Nonprofit CRM Software Market Share Grows as Charities Turn to Tech Amid Dip in Donors

Photo by Julia M Cameron

Customer relationship management or CRM software is a top SaaS product among businesses. But it’s not only valuable to for-profit companies. Nonprofit organizations (NPO) and charities are also increasingly relying on the capabilities of CRM platforms. Proof of this is the growth of the nonprofit CRM market share.

Analysts from Vantage Market Research estimate that the global nonprofit CRM software market will grow at a CAGR of 3.6% from 2022 to 2028 and reach $927.3 million by the end of the forecast period. The market was valued at $726 Million in 2021. The report cites the increasing adoption of CRM for nonprofits as the key driving factor for market growth.

SaaS for nonprofits can include a variety of apps, from accounting software for nonprofits to LMS platforms for training. CRM is particularly beneficial as it includes features related to project management, marketing, data collection, and analytics. All these features combined in a centralized platform make it easy for NPOs to improve donor management—something crucial amid the declining number of donors coming from the general population.

Giving Has Become Top-Heavy

Donors are the lifeblood of nonprofit organizations. A donor’s generosity supports an organization’s mission. However, Gilded Giving 2022, revealed that charities are receiving shrinking amounts of revenue from lower- and middle-income donors. The report, conducted by the Institute of Policy Studies, also showed that more nonprofits are relying on donations from a small segment of ultrawealthy donors.

The good news is that the money going to charity hasn’t declined. Based on Giving USA’s 2022 report on philanthropy for the year 2021, “individuals, bequests, foundations and corporations gave an estimated $484.85 billion to U.S. charities in 2021.” But what experts from the Institute of Policy Studies point out is that the number of American households giving to charity from 2000 to 2018 has dropped from 66% to under 50%.

The decline in donors from the general population stems from factors such as declining religious affiliations, economic insecurity, employment, and homeownership rates. But notably, groups studying philanthropy have also cited eroding trust in institutions, including NPOs, as a factor in the changing philanthropic environment.

Building Trust and Awareness Using CRM for Nonprofits

Meaningful relationships based on trust with existing and potential donors could remedy poor donor retention and stagnation. Though NPOs don’t have traditional sales activities and customers like for-profit businesses, they can still use the core functions of CRM software to develop deep donor relationships.

For example, the omnichannel feature in CRM platforms helps improve marketing and communication with donors. Regular marketing and contact are important for NPOs to keep them top of mind of their donors. These donors can be on various digital devices; thus producing multiple touchpoints for messaging.

To efficiently manage communication and remain consistent with donors, nonprofits can implement an omnichannel marketing strategy. Omnichannel features in a CRM system consolidate data on supporters from every touchpoint, which can be used in segmentation, integrated campaigns, and making agile adjustments based on a recent interaction with a supporter. As a result, NPOs can deliver integrated, coherent messaging for their cause, which increases their integrity and the audience’s trust.

However, the real power of omnichannel features lies in personalized messaging. Data collected in a unified CRM platform allows nonprofits to send messages tailored to each donor. As nonprofit professionals believe, personalized messaging can deepen connections with donors and make it more natural and easier for them to become meaningfully engaged in an NPO’s mission.

Data stored in a CRM platform is also vital for effective donor management. NPOs need data to paint a clearer picture of their donor base. For donor acquisition, having information on potential donors can help nonprofits discover donor motivations and interests and if these align with their own mission.

On the other hand, data can inform donor retention efforts. Information on donor history like donations made, geographic region, survey responses, etc., can be filtered to create highly targeted email campaigns. Nonprofits can also use them to identify regular donors and send small gifts or thank them for their generosity. These actions can make donors feel valued and motivate them to continue supporting NPO’s cause.