Overtime, nonprofit professionals select various technology platforms to solve a challenge(s). These disparate, disconnected platforms introduce four challenges nonprofit organizations face today. Based upon primary feedback and secondary research, we compiled a list of these challenges:
#1: Unreliable Funding
Funding is a primary challenge for nonprofits. Increased competition from newly formed nonprofits and government cost cutting exacerbate this challenge. Currently, there are over 1.5 million registered nonprofits in the United States all competing for the same donors! Fewer donors mean fewer dollars of unreliable funding which limits a nonprofit's resources to fund operations and conduct mission-critical work.
#2: Donor Churn
According to Nonprofit PRO's 2019 Nonprofit Leadership Impact Study, 39% of those surveyed indicated that donor acquisition was their biggest nonprofit challenge. 25% reported that donor retention was their biggest challenge.
Without an accurate picture of your donors' motivations or campaign analytics, a nonprofit can lose donors and revenue. For example, one nonprofit recently shared with us they have 300,000 active donors and a 50% annual churn rate. That means they must replace 150,000 donors every year! This organization uses an obsolete financial system and a homegrown CRM. These technology systems don't integrate, leading to costly problems.
#3: Data Transparency
Donors, the government, and board members all demand accountability and accessibility to accurate data regarding ROI. Nonprofits can struggle with reliable data and navigating regulatory hurdles. With multiple, disconnected software systems, data is incomplete. Program officers fail to accurately measure impact and report to their stakeholders.
#4 Disparate Software
The final nonprofit challenge is disparate software. Siloed databases and the manual import and export of data lends itself to duplicate records and poor data hygiene. With disparate software, organizations fail to work cohesively toward common goals based upon real and reliable data.
So, how do nonprofits solve these challenges and become interconnected organizations? With CRM technology, leadership commitment, and an effective partner, nonprofits can overcome these challenges.
