Excel vs. Database: Why A CRM Database is Better

Excel is not a CRM Database

 

Why do we need to spend so much money on a new database? This is a typical question many nonprofit executives get asked from their board and even among themselves. It’s logical to gravitate to something like Microsoft Excel to manage those lists & prepare those key reports. In this article, I am going to pick on Microsoft Excel and discuss the impact of using a flat file database as a central repository for your constituent data and why you should consider other database choices.

Why Excel Shouldn’t Be Your Database

The idea of simply buying Microsoft Excel is very tempting. It’s inexpensive, many businesses have experience with it, and after all, it’s made by Microsoft. I get it. On the surface, Microsoft Excel appears for most (your board) to be a logical choice to manage your member, donor, or constituent data. But, the easiest choice and most inexpensive (at least from a hard dollar price) isn’t always the best course of action for your organization.

The Microsoft Excel flaws in managing constituent data

It’s obvious every organization (nonprofit or for profit) has to manage their clients data. In the nonprofit world, we call it something a little different but the principles apply across organizations. We keep track of constituent profile information, record donations, and track gifts. And, most small nonprofits I talk too use Microsoft Office.

So, I concede to you that Microsoft Excel is great with calculating and dealing with numbers. And, in a very archaic 20th century manner it can track your contacts, categorize them for you, and even allow you to make a note on various activities. However, that’s where it ends. There are some fundamental flaws to consider.

What is the Big Problem with Excel as your CRM Database?

Flat File:

What is a relational database? I am glad you asked. From my friends (well, I don’t know them) at Techopedia:

A relational database (RDB) is a collective set of multiple data sets organized by tables, records and columns. RDBs establish a well-defined relationship between database tables. Tables communicate and share information, which facilitates data searchability, organization and reporting. RDBs use Structured Query Language (SQL), which is a standard user application that provides an easy programming interface for database interaction.RDB is derived from the mathematical function concept of mapping data sets and was developed by Edgar F. Codd.

Translated into real language, this means it’s not designed to handle relationships between data, such as when one record (such as a member, donor, customer) needs to link to several other records (like a dues payment or gifts).

A flat file solution like Microsoft is an absolute disaster. First, you have to add a new column for every new piece of contact information; even if only one person on your list has three email addresses, you will need three email columns. You cannot easily link donor pledges to payments, or track “soft credits” such as crediting individuals for corporate matches or gifts made through a family foundation for example.

Relationship Management:

Tracking relationships is an important aspect of major gifts work, membership management, and customer service. Excel is not designed to track relationships between constituents, such as spouses with separate records, members of households, or employment relationships.

Activity Management:

Excel will not notify you of upcoming tasks, like a tickler to remind you to follow up with a prospect, submit a grant application, or send a birthday card. Nor will it alert you to move someone to a lifetime giving club when their cumulative donations reach over $X (e.g., $100,000). It can also be cumbersome to analyze Excel data for complex patterns, such as looking for donors have given for over five years, have a cumulative giving level of over $10,000, and attended more than two of your events.

Segmentation:

Security, reporting, and query options are limited. Anyone who can update your spreadsheet can update everything. It is easy to hit the wrong key and accidentally delete or change data. If you don’t catch an error right away, you better have a good, recent backup on hand.

Data Management:

Finally, if your fundraising program is successful, your spreadsheet can grow very large. Spreadsheets with thousands and thousands of records become hard to view, print, or manipulate. Excel does not provide a rich array of tools to maintain data integrity.

Necessity is the Mother of Invention

I am amazed by some of the ways I have seen nonprofit staffers deal with their lack of technology. So, it’s not uncommon for some to have created some fabulous ways to deal with the challenges of their data by using something like Microsoft Excel to manage their organization. But, with entry level low cost Tier IV cloud based solutions on the market today, it’s a shame that many nonprofits still use Microsoft Excel to manage their most important asset, their people. And, further rely on it to maintain their critical relationships.

Can you get a Donor Database or Member Database for less than $1 Dollar a day? 

Amazingly, yes you can! That is why it is absolutely ridiculous in this day and time to start out with something like Microsoft Excel to run your nonprofit. There are so many relational databases on the market today for even the smallest of nonprofits to utilize which can do so much more than just store data:

  • Member of Donor Management
  • Events Management
  • Website Building
  • Email and Mail Merge Communications Management
  • Community Management
  • Online Payments for donations or dues
  • Development of Forms
  • Reporting

The value of using the best fitted database at your nonprofit

In my opinion, your database should be the intellectual capital of the organization. There shouldn’t be one person or multiple staffers who have different versions of data for each facet of their respective area (Events, Member Management, Donations, Communications etc.). Your database should make it easy for you to look up records, donors, view giving histories, understand the nature of your relationships, and analyze data.

It should be a blessing and not a curse to those who use it.

Selection of a database solution is a critical decision with major strategic and financial implications. When starting your 501 (c) 3 or association, don’t make the error of choosing the easy path to hell using Microsoft Excel.

If you need more convincing, give us a call. We would enjoy having the opportunity to share with you why we believe many of the Customer Relationship Management systems for nonprofits are a better choice for your nonprofit than your Microsoft Excel alternative.

Until next time, keep SmartThoughts in mind.

Database Software for 501(c)3 and Associations