ProSpeak: A Layman’s Guide to Understanding Today’s CRM Solutions for Nonprofits

Over the past year, constituent relationship management software vendors for nonprofits have been parading around the concept of “open” to the marketplace like presidential candidates touting “change.” Like “change,” “open” is something everyone wants, but few people define it the same way. This creates confusion and, inevitably, disappointment for customers who expect their concept of “open,” but get the vendor’s version instead.

Even worse, all the marketing buzz around the “open revolution” is obscuring the real question: How does your organization truly get the unique CRM features and functionality its business processes require to execute your mission and change lives?

CRM today is the heart of most nonprofits’ marketing, fundraising and communications strategies. A good CRM platform enables a nonprofit to build long-term, meaningful relationships with constituents and drive giving in a scalable fashion to fund important work.

“Open” is becoming an irresistible force in nonprofit CRM because closed, proprietary technologies are too restrictive, dictating how to manage constituent relationships. The advantages of one closed CRM solution over another are based on how well each product’s structure complements your organization’s relational model — not the robustness and effectiveness of the technology. And no software ever mimics your processes, needs and desires perfectly.

Open CRM starts with full-featured platforms and applications, and allows you to adopt the functionality, interface, flow and processes for your organization’s unique needs.

The bottom line when you cut through all the noise is that there are three levels of openness for nonprofit CRM software:

1. The Mail Slot
The narrowest form of openness, this is analogous to the small, covered slat in a front door. Some don’t consider it “open” at all. A software company creates a portal to allow very specific types of data from a very specific source to pass into your system. Usually, you pay the vendor to build and install this functionality, or it’s the result of a partnership between vendors to produce integrations or connectors. An example is integrating a CRM system and an accounting package so transaction data passes directly into the system for reconciliation and compliance.

This approach only works for precisely the business rules and products originally outlined. It’s as though you wanted to receive and send packages through UPS, FedEx and the U.S. Postal Service — that would require three mail slots installed to accommodate each company’s packages. Although this model is open, since the vendors involved have standardized the mail slots, you still pay each to install its standard mail slot. It leaves you little control, and future changes usually trigger additional costs.

2. The Door Chain
Application programming interfaces (APIs), which vendors are beginning to unveil, represent a big step toward openness — but an API is like a door with a chain on it. APIs enable custom integrations with particular modules or elements within the software and exist for everything from constituent data (biographical, contact, etc.) to transaction information and processing.

APIs reduce reliance on vendors to design applications for your needs or build custom applications. But you’re still restricted because APIs are for specific modules and allow you to read and write specific data. Plus, these non-native applications (outside of the software) require separate, ongoing maintenance.

In this scenario, the door is cracked but cannot open further, so you’re limited on the size of the packages that can pass through the space. You can peer inside and ask that visible items be passed to you. However, most organizations need the ability to swap out furnishings, or in tech terms, create a flow for their software space that meets their unique needs.

For instance, a development professional who travels might need to access and update donor information from a mobile device. He would be hamstrung if his CRM system has an API for biographical data but not interaction history. He could retrieve and change a donor’s address and phone number(s) but not important information on the supporter’s favorite project. Although the “door chain” approach is more open than the “mail slot,” you’re still locked out of your own house and stuck reorganizing your space in the front yard.

3. The Open Door
Open source software — the pinnacle of the open movement — is like an open door. It means two things:

a. Software without license fees, significant upfront investment and onerous contracts.

b. Complete access to modify the software’s source code, provided you share your modifications with the user community.

Metaphorically, the “open door” is total freedom to enter the house and rearrange your furnishings, paint the walls, build an addition or remodel. You truly own and control your software. You can do things like create an automated business process to send recently acquired constituents an e-mail saying that in coming days, they’ll receive a welcome packet. You also can automate personalization of the welcome packet letters and other inserts as well as mail-merging and forwarding to your print/mail vendor. Consider how much staff time this saves and how effectively it engages supporters, fostering loyalty and driving donations.

With open CRM, you may opt to pay for support and maintenance to get updates, training and more. Also, you still need in-house expertise or services from the software vendor or a third-party consultant that you choose to configure and deploy the software and manipulate the code.

The ecosystems of partners and independent service providers for open-source solutions allow you to take advantage of competition to get the best service and price for your needs. And without having to change platforms, you can always switch service providers. Total cost of ownership likely will be much lower.

The “opening” of CRM and fundraising software for nonprofits is encouraging. With growing options, organizations should ask software vendors about their definition of “open,” and then decide which provides the right balance of cost, flexibility and service.

Randy McCabe is founder and CEO of MPower, a Dallas-based provider of software for CRM and fundraising for nonprofits.