How to build a competent charity CRM business case

In the early days, a system of Excel spreadsheets may have done the job. But as your income grows, manual systems soon become laborious, time-consuming and inaccurate. The good news is that when it comes to contact management, there are a number of dedicated charity CRM solutions that are there to help your team do more.

Maybe you know exactly which one would work for you. Maybe you’re just starting out. It doesn’t matter what stage of the journey you are at. In this article, we provide a framework to help you build a business case for investment, and show your Board and senior team why a charity CRM isn’t just a nice to have, it’s a ‘must-have’.

PART 1: Why should you build a charity CRM business case?

When you work in fundraising, the need to invest in a charity CRM may seem obvious. Especially if you’re the one tasked with navigating multiple spreadsheets, or manually logging donations into a dated piece of sales software.

But we live in a world where service demand is rising, and the funds organisations need to deliver are falling. The whole sector is feeling the pressure, and many organisations are finding it difficult to meet their core funding needs. It is a reality that leaves little spare for administrative spend, and that means you’re going to have to work harder than ever to convince people that a charity CRM is a sound and profitable investment.  

That’s where your business case comes in. This is your chance to advocate your cause, and show people the value a charity CRM will bring. To do this, you need to highlight the shortcomings and risks of continuing your current system, and present the benefits and potential return of investing in a new one.

It might sound daunting. But you’re fundraisers. You make a case for support to your donors every day. If you understand the need and you’re clear on the cost, solution and impact, you’ve got all the foundations required to make that all-important “ask”.  

PART 2: What should you consider when building a charity CRM business case?

Before you start putting pen to paper, it’s important to make sure you’ve done your research and considered all the different angles that will help you make your case.

A common error that CRM champions make is to focus much of their energy explaining the technological aspects of a CRM system over the desirable outcomes it can help to support. The reality is that your senior stakeholders are more interested in the 'why' rather that the 'what'. In other words, outlining the solution of a CRM will resonate far more with senior managers, therefore making it more likely for the investment to be signed off. With this in mind, it's crucial to align the purchase of a charity CRM to your organisation's overall objectives and strategic goals.

In the following sections, we highlight the areas you should focus on in order to support that all-important sign off.

2.1 Current challenges and obstacles

As with any fundraising communication, it is important to take some time to consider the “need”. To do this, you must talk to members of your fundraising team about the issues and challenges they’re facing. If you can, try and build a small bank of examples that show how the current system is negatively impacting your fundraising.

For example, it might be that your team is working on a dated system that is inefficient and wastes valuable staff time. Ask your team to track how long it takes to complete day-to-day tasks that could be easily automated – such as logging donations, updating donor records, managing consent and claiming Gift Aid. You can give this a monetary value by estimating an hourly rate based on gross annual salaries. It might sound a little invasive, but you will be surprised at how quickly the hours and money adds up.

Providing a scenario, large fundraising organisations can spend up to a week per month managing bacs collections. A good CRM would automate this, which would be a saving of £7k per year for 5 days a month at £115 a day. But even more important is what you could use this time for and how much could be achieved during that time - which cannot be achieved today.  For example, freeing up this time would enable you to run an additional event or launch a new campaign.

As well as time, you also need to consider the barrier and limitations your current system creates. Does it have the functionalities you need to deliver essential tasks like generating donor reports, tracking income, segmenting audiences, and integrating online donations? Analyse the outcomes and compile a succinct list of high-priority issues that show where the current solution falls short.

2.2 The risks of your standard system

Another important angle to consider is the potential risk of maintaining ‘business as usual’. In the UK, fundraising organisations are expected to abide by the Fundraising Code of Practice, as well as laws surrounding data protection (GDPR) and tax for Gift Aid claims. If your fundraising data is kept in spreadsheets or across multiple programmes and tools, it can be difficult to keep the required information and systems accurate and up-to-date.

Not only could this harm your day-to-day donor stewardship (for example, by sending out communications where consent has not been given) it also opens your organisation up to complaints, third-party threats and potential data breaches.

2.3 Think about your needs and how a charity CRM can help you deliver

Once you’ve established the challenges and risks of your current system, you need to consider the benefits of your future one. Look back at your research and ask key questions. What are your team’s primary needs? How can a fundraising CRM help you meet them?

Examples might include:

• Simplified and streamlined day-to-day tasks
• Swift access to key information
• Accurate and complete donor records
• Data analysis and report generation
• Audience analysis and donor segmentation
• Integration with third-party platforms (e.g. your website)
• Consent management
• Gift Aid management
• Remote working
• Cloud access

As your business case comes together, you will need to take this line of thought even further and think about what the above benefits mean for your fundraising future (see Part 3.3 for tips on how to do this).

2.4 The ‘total’ cost of charity CRM ownership

When it comes to core spending and non-profits, cost is always going to be an issue. That’s why you need to show your Board and senior team that you’ve done your homework and are well-versed on how much introducing a new charity CRM is going to cost.

It is always advisable to get a number of baseline quotes (at least three), in order to have a good idea of sector benchmarks and where your preferred supplier sits within this. Having this background context on-hand will also help you frame your case, so that you can show decision-makers that your chosen solution is in line with standard market rates.

As you narrow your list of suppliers, you will also want to research one or two more detailed quotes. To do this, it is important to consider the ‘total cost’ of CRM ownership, and to make sure that your calculations factor in additional services and features, such as:

• Training and technical support
• Repairs and maintenance
• Upgrades and servicing
• Security
• Data migration
• Implementation
• Hosting

Most sales people will work with you to discuss your options, and will provide a detailed quote and service agreement, ensuring that you understand exactly what’s involved (check out Part 3.4 and 3.5 for more details on presenting your budget and calculating your return on investment).  

Top tip: as an added extra, you may wish to calculate staff time involved in training and project development, just to make sure you’ve covered everything!

PART 3: Steps to building a competent charity CRM business case

Once you’ve done your background research, it’s time to start bringing the pieces together and put your case down on paper. Don’t worry if the final document is quite “substantial”. It should be. A good business case is detailed and transparent – it anticipates and answers questions, while laying out a logical, quantified case for investment.

Not sure where to start? We’ve identified a few headline steps to help you bring your plan together.

3.1 Quantify the need

As fundraisers, you know all about the importance of explaining “the need”. You aren’t required to air every piece of dirty laundry, but you should make sure that you create space to cover the challenges, limitations, risks (and cost!) of continuing with your current system. Ensure to provide a few concrete examples and add numbers and financial quantifiers when possible.

3.2 Detail the proposed charity CRM solution

When it comes to presenting your chosen solution(s), it’s important that you provide as much detail as possible. The more information you offer, the less questions decisions-makers will have, and the more informed their response will be. 

To do this, we recommend listing features in a specification format, ensuring no detail is lost. Potential headings could include:

• Technical specifications
• Administration specifications
• Links to third-party products (integrations)
• Reporting capability
• Document management
• Inputs to the system/outputs from the system

The details under each heading will vary depending on your chosen solution, its features, and integration capacity. Don’t worry if it all sounds a little daunting. Your software provider will be more than happy to provide this information and answer any technical questions you may have. 

3.3 Outline the benefits of your chosen charity CRM

In Part 1, we considered the immediate benefits of your chosen solution. The challenge now is to show your Board and senior team what this means. To use a little fundraising lingo –  you’ve got your outputs. What you need to do now, is focus on your outcomes.

Here are a few examples to help you make this transition:

• Streamlined day-to-day tasks = the time to do more

It might not sound exciting, but the impact of simplified and automated tasks cannot be understated. The key word here is “time”, and a charity CRM will help you save it. This means your team will have more space to do their job, whether it’s trialling new ideas, deep-diving into data, or split testing campaigns. In fundraising, time is money, and as team outputs increase, it stands to reason that your income will too.

• Data analysis and report generation = a 360^o view of fundraising

As fundraisers, we know that the ability to analyse and interpret data is a key part of the day-job. The question you need to ask now is: why? It’s all about clarity. Data analysis and reporting will help build a 360^o view of donor and fundraising activity – making it easy to identify giving trends, track donor retention, and do useful things, like analysis campaign response rates. You can use this information to make proactive changes that will improve donor engagement, response, and retention. All of which will help boost your fundraising income!

• Streamline regular giving = full oversight of Direct Debit activities

Unsurprisingly, a consistent flow of donations is essential for any charity organisation. A charity CRM solution provides you with a full oversight of your Direct Debit activities, enabling you to manage these as you see fit. For example, it will allow you to record new Direct Debits that are lodged with the bank, before the payments are fed back to the CRM as they are collected. This therefore automates a time-consuming process, especially if it was managed via an Excel spreadsheet.

• Considering inputs and outputs = stronger relationships with supporters

Following on from the previous point, it’s crucial to consider inputs and outputs. Processing regular giving requires outputs to payment systems of new Direct Debits and inputs of collected payments - a good CRM will do this for you and take away this work, enabling you to build relationships with your supporters.

• Audience profiling and donor segmentation = improved donor stewardship

The more data you have, the easier it is to create highly targeted fundraising communications that work for your target audience. This feeds into your overall donor journey and stewardship strategy, making it easier to convert one-off gifts into regular gifts, target high-value givers, and even solicit legacy donations.

• Gift Aid management = increased unrestricted income

Did you know that an estimated £560 million of Gift Aid goes unclaimed by UK charities every year? An essential source of core income, no organisation can afford to let their Gift Aid go to waste. A charity CRM with a comprehensive Gift Aid management tool will help your team identify gaps, make timely claims and recoup any lost income.

Looking at the list above, you’ll notice that there is a single, very common theme: money. When you present your business case, it’s important to present your charity CRM not just as an administrative tool, but as a fundraising one. With a charity CRM on your team, you are creating an opportunity (or multiple opportunities) to improve your processes and boost your fundraising income.

Top tip: If you can, assign a monetary value to these benefits. You might also want to include a few customer case studies that bring some of your listed benefits to life.

3.4 Presenting a full and transparent budget for your charity CRM

You’ve done your homework. Now it’s time to present the budget range for your new charity CRM, and show your Board and senior team where your preferred solution sits.

Once you’ve done this, you will need to present your chosen quote in more detail. The important factor here is transparency. Don’t shy away from the numbers. You’ve done your homework, so have confidence in the final budget you’re presenting (make sure you include upfront and ongoing costs!). Also, it is absolutely fine if the solution you’ve chosen is at the top end of the market. Just make sure you highlight the additional features, and why you believe it’s worth the investment.

Once you’ve presented your main budget, you might also want to use this opportunity to “remind” your Board and senior team of the cost of doing nothing. Be sure to include the calculations you made around wasted staff time!

3.5 Calculate the final return on investment

Once you’ve presented your budget, it’s time to shift your focus to the all-important ROI. It may sound daunting, but ROI’s are a great way to help frame your case as a long-term, strategic investment that adds value.

Put simply, ROI is a financial metric used to evaluate the profitability of an investment relative to its cost. It is generally represented through the following equation:

Essentially, to calculate your ROI, what you need to do is put a number to the ‘gains’ your new charity CRM will bring, and divide this by the total cost of ownership.

Given the potential to improve income generation with a charity CRM, the first number can be quite tricky to forecast and quantify. We recommend working with a member of your finance team to map out your potential gains, and allocate a cost amount.

You may also find it helpful to split your ROI calculations into years (Y1, Y2 and Y3). While upfront costs are likely to be higher in Y1, as the benefits of the system embed, you should start to see your ROI increase. Showing the progression in this way will help manage the expectations of your Board and senior team, and encourage them to think forward.

Need a little help calculating your ROI? Our expert team is on-hand to answer your questions.

3.6 Detail the timeline of implementation of the charity CRM

Depending on the size of your organisation, and the level of data to be transferred, you should allow between 6-12 months to introduce a new CRM. This is your chance to show your Board and senior team that you’ve done your homework, you understand the systems and processes involved and the time it will take to bring the project round to completion.

3.7 Describe the project governance

As with any project, it’s important to make sure that you have a clear project management process in place, and that the framework for decision-making is clear. The latter is covered by your project governance, with tasks and responsibilities likely to be divided between yourself (i.e. the client organisation) and your chosen software provider.

To help you think this through, we’ve provided a headline list of activities generally covered through project governance frameworks:

• Policies
• Regulations
• Functions
• Processes
• Procedures
• Responsibilities

In order to ensure that your project remains on track, it's essential to have an agreed scope. This will help you to decide what is/isn't included, assisting you to control the budget and timeframes, while ensure that the project is a success. It can be tempting during implementation to introduce new or extended requirements and processes which will eat time and money, while preventing you from achieving your initial objectives. While this is acceptable, it should be a conscious decision rather than scope creep derailing your plans.

For more detail on project governance frameworks, and the role of individuals involved, we recommend checking out the following website.

PART 4: How to gain stakeholder support for your charity CRM business case

The best way to gain support for your business case is to make the process as open, transparent and visible as possible. To do this, it is important to identify an internal project lead. Not only will this help drive the process forward, it will provide your team with a “point person” – that is, a single point of contact who is responsible for managing the process, reassuring stakeholders, and ensuring vital questions are answered.

As project lead, you should also suggest that everyone who will use the new CRM is part of the initial scoping process. It is important that you take the time to understand their needs and perspectives, the challenges they are facing, and the benefits they would like a new database system to bring.

It can also be helpful to invite representatives from shortlisted companies into your organisation. This will give your team the chance to see product demonstrations, ask questions, and feed into software selection. Once you’ve chosen your preferred solution, arranging a call (or meeting) between decision-makers and the software team is a great way to bring key stakeholders into the fold, start building a provider relationship, and create space for detailed discussions.

As the project moves forward, it is also your job to ensure that the people responsible for releasing funds or approving key documents are kept in the loop. They might not use the software on a day-to-day basis, but it is important that they know how the project is progressing.

In the end, it all comes down to transparency and visibility. If the right people are made aware of your project, and brought in at the right time, the more likely they are to invest in the process and help you make your case.

PART 5: What should you do if your charity CRM business case is rejected?

Don’t panic. Your business case won’t be the first to have been rejected, and it won’t be the last. What’s important is that you take the time to understand why your proposal was unsuccessful, and to use this as an opportunity to learn and regroup.

Once you have stakeholder feedback, you can look at the issues and obstacles highlighted, and make a plan to address them. You may find that the solutions are simple, and that all you need is a little extra clarity, or a slight tweak to your proposal and budget (if you’re looking for opportunities to bring decision-makers into the process, a feedback and review meeting could well be one of them).  

If there is a larger issue at play, don’t hesitate to engage with your software provider. They may well be able to give further demonstrations, or hold conversations with decision-makers to increase the chances of success. It’s also okay to negotiate. Salespeople are used to some pushback on timelines and costs – it may not always be possible, but companies that want your business will do their best to secure it.

and finally… speak to one of our charity CRM experts

Choosing the right charity CRM and building a supporting business case can feel like a daunting and overwhelming task. But it doesn’t have to be. By following the steps outlined in this online guide, you’ve got the foundations you need to start moving forward and presenting a considered, researched, and rational argument.

Still need to talk it through? No problem. Our expert team is on-hand to answer your questions, and provide the information you require to build a successful case for investment.