In order to appreciate the need for an IT Strategy, we need to first understand why we need an organization strategy, and then a little about what makes up a strategy for your not for profit organization. I recently read an article on NPEngage by Rose Gear about the basics for a strategy in a nonprofit organization. I’m going to attempt to ‘chunk down’ her article and address the big picture.
Why have a strategy
Every organization needs a strategy. It does not have to be lengthy, but it does have to address your mission and vision in order to explain to others why you are providing your services. It needs to have enough detail that your board of directors, your volunteers, and staff clearly understand what it is that you do. A good organization strategy provides the thought process which leads to mindful decisions.
How does it fit
Part of your organizational strategy needs to address the environment in which you operate. Is the demand for your services growing, stable, or declining? Are there other organizations in your workspace who offer the same or similar services? If so, what is the competitive advantage that you offer which can encourage outside support?
One way to begin developing a solid strategy is to conduct a SWOT (Strengths,, Weaknesses, Opportunities, Threats) analysis. In most cases, the initial SWOT is created internally and is contributed to by leaders, volunteers, and staff. Your board will normally ratify your SWOT and the resulting organization strategy, as opposed to having the responsibility to design them.
Now let’s talk about IT, and how it fits into your strategy, and then the underlying reasons for having an IT Strategy.
Guidestar suggests that the organization should understand how technology can assist in organizational improvement through measurement of progress. Let’s presume that your estimate of the demand for your services is increasing. For the sake of discussion, you have decided that demand will increase 30% in the coming year. What will be the components of that 30%? Your list may be made up of the number of recipients of services, the amount of funds you raised, increase in the types of services, etc..
Now let’s agree that you want to tell your fundraising sources about how much your will grow, and that the best way to do that is to provide them with data. This can include the number of recipients of services now, the kinds of services they received, and how much money it took last year to service them. By the way this should include a personalized description of how at least one recipient was helped Then you share your current goals based upon the data you have about the growth of the needs, and your ability to reach those needs. Why do I keep mentioning data?
“Without data you are just another person with an opinion” — W. Edwards Deming
IT Strategy for Fundraising
One piece of your organization strategy is fundraising. Let’s use the goal mentioned above of a need for a 30% increase in the services you provide. You need something besides asking last year’s donors to increase their gifts by 30%. Let’s examine what may be available, then how you may break down your strategy into processes that will work for you.
Generally speaking each nonprofit has three active audiences in common:
- The recipients of your services.
- Those to whom you report as in your board, the IRS, foundations, and I like to include staff and volunteers in this category.
- Fundraising sources.
In addition there is the entire spectrum of those whom you do not know, the general public.
When you consider these and how they affect your organization you understand that to some extent they are very interactive. For example the recipient of a charitable service has friends, relatives, and neighbors who may become sources of funding or governance. Your staff and volunteers become ‘invested’ in your recipients and your sources of funding become more involved if they are kept informed and have a positive impression as to how the nonprofit is operated.
Your fundraising strategy may include increasing the number of donors, increasing the average donation, and broadening the scope of sources that you solicit. Your donor records from last year will provide you with all of this information.
Data to help you reach your fundraising strategy
- Data showing you the types of sources for the donations.
- Related to recipients of your services
- Former recipients of your services
- Board and staff members
- General Public
- Amount of this year’s donation, and the reason
- Annual Appeal Letter
- Fundraising Event
- Organization member or volunteer
- Knows someone who receives your services
- Response to your website
How will you use this data? Research will tell you that the more personal your communications, the closer the recipient will feel toward your organization. Therefore a personalized letter to your major donors from the Annual Appeal and/or the fundraising event is a productive idea. However, it that same person or organization also receives another letter that is not personalized, the positive effect is lost.
Therefore the IT related to your fundraising should allow you to parse information down to the level you desire. We recommend that your information should allow you to identify combinations of categories; for example the board member who sends a check in response to your Annual Appeal, and also contributes within a fundraising Event deserves a separate recognition, and not multiple letters for each. This level of information will also allow you to identify those who may be willing to refer someone for a first time donation, again requiring separate communication.
It is not a leap to understand that your IT Strategy needs to look at your fundraising at the same time as your email or word processing systems. In addition when funds are received, your financial system needs to reflect the same information.
IT Strategy needs to be closely related to your organization strategy. In fact it is a major component to your entire strategy.
Now, about that donor management program you are considering….. At NPTech Projects our opinion is that newer organizations are not expected to have the most sophisticated tools for donor management. Larger and more mature organizations are expected to appear as sophisticated as their peers. You should be looking at IT products that will allow you to be as sophisticated as you would like to be.
This means that you should be looking at technology that easily interfaces with all of your audiences at all times. When you are addressing fundraising, the letter to your largest donors is different from that to smaller donors. We know from research that there is a large benefit to be gained when large donors consider themselves to be insiders, and even more so when you learn that they have recommended you to others.
Technology, People and Processes
Before you commit to making any change, you need to consider that technology is one piece of the pie. You must also commit to making changes in the processes with which you collect, store, and retrieve information. A primary consideration in all change is the standardization of your processes. If you decide to change your donor management system, you will need to document the change in processes. Write down a description of what the actual change in process will be. Then write down a description of the current process. We suggest that you include the ‘owner’ of the current process as you go through this. That person will be able to help with the next piece of the pie. All technology and process change involves the people. The owner of a process will know who needs to be trained about how to store and retrieve the new technology and processes.
In future articles we will be addressing the separate components to your IT Strategy, and we will be discussing and working on each of them in our Impact Circles and workshops.
We believe that we can help you simplify your IT Strategy. We will help you to chunk the problem down into logical pieces that you can use within your strategies..
Sources and Resources:
- NPengage’s article 8 Strategy Basics for nonprofit organizations by Rose Gear.
- CyberAlert: How nonprofits can use data to improve donor engagement strategies by William Comcowich
- Guidestar: Update your nonprofit profile
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