Building the Business Case for Nonprofit CRM - Heller Consulting

Building the Business Case for Nonprofit CRM

If you’re like many nonprofit professionals, you might have found that your nonprofit’s technology foundation didn’t hold up well under the stress test of the COVID-19 pandemic and the fallout that followed. You might also have found that as your organization evolves and adapts to changing world conditions, your data management systems continue to limit your ability to communicate effectively with constituents and donors.

In an age when consumers have come to expect a highly personalized, customer-centric experience, these are problems. Technology that is outdated or hasn’t kept up with your organization can hold you back from providing a great donor experience, working more efficiently, and ultimately raising more dollars.

You might recognize that it’s time for a new customer relationship management (CRM) system. In fact, many organizations today are changing from older systems to those from emerging nonprofit CRM leaders such as Salesforce and Microsoft while some organizations are evaluating other alternatives for fundraising and program management.

Read more about the CRM options out there for organizations like yours in our free resource: At the Crossroads of Nonprofit Digital Transformation 

But even if you know it’s time for new technology, one thing stands between you and the CRM system you need to move forward: convincing your leadership, executive director, or board of directors to make a change. This can be especially challenging as many nonprofits are focused more than ever on budget and return on investment (ROI) in our post-COVID world.

Here are some techniques to get you started:

Paint a picture of the CRM vision

Helping leadership understand it’s time for new technology requires more than simply listing things you can’t do with the current system. Instead, one of the best ways to make a compelling case is to paint a picture of the potential benefits a new CRM solution can provide.

Here are three key ways CRM can help transform a nonprofit organization:

  • Deliver on the mission more efficiently and effectively by streamlining operations so the organization’s staff can focus more on fundraising and mission-focused initiatives, and less on time-consuming processes.
  • Raise more money through effective donor management, more targeted and personalized communications, and better reporting that informs data-driven decisions.
  • Step up the way the organization tracks, manages, and communicates with donors, volunteers, and other supporters.

Also, if your organization has struggled to adapt to changing circumstances related to the COVID-19 pandemic, be sure to mention how updating your technology can help you be more resilient in the face of future needs, such as:

  • working from home
  • changing operational processes
  • adding or modifying programs to meet a growing demand for services
  • scaling up fundraising
  • engaging with donors and other constituents in new ways

Talk about return on investment for your Nonprofit CRM

Your executive director and board need to ensure a technology investment will make an impact to the organization that also justifies the expense. So, to translate the CRM vision into language that hits home with leadership, it’s important to talk about the vision in terms of ROI.

A simple ROI formula is a helpful framework for this discussion:

ROI = ((Total Benefit – Total Cost) / Total Cost) x 100

Let’s break down the formula.

  • ROI — ROI is a way to express the efficiency of an investment. It is expressed as a percentage, which is why the number in the ROI formula is multiplied by 100 (to convert the number into a percentage).ROI must be greater than 0% to be financially viable. A zero percent ROI means the financial benefit of a change to a new CRM system equals the cost of the change. A 100% ROI means that for every dollar invested in a CRM change, the organization would receive $2.00 in cost savings or additional fundraising. A negative ROI means that the costs of change are greater than the financial benefits to the organization.It’s important to decide on a time period for the ROI. For example, the ROI for a CRM change should not be looked at for a single year because the expectation is that the change will carry the organization into the future. At the same time, the CRM change would not necessarily provide ROI forever. A good rule of thumb to look at costs and benefits is five to 10 years.
  • Total Benefit — Total Benefit is made up of two numbers added together: increased fundraising and cost savings.
    • Increased fundraising can be estimated based on multiple factors, including better use of data, improved donor management, impact on grant and major donor management, and improved communications. These benefits of CRM can have a dramatic impact on the organization’s ability to raise more money.Be sure to calculate the impact that compounds over a five to 10-year period. For example, if you believe increased segmentation can boost fundraising by 5% each year, that means year number 10 benefits from all those 5% increases from each previous year. That’s much more than 5% of your current fundraising!
    • Cost savings can be calculated based on CRM benefits such as reduction in staff hours needed to complete various tasks, reduction in hardware needed to run technology, and reduced training needs for easier-to-use technology.Another important aspect of cost savings is costs associated with staying on outdated technology. These costs can add up, as upgrading and maintaining aging technology requires dollars and IT resources. Outdated technology can also result in lost fundraising over time due to the inability to drive and process donations effectively, and even due to donor concerns over data security.While any technology change should be made with a sound financial grasp of costs and benefits, one final, but important, aspect of cost savings is the organization’s mission. It’s important to remember that improving mission delivery can be a part of the transformation CRM helps bring about, even though the cost savings associated with those benefits may be harder to quantify. Many organizations use an impact measurement strategy to help articulate these benefits.
  • Total Cost — The costs of turning a CRM vision into reality can vary greatly. The best way to minimize costs and ensure a smooth implementation that meets expectations is to clearly articulate your CRM vision, list your organization’s needs and goals, and find the right product to meet your organization’s requirements.Costs can be thought of in two categories: one-time expenses and ongoing costs. One-time expenses are typically the costs associated with selecting, configuring, and training staff for the first time on a new system. Ongoing costs include any hardware required and the licensing costs of cloud-based software, or Software-as-a-Service.It’s often valuable to work with a third-party consultant who specializes in nonprofit CRM planning and implementation to help ensure your CRM system delivers on your vision and becomes an invaluable tool in supporting fundraising and mission delivery.

Take the next step for your Nonprofit CRM

Building the business case for new technology starts early — before you begin defining functional requirements and researching (or deciding on) potential CRM systems. Doing this up-front work will help you make the case for CRM and overcome potential objections, such as cost. It also will make the implementation process go smoothly and effectively.

Learn more about how much a CRM change will cost and how to build the business case for the investment: Download the Nonprofit CRM Pricing Toolkit

Find out how Heller Consulting can help you create a clear vision and strategy for your CRM system:

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About the Author

Jett Winders
Jett works collaboratively with nonprofits to map their business needs to CRM tools and functionality so that organizations can deliver their missions more effectively and raise money more efficiently.  With more than 15 years of fundraising experience, Jett has had... Read More

A Business Case for a New Nonprofit CRM


We have seen organizations recoup the upfront CRM investment through long-term cost savings, revenue growth made possible by improvements to the systems, and improved staff productivity. This guide will get you started.

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