Nonprofit Software Over the Years: How Organizations Leverage Technology to Achieve Better Outcomes

More than 1.5 million nonprofit organizations are registered in the U.S, including public charities, private foundations, chambers of commerce, and community organizations. While nonprofits are tax-exempt, they still require money to perform day-to-day operations, pay their staff good wages, and deliver services that benefit their communities.

Today, thousands of nonprofits rely on different forms of software that help them manage finances, organize teams and projects, engage with donors, canvas supporters, launch marketing campaigns, process online donations, and provide life-changing health and human services.

But many of these software solutions didn’t exist just 10 to 15 years ago. In this article, we’ll explore the evolution of nonprofit software and how organizations have adapted to using digital tools that make their workflows more efficient and effective:

1970s: The Beginning of Streamlined Business Practices

The first software solutions were tailored toward for-profit businesses rather than nonprofits. At the time, computers were expensive and not widely adopted outside of corporate and research settings. By late 1997, Oracle and Artemis launched the first project management software solution to help teams set goals and manage tasks across a team.

Two years later, VisiCalc, the first digital spreadsheet was created. For years to come, spreadsheet software would be adopted by businesses and nonprofits alike to manage customer and donor information, finances, projects, and a wide variety of data. Human and health services nonprofits would one day transition from using paper files for case management clients to spreadsheets and digitally stored records.

1980s: The Internet and The First Fundraising Platform

The creation of the Internet in 1983 revolutionized modern computing and software development. Software engineers in the 1980s began developing tools for nonprofits as part of an initiative to use computer technology for social change and community impact. The first nonprofit-targeting software tool, DonorPerfect, was a fundraising tool developed in 1985 and launched widely via Windows a decade later. 

During this period, software companies also recognized a need for businesses and nonprofits to manage customer and donor contact information. The first customer relationship management (CRM) tool launched in 1987, and essentially functioned as a digital rolodex that helped manage contact information.

1990s: Volunteer Recruitment and The Rise of SaaS

As accounting, networking, and business management software continued to evolve in the 90s, so too did platforms tailored toward nonprofit operations. Software developers wanted to develop a digital platform that would help volunteers find nonprofits that they could get involved with, benefitting both nonprofits and their communities. By 1998, VolunteerMatch was widely released. 

A year later the popular first software as a service (SaaS) company, Salesforce, was founded. SaaS–also referred to as “cloud computing”–is a business model where customers pay to have access to software that’s hosted on a remote server, versus installing a local floppy disk drive.

2000 – 2010s: Social Media, Crowdfunding, and Online Donations

The rise of modern social networking, starting with MySpace in 2003 and Facebook in 2004, completely transformed marketing, public relations, political campaigning, customer service, and donor engagement. Facebook Pages for Business was the first popular social media platform that enabled corporations and nonprofits to directly communicate with their target audiences outside of traditional marketing, web, event promotion, and advertising channels. 

As consumers grew more accustomed to online shopping–thanks to the popularity of Ebay and Amazon in the mid-90s–there became a need for nonprofits to receive donations digitally. GoFundMe was founded in 2010, and two years later Blackbaud launched Raiser’s Edge, a pioneering digital fundraising payment platform.

For many nonprofits, however, purchasing specialty software wasn’t always deemed financially viable. Nonprofit leaders tended to operate on bootstrap budgets and software was very expensive while being far more limited than modern tools. With hefty price tags and kinks to still work through, many nonprofits opted to only enroll in software solutions that were absolutely necessary. In a lot of cases, Excel continued to be a popular tool that many nonprofits used for decades to manage volunteers, finances, projects, service delivery, and data storage.

Modern Nonprofit Software

A lot has changed since the 1970s. Today, nearly every nonprofit organization in the U.S. relies on a wide variety of software tools to improve profitability and efficiency. Adopting modern nonprofit software allows organizations to pivot quickly, respond to their communities’ unique needs, and manage finances and operations.

In 2020, nearly half of nonprofit leaders claimed that they needed to adapt and alter service delivery in the wake of the COVID-19 pandemic. Being digitally savvy paid off. More than two-thirds of nonprofits that were highly digitally mature in 2020 met or exceeded their program delivery goals, despite the pandemic’s drastic impacts on operations, compared to 44% of nonprofits with lower digital adoption rates. 

Nonprofits use software to manage accounting and finances, digital payment processing, fundraising, donor engagement, project management, program delivery, human resources, and marketing.

Accounting Software

From everyday accounting and gift processing to grant management, nonprofit accounting software helps organizations manage income and expenses. Maintaining organized financial records also helps donors, boards, and funding agencies understand how funds are allocated.

Online Gift Processing

Nonprofit fundraising software makes it easy to engage with donors digitally and process online donations. There are three core forms of donation processing software: crowdfunding software, online fundraising software, and online donation processing software. Many of these tools can be branded and embedded directly into a nonprofit’s website, refining the donor experience.

Donor Management Software

Many nonprofits rely on some form of donor management software to help organize donor information and track engagement. Some donor management software solutions also help nonprofits organize events by recruiting and scheduling volunteers, selling tickets, and fundraising.

Project Management

Project management software helps nonprofits create and manage tasks, plan project timelines and key deliverables, track project progress, and empower team members to collaborate.

Human Resources

Some businesses and nonprofits opt to outsource human resources services versus hiring in-house HR specialists. Human resources software can be an affordable option that supports staff recruitment, onboarding, personnel documentation, time tracking, evaluations, performance tracking, and payroll. 

Marketing and Customer Relationship Management (CRM)

Nonprofits use a wide range of marketing software solutions to execute campaigns, target specific audiences, engage with clients and donors, communicate impact, and solicit gifts. CRM tools offer a centralized database of donor and prospect data, past interactions, and gift officer notes. Other marketing software solutions help nonprofits design and schedule email campaigns, accumulate contacts, automate marketing workflows, deliver digital marketing content, and report outcomes.

Nonprofit Program Delivery: Case Management Software

Certain nonprofits–particularly in health and human services sectors–require specialized software solutions that help them deliver programs and services. One key example of nonprofit program delivery software is case management software. While case management was developed in the 1920s to help align social work and psychiatric services, modern case management software digitizes files and client data, streamlines daily case management tasks, makes referrals and care team management more efficient, and enables program impact reporting. 

Today, adopting a cloud-based case management platform is essential for nonprofits in a wide variety of sectors, including: