Earlier this year, a consortium of five of the largest foundations in California joined together to provide significant new funding (up to $400,000 per grantee) to the state’s highest-performing, youth-serving nonprofits. The foundations, according to an announcement, believed that the most important attribute among eligible recipients was eagerness to “transform their passion for helping disadvantaged youth into data-driven insights and practices that will help them deliver even stronger results” (emphasis mine).
Funders across the sector are increasingly requiring applicants to provide data that demonstrates programmatic impact. How will grantees fare in this new reality?
Here is a simple but powerful self-diagnostic: Are you still using Excel (or a similar spreadsheet platform) to track your clients?
The answer may be more important than you think. To understand why, it is necessary to understand the fundamental limitations of a spreadsheet.
Spreadsheet = Grocery Store
How a grocery stocks food is a good analogy for how a spreadsheet stores client information—think of store aisles and shelves as equivalent to a spreadsheet’s columns and rows. Both a grocery aisle and a spreadsheet column contain a certain kind of thing—aisle 17 has cereals, column AC has the client's registration date. Both a grocery shelf and spreadsheet row add specificity to that kind of thing—Cheerios are in on the bottom shelf of aisle 17, John Doe’s client registration date is in row 218 of column AC.
A grocery model of storage is fine when the underlying thing you’re tracking doesn’t change much. The Cheerios on aisle 17's bottom shelf today will be there tomorrow. Similarly, John Doe's registration date captured in AC218 will remain fixed. This fixedness allows spreadsheets to perform complex calculations and formulas. But even when spreadsheets move and re-sort data, they are still relatively rigid—the relationships between columns and rows have to remain constant.
Spreadsheets start breaking down when something changes and you need to track it. Consider how a nonprofit would use a spreadsheet to track John Doe as a student going through its educational program. The spreadsheet is sufficient for storing unchanging information, such as John’s name and address; it sets up a fixed and manageable number of columns. But suppose you want to track attendance at each new session, the curriculum at each session, ongoing staff observations, or test scores? You need to add a new column for each new piece of information, and the spreadsheet quickly becomes ridiculously wide and unmanageable. As the number of clients grows and programs repeat, navigating the spreadsheet is like entering a grocery store that is constantly constructing new aisles and layering on new shelves.
What usually happens is that staff members create separate spreadsheets to track only the information that is immediately relevant to them, fracturing data and representing an incomplete picture of clients’ experiences over time. John Doe appears on one spreadsheet for the tutoring program one year and on another spreadsheet for a leadership development program another year. If a nonprofit's theory of change depends on recipients moving through the programs in a certain fashion, the data fragmentation makes it impossible to measure that its actual effectiveness.
This process also degrades staff collaboration and efficiency. Team members struggle to get necessary information from each other, and gleaning organization-wide counts becomes a difficult, time-consuming process. The risk of clients falling through the cracks of different spreadsheets is enormous.
Client Relationship Manager (CRM) = Restaurant Kitchen
The route out of this situation—and the often-mediocre organizational performance it produces—requires a fundamentally different platform: a client relationship manager (CRM). Salesforce is probably the most well-known example of CRM software, but there are others, including Efforts to Outcome and ClientTrack. In the business world, CRMs grew out of the corporate sector's awareness that the business process of selling was poorly supported by spreadsheets. Sales is about managing change toward an end goal: moving people through a pipeline of multiple interactions to go from point A (a cold lead) to point Z (a repeat customer).
If spreadsheets resemble grocery stores, then CRMs are restaurant kitchens, where there is constant change. Potatoes start out in the pantry, then move to the sink for washing, the counter for peeling, a pot for parboiling, a cutting board for slicing, and so on. In the same way, CRMs develop around established workflows, supplying the right information for each stage in the pipeline. A restaurant kitchen also facilitates collaboration—think about how many staff and steps are required to produce a French fry from scratch. Similarly, CRMs supply different slices of client information to different staff members, depending on their role. Restaurant kitchens are structured for maximum flexibility; if mashed potatoes replace French fries on the menu one night, the potato workflow changes. Correspondingly, CRMs can flexibly handle client data to generate exactly the kind of report required for any given situation.
But a CRM offers more than just greater organizational efficiency; how we store information shapes how we think. If an organization continues to store clients like a grocery, how a staff members think about clients gets constrained accordingly. Fixed information,such as raw volume and revenue, become dominant metrics because it is the kind of data that’s available. This can tempt a nonprofit to think about growth simply in terms of increases in client numbers and budget size. But a restaurant kitchen thinks about food in terms of transformation; the staff is inspired by the daily change that they witness and effect. A well-implemented CRM can motivate nonprofit staff in an analogous fashion, for example, they may observe: “Our data shows that 50 percent of our kids who started our tutoring program three years ago became leaders this year—and if we can figure out this point in our theory of change, we can get that number up to 75 percent—so let's get to work!”
How to Truly Excel
A few practical considerations for implementing a CRM for your client database:
- Find an expert to guide you. This could be a pro bono volunteer who has worked with CRMs in a business context, a consultant who specializes in the nonprofit sector, or another nonprofit leader who has gone through the process already.
- Do your research on the options. We are fans of implementing Salesforce for nonprofits for a host of reasons, but there are certainly other possibilities. Keep in mind that many nonprofit CRMs out there are designed for fundraising first, and can be suboptimal for client management.
- Establish a budget. As a very rough guide, I recommend the average nonprofit set aside at least $20,000 for the one-time implementation process.
- Assign a project manager. There should be one person who has authority to tame the flock of spreadsheets roaming your organization.
Installing new software does not guarantee excellence any more than plopping a Viking stove range in the middle of the produce section would transform a grocery store into a five-star restaurant. But the move will give you the tools necessary for your best work: achieving transformative impact for clients and tracking the most meaningful results.
Read more stories by Curtis Chang.