CRM remains used to house constituent data in a single place for cultivating, engaging and expanding constituent communities (Mouyabi, 2015). According to Buttle, (2013) CRM involves using the tool for providing the solution for management of relationships by nonprofit organizations and educational institutions. On one hand, the CRM usage in businesses evolved fast, whereas CRM in nonprofit organizations evolved slowly.
Interestingly, CRM was first implemented by nonprofit organizations to efficiently keep relationships with donor and potential donors. However, profit-making large scale to small scale businesses started implementing CRM with an increased need for building relations with customers.
Nonprofit organizations use a variety of disparate applications and spreadsheets for managing their clientele. They, however, lack tools that remain affordable and efficient when compared to the CRM tools used by businesses (Grattan, 2012). Ultimately this doesn’t just impair operational efficiency, it also undermines the ability to make the social impact that nonprofit organizations aspire to. However, many nonprofit organizations nowadays make use of CRM software to optimize their donor data. It has helped maintain better donor relationships, more competent outreach and strategies related to fundraising (Buttle, 2013). International nonprofit organizations such as Amnesty, Human Rights Watch and Water Aid use different CRM to maintain relations with the donors. CRM provides a 360-degree image of the donors to the nonprofit organizations in order to help them in knowing their supporters well (Grattan, 2012).
Evolution of CRM in nonprofit organizations
Customer relationship management was first modelled specifically for non-profit organizations. Its primary focus was managing donations and donors list and tracking potential donors. It started with the model of multiple constituencies as indicated by Whetton in 1978 and later developed by Connolly and colleagues in 1980 (Huang, 2018). This model comprises of interlinked functions of the actual beneficiaries, donors, volunteers, board members and employees. In further years, a commitment-trust model of Morgan and Hunt in 1994 used it for building the two most important factors of CRM, trust and relationship (Mihanovic & Rosan, 2014).
The methods of database management for CRM comprised of storing biographical data and gift tracking using MS Excel and Outlook. However, in recent times, Salesforce integrated the needs of constituent relationship management for nonprofit organizations (Salesforce, 2015). In addition, nonprofit organizations remain constantly presented with opportunities to connect with their constituents including their partners, volunteers, advocates, donors, the beneficiaries of the mission and others. Some of the nonprofit organizations took advantage of this situation which provided a rich engagement experience with the constituents seeking to connect, while other organizations could not take advantage of this opportunity which led to the loss of connection, money, goodwill and loss of motivation to do more with the organization.
Thus, there were changes made in the technology landscape starting during 2008 and improvement in the engagement of these organizations with their constituents which converged to incorporate new opportunities which met the needs of contemporary nonprofits by the means of Constituent Relationship Management (Mihanovic & Rosan, 2014). Various tools made for nonprofit organizations were used to develop CRM applications such as:
- Salesforce plus NPSP developed in 2014,
- Cause view from Breakeven in 2008,
- Member Nation and Donor Nation from Fontana in 2004 and,
- Net Suite from Oracle developed in 2016.
Application of CRM tools by nonprofit organizations
In nonprofit organizations, the CRM tools comprised of functions like:
- finance and accounting,
- expense management,
- financial planning,
- reporting and analytics,
- global business management and,
- inventory management (Tabaku, 2014).
CRM is used to improve these services by deepening constituent engagement and have a greater ability to deliver their programs more broadly. Nonprofit organizations use these tools by storing data on prospective donors so that the information is ready at each interaction.
In addition, the tools have predetermined metrics that quickly provides visibility and forecasting. The tools help the organization to route leads efficiently amongst different stakeholders, information security and targeting potential donors. Some of the tools like Salesforce also allow effective communication and automation of information generated from a large pool of donor data. Salesforce tool boasts in helping the organizations by gathering information on:
- Stakeholder history.
- Current stakeholder preferences.
- Stakeholder social media presence.
- Past interactions with a stakeholder.
- Stakeholder infrastructure details.
Differentiation between constituent relationship management and customer relationship management
In terms of business, Customer Relationship Management systems remain used for the purpose of optimizing the sales by focusing its resources on only those prospects that have higher intent to buy (Huang, 2018). They also help augment customer satisfaction and lower the operating costs of the organization by providing self-service options to the customers. For the purpose of meeting this objective, CRM helps in tracking, automating, and personalizing different aspects of client interactions on different mediums such as website, telephone, in-store and social media.
In a similar vein, the use of Customer Relationship Management systems has been tailor-made to meet the needs by introducing Constituent Relationship Management systems (Buttle, 2013). In this case, donations remain treated as similar to sales. There remain no differences in the terminology and processes of both. They are mainly used for the purpose of accounting for pledges, recurring donations, soft credit donations, and accounting for the part of product prices that qualify for charitable tax receipts (Hsu et al., 2012). Thus, Constituent Relationship Management goes beyond the financial goals and measurements only as it takes into consideration the communication and its influence.
- Buttle, F. 2013. Customer Relationship Management Concepts and Technologies. 2nd edn. Burlington: Elsevier. doi: 10.1017/CBO9781107415324.004.
- Grattan, K. E. (2012). CRM implementation in nonprofits: an analysis of the success factors.
- Huang, H. (2018). The Use of Customer Relationship Management in Small Arts Organization. Drexel University.
- Mihanovic, Z., & Rosan, S. (2014). Developing a strategy of relations and cooperation of non-profit organizations with the local community. European Scientific Journal, ESJ, 10(7).
- Mouyabi, M. (2015). The Reinvention of the Constituent Relationship Management (CRM) System in Higher Education in Africa. International Journal on Communications, 4.
- Salesforce. (2015). Become a connected nonprofit with the power of Salesforce. Available at: https://www.salesforce.org/nonprofit/ (accessed on 21-4-2019).
- Tabaku, E. (2014). An Overview of Marketing Means used by Non-Profit Organizations: A Detailed Overview of NPOs Operating in the District of Elbasan. Journal of Marketing & Management, 5(1).
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