

I do expect that this will create opportunities for existing systems. If nothing else, many nonprofits won’t be able to wait for months or years to see which products will survive. But those companies will need to be able to provide the tools and support that nonprofits need, and have the marketing muscle to get the word out.

It could also open the door to an open source project. During the NTEN call we discussed Tessitura, the performing arts fundraising and ticketing system as an example of a successful effort. But that product started out with development and support from a major organization (the Metropolitan Opera). The Met was able to form a separate company to invest in and support the product, and it’s been a huge success.
 

On the other hand, many organizations (and this by no applies just to nonprofits) will throw money and time at trendy projects without thinking about whether they're the right tools, with the right strategy, investment, support, or marketing behind them.  By all means, try new things.  But do it smartly.  Do your homework, test, learn from others, learn from your own failures, and get better at it over time.  And don't neglect what's already working for you.

Let's say the following donations will be processed by different nonprofits in the United States on Jan. 2, 2012:

1. A check mailed (and postmarked) on December 29th that arrived in the office on January 2nd.
2. A voice mail donation via credit card left December 29 (yes, it happens). A staff member heard the message on Jan. 2 and charged the credit card that day.
3. An online donation made on December 31st. The credit card was charged immediately. The nonprofit was notified of the gift on Jan. 2.
4. An online donation made on December 31st to a different charity.  That charity's online giving system did not charge the credit card immediately -- instead it sent an email (ideally, an encrypted one) to a staff member that the donation needed to be processed.  The staff member charged the credit card when she returned to the office on January 2nd.

Which tax year are they each for? 

The answers below are based on IRS Rules and Regulations: What You Need to Know to Stay Out of Trouble by Alison L. Paul, Executive Director of the Montana Legal Services Association, from the book Advancement Services: A Foundation for Fund Raising, 2nd ed., published by the Council for the Advancement and Support of Education.
 

1. "The IRS has stated that a charitable gift made by check is complete at the time the check is delivered or mailed, provided the bank eventually honors the check." The check would be considered a 2011 charitable contribution even though the nonprofit did not receive the check and the funds did not clear the bank until January 2012.
2. "A gift made by credit card payment is complete when the charge is made." (Note that is doesn't matter when the credit card bill is paid.) The charge is considered made when processed by the recipient. So if the charity did not process the charge until January 2012, the donor would be treated as making the gift in 2012 rather than 2011, as she intended.
3. Unlike scenario 2, the online donation service charged the credit card immediately.  Even though the nonprofit wasn't notified of the donation until 2012, the gift was "made" in 2011.
4. Scenario 4 is the same as scenario 2.  The credit card wasn't charged until January, so the gift is for 2012.

Now, nonprofits should not set themselves up as tax advisors.  The donor is responsible for documenting their gifts in case of an audit.  On the other hand, nonprofits are required to provide correct information to donors and can be fined for knowingly falsifying tax receipts.

For further information, see IRS Publication 526, Charitable Contributions, and Publication 1771, Charitable Contribution, Substantiation and Disclosure Requirements, and John Taylor's "Annual Date of Gift Message".

The maxim "Fast, cheap, or good--pick two" is true.

You want the technology to be forward-looking but also want to avoid shiny object syndrome.

You want to make a reasonably quick decision but also need to get input and buy-in from stakeholders.

You want to think big but don't want to neglect operational details.

The system needs to be intuitive for fundraisers but streamlined for data entry. 

It needs to be easy to get reports from the database but it also needs to support complex selection criteria.

How can you know what you don't know (e.g., what a new database can do when you only know what your current one does--or doesn't do, what you'll need in the future)?

There are literally hundreds of choices. How do you get down to one?

Have you experienced this "analysis paralysis"?  How have you solved it (or have you)?

What the Customer Wanted

I would like to make everyone aware of a recent situation here that is most likely a scam to launder stolen credit card funds, appearing as a gift.

• A $9,000 gift is received and approved from an unknown entity (in this case a “Cassandra Harvey”), with Smyrna, GA address, Yahoo email and legitimate phone number.
• The next day, we receive an email from the donor with the following info: the $9,000 gift amount was a mistake, it should have been $900. The gift was made in memory of the donor’s late mother (never named) who had a wonderful experience at our college. Further, the original credit card from which the gift was made has been closed due to recent suspect activity and could we refund the $8,100 balance back to another credit card.

Comments

• We were able to refund the money back to the original credit card and immediately notified the credit card company and local police. Upon notifying the “donor” that we can only refund the money back to the original card, she replies that the original account is closed and that we need to use the other card.
• The scammer had done enough research to use specific references to our college to make it appear genuine, although there was considerable broken English in the emails.
• With the flurry of gift activity by our gift processing staff and within the context of providing good customer service to our donors, it could have been easy to overlook normal business rules and refund the balance to that other credit card
• Most likely the originating credit card is stolen, and by having us charge it and then remit most of the funds to another card, we would be “laundering” the funds for the scammer

As if we didn’t have enough to do right now!

It's a tough problem.  Here are a few approaches (other than locking down data entry):

1. Policies. You need clear data entry standards.
2. Security. You need to control who can make changes and what they can change.
3. Training. No one gets access to change data without training on your policies. Training should be targeted to role. You don’t need a week of training to enter a contact report.
4. Monitoring. Someone (or multiple someones) needs to review new and changed entries.
5. Retraining. When people make mistakes, bring it to their attention. Some organizations make that person fix the mistake. If they continue to make mistakes, you need to retrain them and be prepared to take away their data entry access.
6. Automation. You should at least run reports on a regular to look for errors. You may be able to automate some fixes. You might also use vendors to perform cleanups like merge/purges on duplicates.
7. Acceptance. Some things have to be fixed by your office or by Development Services. No one is going to fire an effective fundraiser because she’s bad at data entry (although they might get her an assistant who will handle the entry). Donors will give online and misspell their own names, or leave the caps lock on.

Decentralized data entry is efficient and is the only practical approach at some organizations. But the more people you have entering data the more problems you’ll have with quality control. If no one's in charge of quality control you're going to have a database full of garbage.  For more on this, see my posts:

New Year’s Resolution: Be Good To Your Data

Best Practices for Managing a Database

I agreed, but only to an extent. On one hand, those who decide that technology will be their vocations need to push for roles and titles that reflect what they really do. They're ready to graduate from their apprenticeships. But many accidental techies don't want to become intentional/professional/full-time techies. And some may love the tech part of their jobs, but it will remain a small, incidental (accidental?) part of what they do.

My article is meant for those who want to stop being accidental and move into a technology leadership role.  Here's what I had to say: http://www.nten.org/blog/2011/02/01/going-accidental-techie-technology-leader

We desperately need to get a new donor database and most of them are totally unaffordable!!

Looking at the Idealware Low Cost Database report, I find that there are so many considerations that it is quite complicated to make a choice. I am tending towards (system x) because it would seem to match what we need right away, and we could afford it. 

Could you please advise me as to whether this is a good choice, or whether we should consider other options as well?

Here's how I respond to questions like this:

I can't say whether (system x) would be a good fit for you. As you said, there are a lot of considerations. I'd need to spend time learning about your organization to make any kind of informed recommendation.

You said you've read the Idealware/NTEN Consumer's Guide, so you know that (system x) got a strong rating there. And many of my clients use (system x) and like it. But none of that means it will be right for you.

The only way I know of to answer your question is to go through these steps:
Write down what you need in a database, in as much detail as you can. Then identify the deal-breakers on that list. A deal-breaker is a feature you truly cannot live without. Even if the database could do everything else on your list, was easy to use, and the price was right, you couldn't use it without this one feature. For instance, you might need the ability to target direct mail (and email?) to constituents based on factors like past donations, interests, event attendance, recency of gifts, lifetime giving total, etc. Or you might have some reports that are mandatory, like a lapsed donor report.

Once you know what you're looking for you need to test vendors against those needs. You can start by sending out a Request for Information or Request for Proposals with some yes/no/maybe questions about your top needs (e.g., Can we send mass emails directly from the database? Can your system accept donations online?, etc.). I view this step as optional, but it can help you eliminate vendors that can't meet your top needs, or include vendors you didn't previously know much about.

You also need to know what it costs to get started with your system (purchase, conversion, training, etc.) and what's the 5-year cost (some systems cost a lot in year 1 but not much in subsequent years, some don't cost to get started but the annual costs can add up). This step is not optional. It might be part of the above RFP or RFI, or you might just ask about costs.

Next, you need to see the vendors demonstrate how their systems will meet your needs. Give them a list of features they need to show or steps they need to go through (e.g., show how to send a mass email, or show how to enter a donation that will be split between 3 funds, or between 3 donors).

Next, you need to get a demo copy of the database and do your own testing. How easy is it to do things you'll need to do regularly, like enter gifts, look up donors, change addresses, and run reports.

Then you need to check references. Talk to organizations with similar fundraising programs, staffing, IT support, etc. Ask each one the same questions and compare the results.

Last, you need to get a contract that shows you all of the costs, including setting up the system, converting your data, (ideally) documenting your data entry processes, and training your staff.

FYI, Idealware has a webinar on this topic coming up in September:
https://salsa.democracyinaction.org/o/957/p/salsa/event/common/public/?event_KEY=61562

They also have recordings of past webinars. Here's one of mine:
https://salsa.democracyinaction.org/o/957/l/eng/p/salsa/event/common/public/?event_KEY=37802

And here's one by Eric Leland, the main author of their Low Cost Database guide:
https://salsa.democracyinaction.org/o/957/l/eng/p/salsa/event/common/public/?event_KEY=29015

I hope this helps.

Advancement Services should be the foundation supporting the rest of Advancement.  For me the case for investing in Advancement Services comes down to three factors: efficiency, support for Advancement (fundraising, member relations, alumni relations, stewardship, finance, communications, government relations--whatever comprises Advancement at your institution), and support for constituents (donors, prospects, alumni, members, parents, the public). The return on that investment (and the next gift) comes when Advancement Services sends out timely, accurate, and clear receipts; the system they maintain keeps accurate records on donors and gifts; the system reminds Development Officers of their next planned contact; the system helps identify new prospects; the system produces reports that accurately track progress and support forecasting; the system enhances (and doesn’t get in the way of) communications between the institution and its constituents; and systems run reliably, so staff and constituents have access when they need it. 

Efficiency

Efficiency seems simple enough: if you don't have the right resources (people, tools, training, procedures) you will waste time and money.  It will take you too long to do everything, you'll be too rushed to do the job right the first time, and you'll spend a lot of time fixing mistakes.  Complaints from internal and external audiences will be frequent, perhaps the norm (until people get so fed up they no longer bother to complain and simply work around you).  You'll spend all your time fighting fires and won't be able to get to anything that's not an emergency.  (This is not to imply that throwing more staff or money at the problem will necessarily solve it-- leadership, management, and prioritization are also critical.)

Support for Advancement

Supporting colleagues also seems reasonably straightforward.  Advancement Services needs to have the resources and training to provide good customer service.  It needs to get data into and out of the database in a timely manner, produce accurate reports, respond to requests, anticipate needs, keep up with changing technologies and policies, and all the other things I mentioned in Ingredients of a High Performing Advancement Services Shop.

Support for Constituents

Supporting constituents may not leap to mind as part of Advancement Service's role, but it's critically important.  In his presentation Advancement Services - The Advancement Cornerstone?, John Taylor cites statistics from a 1999 study by TARP Research.  Among other things, TARP found that: 

• Twice as many people are told about a bad experience as are told about a good one.
• One unhappy customer will tell ten others. Thirteen percent of them will tell at least twenty other people.

In his blog post on evaluating fundraising programs, Measuring Success The Buffett Way, Jason McNeil asks What measures might Warren Buffett use to evaluate development effectiveness?  He suggests several, including donor retention. Donor retention can definitely be affected--positively and negatively--by Advancement Services. 

• Do donors get timely, accurate receipts and thank-you letters?
• Are they listed properly in the honor roll and other publications?
• Are constituents' names spelled correctly on the correspondence they receive?
• When constituents request changes (e.g., to spelling, phone numbers, or addresses), are they made promptly and accurately?
• Are constituents on the mailing lists they've asked to be on? Are they removed from those they don't want?

It's not within Advancement Services's power to guarantee that donors will continue to give or that constituents will be satisfied and supportive, but Advancement Services can definitely drive them away.

The program for a recent show at Berkeley Repertory Theatre described their facilities department using words that are perfect for much of what Advancement Services does: "to help you forget about what happens behind the scenes."  In general, Advancement Services should be invisible to constituents.  Behind the scenes, however, they should be leading the way to ensure that operations run smoothly and that policies, procedures, technologies, and training support the institution.

Thanks to Charlie Hunsaker for his input on this post.