Image @ depositphotos

By David Deal

Microsoft announced that it will be retiring its Fundraising and Engagement solution and ending support effective December 31, 2026. What does this mean for nonprofits, associations, and foundations? And, what does it mean more broadly for nonprofit constituent relationship management systems (CRMs)?

Microsoft’s Fundraising and Engagement was spearheaded by Microsoft’s Tech for Social Impact and launched in October 2020. It was an effort to make Microsoft Dynamics 365 (CRM) a more competitive offering for nonprofits, associations, and foundations and to compete more directly with Salesforce’s nonprofit offering – Nonprofit Cloud (Nonprofit Success Pack).

Both Microsoft’s Fundraising and Engagement and Salesforce’s Nonprofit Cloud are solutions to make Dynamics and Salesforce, which were built originally for business-to-business sales, work better for nonprofits. Fundraising and Engagement is essentially an add-on to Dynamics 365.

Microsoft announced that they were ceasing additional development of Fundraising & Engagement. This means leaders at nonprofits, associations, and foundations that have either invested in Fundraising and Engagement, or those that invested in Dynamics 365 with the expectation of eventually leveraging Fundraising and Engagement, need to start planning.

By announcing that they are retiring Fundraising and Engagement, Microsoft is ceding development of certain nonprofit functionality to third-party developers. As Microsoft shared with impacted customers, several solutions exist that provide somewhat similar functionality to Fundraising and Engagement including MissionCRM, Barhead, and mhance. Additionally, there are implementation partners/SI’s that are committed to leveraging what Microsoft has built beyond the end-of-life for Fundraising and Engagement.

Nonprofits managers who wish to use Dynamics 365 for fundraising would need to license third-party solutions such as the ones that are listed above, or work with a partner/systems integrator to continue to support what was built on Fundraising and Engagement.

It’s worth noting that for many nonprofits, this announcement might be reasonably inconsequential. There are many more nonprofits, associations, and foundations that use Dynamics 365 but have not needed to use Fundraising and Engagement. There are potential solutions such as STRATUSLive, with significant market share among United Ways. For associations there is Altai, an AMS (association management system) built on Dynamics, and for foundations there is AkoyaGo built on Dynamics.

Lastly, for nonprofits where fully custom configurations on Dynamics 365 or legacy Dynamics CRM have been built, the retirement of Fundraising and Engagement is not particularly notable but might impact future plans.

With Dynamics gaining traction in recent years as perhaps the number two CRM ecosystem behind Salesforce, how does this decision change the marketplace for nonprofit CRMs? This has some similarities to the earlier years of Salesforce for nonprofits. There was a period where their preferred approach was to not sell a fundraising solution directly, so there were fundraising offerings from third-party solutions like CauseView, Affinaquest, and roundCause. Here is an “oldie but goodie,” article that describes the Salesforce ecosystem back in the day.

A now seemingly out-of-date evaluation stacked Microsoft Dynamics against Salesforce, and offers some potential reasons that Microsoft is getting out of the nonprofit CRM solution space.

To the extent that Microsoft’s announcement helps to create/nurture more offerings, a positive is that nonprofits will have more choice. But a negative is that it increases complexity for end users and chief information officers (CIOs) due to the diversity of data models from competing solutions.

Microsoft’s announcement might reasonably cause some to wonder about Microsoft’s commitment to competing in the nonprofit CRM space. As long as Microsoft continues to offer discounted pricing for Microsoft Dynamics 365 to nonprofits and the complementary Power Platform solutions, this move might not significantly undermine their competitiveness in this market. It does mean that third-party solutions such as Mission CRM will need to continue to be available for Dynamics 365 to remain competitive.

Dynamics 365 remains dramatically less expensive than Salesforce in most scenarios for largely comparable functionality. However, if the nonprofit discounts are on the chopping block, then that would largely relegate Microsoft to the relatively low market share they historically had among nonprofit CRMs.

There are many options for nonprofits for which Dynamics is no longer a fit. Additional solutions that could be positioned as fundraising-centric nonprofit CRMs include solutions such as EveryAction, Virtuous, Raiser’s Edge, and ROI Solutions. Notably, HubSpot is emerging as a potential competitor to both Dynamics and Salesforce. However, few would be true CRM platform competitors to Salesforce in the way Dynamics 365 has been. By platform that refers to software solutions capable of meeting needs beyond just fundraising.

Nonprofits, associations, and foundations have moved toward CRM platforms during the past decade because of the flexibility they offer. However, at least at the enterprise level, historically only Blackbaud CRM really enters the conversation as a potential platform-based alternative to Dynamics 365 or Salesforce. Ultimately, if Microsoft were to eventually exit this space it would have a dramatic impact on the already limited CRM platform options available to nonprofits.

In conclusion, Microsoft’s decision to retire its Fundraising and Engagement solution for nonprofits will impact different organizations differently. What is the right path forward? Not surprisingly, it depends. Selections create opportunities to ask, and answer, significant organizational, data, and technology strategy questions.  Microsoft’s announcement, for any nonprofit, association, or foundation, creates the opportunity to pause, plan, and act.

*****

David Deal is a partner and co-founder of consulting firm Build Consulting in Washington, D.C.. His LinkedIn profile is https://www.linkedin.com/in/ddealdc

The post Commentary … Microsoft’s Decision Opens Opportunities For Change appeared first on The NonProfit Times.

Source From Non Profit Times