Charitable Groups Profit From CRM

Competition is nothing new for charitable groups, but in the past year many not-for-profit groups have found themselves vying for donations in an economy that has consumers and corporations watching every penny. "We are competing for customers and need to keep winning customers using limited resources," says Jenny Mirkin, director of e-marketing for the United Way of Massachusetts Bay, which raised about $55 million in 2001. Mirkin says 80 to 90 percent of that came last fall from a single promotional push called Workplace. The United Way is a national nonprofit comprising about 1,400 community-based United Way organizations. Each is independent, separately incorporated, and governed by local volunteers. Consequently, the groups often use disparate systems and don't share information. This is where CRM comes in. United Way is now working with Kowal Associates, a contact center consulting firm in Boston, to create and implement a new system that will allow individuals to make donations using their touch-tone telephones. Users to follow a menu system to specify whether their donations will be used by their local United Way chapter or by the national United Way organization. This automated pledge system provides donors with another channel to make donations in addition to the traditional pledge card format and the charity's Web site, Mirkin says. Automating the system improves customer service, and streamlines the donation process by allowing the United Way to eliminate data entry and download critical pledge data directly to its database. To implement the new process Kowal will assist the United Way in identifying and selecting an outsourced call-handling partner with the required capacity and technical resources, according to Marian Heard, president and chief executive officer of United Way of Massachusetts Bay. United Way is also looking for ways to communicate with other untapped markets for donors, Mirkin says. "We need to be raising money all year. We need to think more about customer acquisition and customer retention. It's about keeping people educated about how our money is spent and better focusing on the outcome, and CRM helps us do that," she says. But CRM vendors may face competition from the traditional fund-raising software developers, which are racing to add more CRM-like functionality to retain market share, according to Jack Sumner, a principle with North Highland Co., a consulting firm in Atlanta. Sumner, who has worked as a consultant to the American Cancer Society, the American Heart Association, the Boy Scouts, and CARE, says nonprofits are a great potential market, but are currently underserved. Most CRM vendors don't have a specific nonprofit vertical version of their product, but rather a generic public sector version. "All of these nonprofits are like for-profit business except they are not selling goods or services, so it becomes a little more complicated as to who their customers are," Sumner says. Like many businesses, CRM for nonprofits is about cost-cutting, justifying the costs of the system, and showing ROI quickly. However, because of the decentralized nature of most nonprofits, it is a huge challenge to get buy-in and consensus from all the parties involved, Sumner says. The American Heart Association, a national voluntary health agency, is one of the largest nonprofit organizations in the United States, with 22.5 million volunteers nationwide. In the past five years the AHA has provided more than $1 billion to fund research, educate professionals in the field, and provide lectures in schools. The organization sends 13.2 million renewal mailings and 63 million acquisition mailings six times a year. The AHA uses software from Siebel to implement an integrated customer management system that will provide a 360-degree view of each individual that interacts with the organization. The CRM system is delivering benefits for AHA both internally and externally. Employees can deliver better customer service by seeing a comprehensive history of all interactions with each customer. The customer is asked to divulge personal information only once across the entire organization, thus avoiding the frustration of repeating information for each event or process. Those customers identified as having multiple points of involvement or who have historically made large donations receive priority attention and service. "Customers expect you to know what's going on regardless of what channel they are interacting with you," says Michael Wilson, AHA's executive vice president, technology and customer strategies. This ability to target opportunities with higher success rates has enhanced the organization's revenue, and has thus enabled it to more effectively achieve its fund-raising, research, and education goals. By including important data about the propensity to donate and analyzing that data, AHA has been able to pump up its donor retention rate from 45 percent to 50 percent.