Data screen shutterstock_288375356 resizedThe most valuable asset of any nonprofit organization is their donor database. The donors are the lifeblood, and without them the mission of the organization could not be fulfilled. The most important decision about such a precious asset is to determine the best way to manage this donor database. For most nonprofits the first step in that decision is to decide whether to house the database internally or outsource it to a company that specializes in database management. The following are 5 top considerations for outsourcing your database.

1. Cost

Cost is obviously a top concern for all nonprofit organizations. While it may seem that housing a database internally is the most cost-efficient way to go, that may not always be true. Selecting an off-the-shelf product means that there will be an ongoing licensing fee and, potentially, individual fees per user. Depending on the product chosen, there may also be services that cannot be performed within the system, such as NCOA (National Change of Address) processing or Merge Purge processing for acquisition. Not only will the costs of these services be excluded from your licensing agreement, but outsourcing just a few services to an external vendor may end up being more expensive than a bundled solution.

2. Staffing

Keep in mind that in order to manage your data within your organization you will need staff on hand to maintain the database, pull reports and selects, enter donations, generate thank you letters, etc. This staff not only costs additional money but will also need to be the “experts” for your organization regarding the ins and outs of how the database works as well as the data that resides within it. If one of these staff members decides to leave your organization, they may take all of their knowledge with them, and it could be costly to replace them.

3. Focus

Every nonprofit wants the staff they hire to be focused on the core objectives and mission of the organization. Letting someone else worry about the day-to-day processing will free your staff to focus their time and energy on the activities that will bring the most value to the organization.

4. Data Quality

One of the biggest benefits of outsourcing your database is ensuring high-quality data. Database management companies do exactly as the name suggests, they manage data for a living. This means that they are well versed in the best practices of the industry and typically set strict business rules for maintaining the highest quality data possible. Their core competency is to focus on making sure that the data that they maintain adheres to all of the United States Postal Service and industry standards, as well as following the best practice standards.

5. Technology

Most off-the-shelf products are one-size-fits-all, cookie cutter systems. The fundraising landscape is continuing to change. New channels and methods are being used, so it is important for nonprofit organizations to understand whether the fundraising software they choose will be continuously updated with new features to accommodate the changing market. In addition, are these updates included in the current pricing structures, or will they lead to additional costs down the road? Customizing the program or creating reports that are specific to your needs is often impossible or very expensive. Outsourced solutions often include the ongoing support of system upgrades and added features. With a dedicated staff on hand to handle the ad hoc requests of their clients, they also allow for flexibility that cannot be found elsewhere.

Choosing the right option for your organization can help set the stage for success. Whether it is an in-house solution or a full-service database provider, making sure that the needs of your organization are met is the number-one consideration in any database selection. Without data, there wouldn’t be an organization!

Sara Rowland is a Business Analyst at Innovairre Communications, which supports more than 500 nonprofit organizations around the world. Contact us at, and follow us on LinkedIn and Twitter.