Choosing Fundraising Software: 7 Things to Consider and a Whack of Great Resources

Sumac Research. February, 2012. 
Co-author: Ye Adam Tian

“After people, data is your most important asset.” This is the first of 10 Nonprofit Technology Commandments outlined by John Kenyon, noted non-profit technology educator and strategist. And it’s true, isn’t it? Data is the key to a non-profits’ success, so you’ve got to take good care of it! But where do you house it? How do you choose the right software? Well this is a good place to start! Here are seven things to consider, along with some fundraising software reviews and resources to help you find the right match for your organization.

7 Things to Consider

Features. Before you even start looking for software, decide what you need the software to do and make a list. What data do you want it to hold? What features do you absolutely need? One of the mistakes in Robert Weiner’s 10 Common Mistakes in Selecting Donor Databases is buying more than you need. Robert Weiner is a popular non-profit technology consultant who has written for every major non-profit technology publication. Some of the other mistakes listed: randomly looking at demos, falling in love with cool features, and prioritizing price above everything else.

Customization. Another thing you may want to consider is how easy the software is to customize. Let’s face it, no two non-profits are alike. You have different programs and different terminology, and you don’t want to build your own database from scratch if you can avoid it, as Robert Weiner explains in Why Building Your Own Database Should Be Your Last Resort. So look for software with easy customization that allows you to tailor the database to your needs.

Usability. Also important to consider is usability. Because this fundraising software is going to be an integral part of your non-profit, you want it to be intuitive and easy to use. To determine just how user-friendly it is, have a look at some demo videos, get a personal demo and ask current users what they think of it.

Cost. Does the software fit into your budget, both now and in the future? In order to determine this, you have to take into account all of the costs associated with owning the software (the “total cost of ownership” or TCO). Direct costs include the software license itself, data conversion, installation, training, and support. Indirect costs include IT staff required to maintain the system, consultants needed, and upgrades to computers needed to run the software.

Security. Since you’re dealing with donor information, security must be a consideration. There are many question that you’ll want to ask. For example: Where is the data stored? Who has direct access and authority? How is the data shared between different people and departments? How is that process managed? Is there any risk of exposure of your data to the online community?

Ability to Get Data In & Out. This one is often overlooked, but it’s so important. You’ll often want to get data into your database – a list of names and addresses for instance. You’ll also want to get data out – for email marketing, accounting or event purposes. So, being able to easily import and export data is very important!

Technical Support. Finally, does the fundraising software come with quality customer support? Really what you want to know is whether you’ll be able to contact someone by phone or email when you really need help, and how quickly they will be able to assist you. You may also be interested in seeing what other kinds of support they offer: frequently asked questions on their website, documentation, training videos, etc.

Reviews

Don’t know where to start looking for fundraising software? Start here:

Low-Cost Fundraising Software Comparison:

Check out NTEN and Idealware’s Consumers Guide to Low Cost Donor Management Systems for an overview of 29 systems — what they do, recommendations for systems based on particular needs, and comparison charts.

Fundraising Software Listing & Reviews:

1. GetApp
2. Capterra
3. SoftScout

Donations

On a tight budget? TechSoup offers donations of fundraising software to registered non-profit organizations all around the world. Here’s a link to available donations in Canada and the United States.

This tip sheet was created by Sumac Research. Sumac is a complete nonprofit software solution that is free for small organizations and includes data conversion and installation for larger organizations. For more information, visit the Sumac website. 

Disclaimer

What’s the least expensive way to manage credit card processing?

Staff Post
By Heather Young 

I’ve been asked for advice on the least-expensive way to manage credit card processing.

Over the last number of years, sales by cash and cheque have dwindled, and the majority of earned revenues and individual donations are received by credit and debit cards and other forms of electronic transfer. In the past, processing fees applied only to a slice of our revenue base: now the “bite” can be significant.

On the plus side, the market is becoming more and more competitive. It’s not that long ago that we all had to have multiple bank accounts if we wanted to accept multiple payment methods, because some banks were allied with Visa and others with MasterCard. These days, numerous payment processors accept all major credit cards and funnel them to the bank of your choice

The array of payment methods continues to multiply. A quick Google search turned up the factoid that direct debit was invented only in 1984. More recently, arts organizations started wrangling the 24/7 payment universe as they put their box offices online. The next generation includes methods of accepting payments by smartphone – and the evolution will continue.

If you haven’t examined your payment processing costs (and methods) lately, maybe it’s time to shop around.

I put the question of inexpensive processing for Canadian non-profits to a number of LinkedIn groups, which provide a forum for sharing knowledge among colleagues internationally. The summary that you’re reading is therefore not the product of systematic research, but rather the contributions of a number of generous folk from Canada and the US who offered their recommendations, with a little fact-checking on my end.

I’m sure this list is far from exhaustive, but it’s a good starting point for comparison shopping. Readers will need to investigate which options are best suited to their needs.

The grid below captures an array of processors. It is followed by additional tips and recommendations from LinkedIn members. Thanks to them for these great ideas!

Name of Service	Operating in…	Website	Accepts (per website description)	Comments
5LINX Credit Card Processing / Pivotal Payments	Canada	http://everyswipecounts.5linx.com	Credit and debit cards	They promise the lowest discount rates in the industry.
Canada Helps	Canada	http://www.canadahelps.org	Can accept gifts of securities as well as credit cards.	A registered charity in their own right. Processes donations for other charities. Not the best rates, but you don’t have to establish your own accounts.
Chase Paymentech Canada	Canada	http://en.chasepaymentech.ca	Credit cards, debit cards, online payments.
Elavon Merchant Credit Card Processing	Canada	http://www.elavon.com/acquiring/costco-canada/main.aspx	MasterCard, Visa, AmEX, Discover, Debit	Offered through Costco.
FirstData Canada	Canada	http://www.firstdatacanada.ca	MasterCard, Visa, AmEx, Discover, Interac
Global Payment Systems	Canada	http://www.globalpaymentsinc.com/Canada/	Credit and debit cards.
IATS	Canada	http://www.iatspayments.com/english/about_IATS/index.html	Credit, debit, point of sale, QR codes and mobile giving.	Canadian company, focused on non-profits. A Ticketmaster subsidiary.
MOCA (Momentum Canada) Payment Systems	Canada	http://www.mocapayments.com	Visa, Mastercard, AmEx, Discover, chip and pin ATM cards.	Geared to small and mid-sized retailers in Canada.
Moneris	Canada	http://www.moneris.com	All major credit and debit cards and all major point of sale solutions.
Optimal Payments	Canada	http://www.optimalpayments.com	Card and non-card payments; chanels like IVR, MOTO and virtual terminal.	LinkedIn user reports no hidden fees; just one monthly charge and credit card fee.
PayPal	Canada	https://www.paypal.com	MasterCard, Visa, AmEx, Discover
Square	Canada	https://squareup.com	MasterCard, Visa	New in Canada, October 2012. Card reader attaches to iPhone or iPad. See YouTube demos.

And now a few comments from LinkedIn contributors:

Usually if you are a member of the local chamber of commerce or other similar association they have better rates than being on your own.

…Gwendoline Turpin, via Bookkeepers Club

You need to be careful when investigating payment processors. Many that we looked at offered an attractive rate but then hit you with additional fees and monthly charges that make it more expensive.

Ian Hayes, via Non-Profit Professionals Toronto

I have approximately 150 arts clients across Canada using our Theatre Manager software and the majority of these (95%+) are non-profits. We’ve built 3 PCI compliant payment gateway interfaces into the software. This allows our clients options on which merchant account provider they want to use. Predominantly, Canadian clients use either Global Payment Systems or Chase Paymentech for merchant accounts. Based on the feedback, I’ve received the fee structures are fairly comparable, but as in indicator, we’ve noticed a growing number of our clients switching to Paymentech. I’m not aware of any ‘special’ rates for non-profits. From what I’ve been told, each organization is vetted based on the merchant account provider’s risk criteria.

…Tod Wilson, via Performing Arts Administrators

I’ve been quite successful negotiating with other processors (Moneris and Global Payments) and obtaining rates equal to or better than those available through Costco. Not just for NPOs and Charities of which I have quite a few, but also for regular retail operations.

The applied rates vary quite a bit depending on the “type” of card – it’s not just about credit card vs. debit card, but affiliate, international, non-VISA/MC cards, etc.

Global Payments (at least) refers to these as Interchange Downgrade Fees (IDF) and produces two tables E5 (enhanced) and E1 (standard). Typical differences between these are between .1% and .5% depending on transaction. E1 is generally what most retailers receive. In addition, they will generally also provide free (or reduced-price) terminals.

The details of the fees are complex as there are 31 card categories. It depends on which your client receives most – and the average value, volume etc. of these.

…Don Hobsbawn, via Sage 50 Canadian Edition Sage Accountants Network Members

Don is absolutely correct. If you know the number of monthly transactions, monthly volume in $, average transaction amount and types of cards being used you can negotiate better rates from your Merchant Account Provider (MAP).

If you already have a merchant account you should compare the numbers at the end of your first year with the numbers forecast when the agreement was put in place. You may be able to renegotiate the contract for a better rate if the numbers are higher than the initial projections.

It also doesn’t hurt to let your existing MAP know that you are shopping around. That can motivate them to offer better rates, or even to match the best rate you can find.

To provide the most flexibility in payment types NFP’s & Charities can look at a Paypal Merchant Account that offers many donor / payment options through a website gateway.

https://merchant.paypal.com/ca/cgi-bin/?cmd=_render-content&content_ID=merchant/merchant_accounts

If the NFP / Charity is small, and don’t want to carry the monthly fees and equipment rental costs they can look at “Card Not Present” or online based systems that may offer reduced rates.

http://na.sage.com/sage-payment-solutions/products-services/sage-virtual-terminal

There are also fee based organizations that provide payment options for Registered Charities that may not have the infrastructure to provide payments, anonymous or recurring donations and tax receipts. They take a percentage of each donation, then EFT the balance to the Charity.

http://www.canadahelps.org/Info/5/37/ss#cost2

Before you recommend any of these options you’ll need to conduct a thorough assessment of the needs of the organization to help find the best fit! If you’d like to evaluate the different MAP’s there’s a guide on building a spreadsheet to do so at:

http://www.cardserviceinternational.com/merchant-account-evaluation.htm

…Dave Greene, via Sage 50 Canadian Edition Sage Accountants Network Members

(Note on Dave’s last suggestion: the link takes you to the website of FirstData, which of course wants you to use their service! However, they provide useful generic information on how to evaluate your options.)

Sage announces product name changes

Staff Post
By Anna Mathew

Sage, the makers of Simply Accounting, have announced several brand changes, including a new naming structure for their products.

What’s changing?

From the Sage website:

In 2012 the names of many of our core accounting and ERP lines, including those designed for nonprofits and the construction industry, are changing. These products will be identified with a numbering approach where higher numbers denote increasing levels of product capability or sophistication. Our product numbering sets include Sage One, Sage 50, Sage 100, Sage 300, and Sage 500.

However, these changes are more than in name alone. Each product family will offer integration to common business solutions such as CRM, Fixed Assets, HRMS, and Payroll. Sage Connected Services provide additional capabilities, including online payment processing, mobile access, and data security, while product support through Sage Business Care and Sage Advisor technology ensure you get the most from your Sage investment.

You can read more at the new Sage website.

CADAC is looking out for you

Staff Post 
by Jerry Smith

A new riff on an old thought:  Big Brother is, how shall I put it, . . . looking out for you, especially when it is in the shape of CADAC, a web based application dedicated to the collection, dissemination and analysis of financial and statistical information about Canadian arts organizations, and in essence a centre of expertise to help monitor the health of the arts sector across Canada.

Young Associates recently hosted representatives from CADAC in order to stay ahead of the curve and assist clients in taking the stress and confusion out of filing their financial and statistical data with CADAC.

Launched in December 2008, CADAC’s objectives include attempt to lighten the burden for arts organizations, improve the accountability and transparency of Canadian arts organizations, as well as developing a significantly enhanced database for research, planning and policy development. Young Associates’ work with clients during the initial ‘CADAC years’ has made us aware of the challenges around changing an organization’s financial data practices to meet CADAC requirements. But as we have all gotten more accustomed to the new CADAC environment, it has become apparent that storing financial data with CADAC has some great information benefits, including comparative analysis with other organizations in the sector.  Our session with CADAC revealed that pulling meaningful comparative reports from the system is becoming much easier.

As part of our ongoing leadership in developing resources to assist clients, Young Associates was particularly pleased to explore the key elements of CADAC’s reconciliation process and how it could apply to clients.  While no-one wants to be categorized as non-compliant and have their CADAC account red flagged to a funder, it most often simply means there is some data missing, and the staff at CADAC would like to assist you in getting back up to speed.

When in doubt, ask; here it is better to ask for permission than forgiveness!

Ten Tips for Making Clear Connections Between your Database and Financial Software

What is a database? A database is a means for organizing, storing, managing, and retrieving information. Your fundraising, box office, sales and accounting software are all considered to be types of database software.

Bookkeeping packages (e.g. QuickBooks, Simply Accounting) spreadsheets (e.g. Microsoft Excel) and database software (e.g. Sumac) are electronic tools for delivering a narrative on your operations and programs.  It is essential that you pay attention to the stories they tell;  it is equally important that these different sources communicate effectively with each other in order to deliver a  meaningful tale.

1. Who’s doing the talking? It is important to be consistent when communicating financial information. Decide which system will do the talking and which will do the listening. Having information flow in one direction will reduce errors, confusion, or missed transactions. Multiple databases in a single organization should be used simultaneously and reconciled to each other on a regular basis. Integrating your databases into your daily routine will help to support sound management.
2. Speaking the same language. When communicating financial information from one system to another it is important that the allocation is the same in both systems. For example, if you are tracking donations that are associated with a certain project or event in your database software, make sure you make the same allocation in your accounting software. This will help in the future when pulling reports from either system or doing reconciliations.
3. Doing a little bit at a time. Errors more often happen when you try to condense information. While it might be more efficient to do weekly reports, errors may occur if financial information provided by the database software doesn’t match what is in the bank. For example, if you are doing daily credit card batches, than weekly reports may not catch the information you need. Batch totals and generated reports need to have the same time parameters. Keep things simple and work on a consistent basis. While it might take a little longer initially, it will make it easier to identify errors, saving time in the long run.
4. Take time for the details. It might be easier to group contact information together when going from one system to another, but it can contribute to errors. Make sure whatever information you are tracking in one system is communicated to the other system. For example, record individual names and donation amounts rather than a batch total.
5. Keep an eye on things. Try doing regular reconciliations and comparisons between your database software and financial software. Tracking as you go will make doing a year-end reconciliation go smoothly, and will help you know where you are in regards to budget vs. actual.
6. Remember what you did. You are only as good as your information. (Garbage In/Garbage Out). If your database software gives you the option to record communications, such as emails, memos, or notes, try using the function with regards to financial transactions. If you have special notes relating to a transaction, record it in the communication notes for that contact for easy reference.  Storing important information pertaining to donors or other contacts will contribute to organizational history and make staff transitions easier.
7. Don’t leave it to the last minute. We are often leaving grant reports and year-end audits until the last minute, when it can be a headache to go back through months of activity to get the information needed for the report. Track as you go in both the database software and financial software. Doing it in both will act as a double check to make sure the numbers are correct, as well as take some of the stress of that last minute report.
8. It’s okay to anticipate. It is common to anticipate transactions, especially those reflecting revenues (eg. Held tickets, pledges, and confirmed grants). Make sure that if you are entering an anticipated transaction into your database software as a receivable, that you communicate that information to the financial software. Not doing so could result in double counting the revenue when the money does actually arrive. Be sure to compare receivables list from all databases on a regular basis.
9. Break it down. Most database software packages will allow you to break out details on transactions. Breaking out gross amounts, taxes, and any service fees applicable will help eliminate errors or the need for further calculation when entering data into the financial software. Make sure you have taken full advantage of all the setup features to automate standard charges (eg. service charges and sales taxes).
10. Where it all belongs. Similar to your financial income statement where revenues are tracked on a yearly basis, it is important to do the same in your database. Most database software doesn’t have the concept of deferred revenue, so you may have to indicate what year funds are allocated to. For example, allocating things like donations, grants, and ticket sales to your 2009-2010 season will make reconciling and reporting easier. It will also help in the budgeting process when you are able to pull up reports with precise data pertaining to certain years.

This tip sheet was created by Samantha Zimmerman of Young Associates. Founded in 1993, Young Associates provides bookkeeping and financial management services in the charitable sector, focused on arts and culture. Young Associates also provides consulting services in the areas of data management, business planning and strategic planning. Heather Young published Finance for the Arts in Canada (2005), a textbook and self-study guide on accounting and financial management for not-for-profit arts organizations.

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