E-Commerce Systems Benefit Nonprofits

The Internet not only is changing the way companies do business, but it also is radically changing the way fundraising organizations raise money.

Last year, U.S. donors opened their wallets to a record $190 billion – a $15.8 billion increase from 1998. Industry experts say the heightened use of online resources boosted these donations.

“Solicitations and contributions used to be sent only by mail, but increasingly they’re being transmitted in real time, via the Internet,” said Kevin Burt, fundraising project manager at Advanced Solutions International Inc., Austin, TX, a provider of software packages for nonprofits. He is also product director of ASI’s product iMIS Fund Raising.

According to the National Society of Fund Raising Executives, Alexandria, VA, the number of nonprofit organizations has nearly doubled in the past decade, and the work of the nonprofit sector now accounts for approximately 10 percent of the nation’s gross domestic product.

As this market continues to thrive, fundraisers are looking for better means of identifying and expanding their giving base, while at the same time making sure their methods are in sync with other business processes. And they are discovering the best way to do it is online.

Nonprofits can enable online donations on their Web servers for as little as $3,500, according to Burt. By accepting online donations, charities reduce the costs of re-entering the information into their databases.

“However, many nonprofit organizations have trouble with fundraising software systems that fail to meet all of their specific needs, making it difficult and time consuming for fundraisers to keep tabs on their major contributors and provide the capability for online donations,” Burt said.

Recently, the staff at the Sigma Chi Foundation, Evanston, IL, was frustrated with its rigid database system, which prevented it from implementing new fundraising ideas to increase annual giving.

The organization, which awards academic scholarships to fraternity brothers, has more than 250,000 members and donors worldwide, making it critical for the staff to track and communicate quickly, without sacrificing quality in processing donations.

“In the fundraising industry, timing is everything,” said Mark V. Anderson, president of the Sigma Chi Fraternity, a division of the Sigma Chi Foundation. “Whether sending out Christmas appeals or acknowledging our donors for their contributions, delivery time has a direct correlation to our success.”

The organization’s old, complex system caused the staff to spend more time tracking and updating the latest constituent information and less time sending out donation appeals and acknowledgments.

“We had to call a programmer for simple tasks like adding new data elements to create customized reports or update any of our business documents,” said Wade H. Overstreet, Sigma Chi’s director of development. “We knew with the increasing number of donors and members, we needed our new system to be extremely flexible and interact with our constituents in a whole new dimension.”

Sigma Chi’s solution was to implement an e-business fundraising system, iMIS Fund Raising, last year. Now the staff can streamline all aspects of its donor management operations, from contact management to event registration and donation processing – and personalized acknowledgments are processed within 24 hours of receipt.

In addition, the organization benefits from seamless integration of its back-end management systems (i.e., customer data, meeting records) with its front-end Web presence.

“We can stay better connected with our current and prospective members and donors,” said Anderson. “Members are able to quickly log on to Sigma Chi’s Web site, update and change their profile and contact information, search for other members, and register for Sigma Chi meetings and events.”

ASI’s Burt said the key for organizations looking to launch a business on the Web is to find a system that allows staff to spend less time handling and processing the donations and more time advancing the organization’s mission.

“Whether you are a small organization, raising financial support for a local cause, or an international not-for-profit approaching millions of donors for their help in a worldwide mission, look for a flexible system that can handle various types of gifts and ultimately make managing all your fundraising activities easy,” Burt said.

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