6 Costs of Purchasing Fundraising Software

As you narrow your choices on which product and vendor to select, understanding the total cost of implementing a donor management system is critical to your decision. There are six general cost areas involved when you select a system. Following is a brief outline of each cost area.

As you examine each vendor, make sure you understand what you are paying for and what you get in return. Not all vendors offer the same services or pricing.

Fundraising Software

Donor management - This is the core product that will help you segment your constituents, aid in the solicitation process, enter gifts, acknowledge your donors, create details reports and perform trend analysis.

Additional Fundraising Modules - Some companies offer additional modules that provide advanced capabilities not found in core systems. Some examples include: special event management, membership, volunteer, alumni, bridges to accounting systems, etc.

Third-party Fundraising Products - Most fundraising companies require you to have a word processing application to perform mail merges. The most common word processing applications supported are Microsoft Word or WordPerfect. In addition to word processing, you may also need other applications, such as spreadsheets, specialized report writers (example: Crystal Reports), email programs and so forth.

Data conversion

It is likely that you will have an existing database of donors and prospects that could be converted into your new software. The list may consist of just names and addresses or it could be much more complicated, including giving histories, affiliations, multiple addresses per donor, relationship (who they know) data and more. Most vendors offer three main choices. They are:

Vendor converts your data - This option is likely if you have a complicated database. These are normally quoted on a case-by-case basis and billed on the amount of programming hours it will require to write a utility that moves the data from the old system into the new system. Companies should provide estimates of the expected cost before any work begins.

Convert the data yourself - Many companies offer 'do-it-yourself' data conversion tools. They vary on the complexity of data they can transfer from very simple to moderately complicated. The price varies; some vendors offer free tools, others charge based on the complexity of the data the tool can import.

Re-keying your data - This is the least desirable option to convert data in terms of time. The previous two options can take only day(s) to transfer the data. Re-keying thousands of records can take weeks or months, depending on how much manpower you can assign to the task. This option makes sense only if you do not have many records (under 1,000), or if your existing data is highly inconsistent and doesn't lend itself to being converted electronically.

Training

You can buy the best system in the world, but without proper training, your staff will struggle and ultimately the system will go under utilized or will not be used at all. Invest in training your staff when you first purchase the system and budget for training in each and every year. If you have money in your budget each year it will allow you to train existing users in the more sophisticated features of the system or train new staff members as they join your organization.

There are several types of training being offered today. The most common ones are: on-site, classroom, webbased, telephone, video, and self-paced tutorials. Each of these types of training offer different advantages. Some are less expensive, but you may be part of a big group. Some are more expensive, but can be customized to your needs. One factor that plays into your consideration is how many staff need to be trained. For example - if only one person needs to be trained, classroom or telephone training is a good option. But if you have 6+ people who need to be trained, on-site training may be your best option.

The bottom line is you need to talk to each vendor, find out the different training options they offer, the associated costs, and determine which option best meets your training needs.

Annual support plans

Telephone technical support - This allows you access to the vendor's technical support desk. Some critical questions to ask when you are evaluating vendors: Is 800 toll-free support offered? Can you make unlimited calls or are there limits? What is the support department's hours? Do those hours match when you are at work? What percentage of calls are taken and answered when you call in? If you need to wait for an answer, how long is that wait? (1 hour, 3 hours, 1 day?) How knowledgeable is the support staff?

(Suggestion: The best way to find out the answers to these questions is to call the support departments directly. Tell them you are considering purchasing the software and you have a few questions. Then ask your questions and see how they are handled. This is your best way of finding out the quality and availability of the technical support staff you will be working with.)

Product updates - Selecting a vendor that is always updating their product is critical. As technology advances, you want a product that keeps pace with those advances. Most vendors include product updates as part of their Annual Support Plan. However, some vendors charge for updates separately. Make sure you verify what you are getting for your money.

Other services - There can be a myriad of other services and benefits you get with your Annual Support Plan. They can be: user-based newsletters, email support, web-based support, web-based discussion groups, user groups, user conferences (normally an additional fee), etc. If some of these are important to you, verify the vendor you are selecting offers them.

Hardware

In general, donor management systems use state of the art database and programming tools. Because of this, the hardware required to effectively use these systems is at the medium, to upper end of desktop computers. Once you have selected the software that fits your needs, talk to the vendor and ask what they recommend for hardware. In addition to the desktop computers for each individual user, you may also need to upgrade your network, add hard drive storage, or tape backup units to prevent data loss. Hardware costs must be factored into your software purchase decision.

Other expenses

Based upon the type of training you purchase, your total cost may include additional expenses. For example, if you buy on-site training there are normally the costs associated with bringing the trainer to you (airfare, hotel, rental car, meals, etc). As you work with the vendor you have selected, make sure you talk about all the costs to implement the system. It is much better to know upfront, rather than being surprised by unknown expenses.

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