Choosing a donor database

This guide is for small charities keeping donors in a spreadsheet, a stack of index cards or someone's email contacts, and wondering whether it's time for something better. After reading, you'll know the signs that you've outgrown a spreadsheet, what a donor database does, which features you need, the cost questions to ask, and how to move your records over without losing anything.

We don't recommend particular products. The right tool depends on your size, your budget and who will use it.

When a spreadsheet stops being enough

A spreadsheet is a fine place to start. Watch for these signs that you've outgrown it:

• There are several versions of the donor list, and nobody's sure which is current.
• Sending thank-you letters or year-end summaries takes a whole weekend.
• You can't quickly answer "who gave last year but not this year?"
• Duplicates keep appearing: the same donor under two spellings.
• You're worried about who has a copy of donor details on a personal laptop.

TechSoup, a nonprofit technology organization, makes the same case: a purpose-built system gives you one "single source of truth" instead of copies drifting apart, tighter control over who sees what, and less risk of losing data to a crash or an accidental deletion.

What a donor database does

You'll hear several names. CRM (constituent or customer relationship management) is the general term for software that tracks contacts and every interaction with them. A donor management system is, in TechSoup's words, "essentially a donation-specific CRM," built around gifts, pledges and fundraising. A general CRM covers more, such as marketing, but may have fewer fundraising features. Decide by what you need most.

For a small charity, the core jobs are:

• Gift records. Every gift linked to a person or organization: date, amount, method, any restriction (such as "for the food pantry") and the campaign or appeal it came from.
• Acknowledgments. Producing thank-you letters and receipts with the right wording, and recording that each one went out. A donor can't deduct any single gift of $250 or more without a written acknowledgment from you, with specific content; see thanking donors the way the IRS requires.
• Segments. Pulling lists such as monthly donors, lapsed donors, volunteers who also give, or everyone who came to the spring event, so you can send the right message to each group.
• Year-end summaries. IRS Publication 1771 allows one acknowledgment, such as an annual summary, to cover several gifts if it includes the required information. A good database can produce these in an afternoon.

Must-have and nice-to-have features

Start from the must-have column. A tool full of extras that can't produce a correct receipt isn't right for you.

What data to keep, and what not to

Keep what you need to thank donors, meet IRS requirements and build relationships:

• name, address, email and phone
• each gift's date, amount and method, and for noncash gifts a description (never a value you set; that's the donor's job)
• whether you gave anything in return, and its estimated value
• restrictions, campaign and source
• communication preferences, including anyone who has asked not to be contacted
• a record of each acknowledgment sent

Publication 1771 notes that an acknowledgment doesn't need the donor's Social Security number, so don't collect it (donated vehicles, boats and airplanes worth over $500 follow separate rules). Don't keep full card or bank numbers in your database either; let your payment processor hold those. Be careful with notes: write nothing about a donor's health, family or finances that you'd be uncomfortable reading aloud to them. Our guide to data privacy basics covers consent, access and how long to keep records.

Getting your data out: portability

Before you sign up, find out how you'd leave. Ask:

• Can we export everything (people, gifts, notes, attachments) at any time, without paying extra?
• In what format? CSV files open in almost any tool.
• Do gift records export linked to the right donor, or as a separate list we'd have to match by hand?
• What happens to our data if we stop paying, or the company closes? How long do we have to get it out?

Run a test export during your free trial. If it's hard now, it'll be harder later.

Can your volunteers use it?

Many small charities run on volunteers who log in once a month, often on a phone. During a trial, ask two of them to:

• enter a gift and print its thank-you letter
• find a donor and add a note
• pull a list of everyone who gave last year

Watch where they get stuck. Check that it works with a keyboard and screen reader, with readable text and contrast. A tool your team avoids is worse than a good spreadsheet.

Questions to ask about total cost

We don't quote prices, because they change often. Check each vendor's current nonprofit pricing page, and ask:

• What does the plan include, and what costs extra (users, contacts, emails, modules)?
• What happens to the price when we pass the next contact or user limit?
• Is there a nonprofit discount or a free tier, and what are its limits? Our guide to free and discounted tech lists programs worth checking.
• Are there fees on donations processed through the tool, on top of card fees?
• Is there a setup or data import fee? Is training included?
• Can we cancel without a penalty, and how much notice comes before price increases?

Count your own time too: setup, cleaning data, training volunteers and keeping it up to date.

Moving your data over

1. Clean first. Merge duplicates, fix spelling, split full names into first and last, and standardize addresses in your spreadsheet before importing.
2. Decide the fields. Map each spreadsheet column to a field in the new tool. Agree on standard values for things like gift method and fund.
3. Test with a small batch. Import 20 records, check them, and fix the mapping before importing everything.
4. Import gift history linked to the right people, then check totals against your books for at least one year.
5. Set up templates for thank-you letters and year-end summaries, and test them.
6. Train the team with short written steps for the three or four tasks they do most.
7. Keep the old spreadsheet read-only and archived, and stop editing it on a set date.

Choosing checklist

• We've listed our must-have features and who will use the tool
• We've tested at least two options with real volunteers
• We've produced a correct thank-you letter and year-end summary in the trial
• We've run a full test export and can read it
• We know the full cost, including fees and price limits
• The account belongs to the charity, with two administrators
• We've decided what data we won't collect
• Our data is cleaned and mapped before import

General information, not legal, tax or financial advice. Rules change and every situation is different, so check the official sources and talk to a qualified professional before you act.