As we work with the leading marketing tech providers supporting the nonprofit industry, we are seeking out the movers and shakers. We caught up recently with Dennis Mueller, managing partner for DonorSnap. Dennis has been working on DonorSnap for over 8 years and manages the overall design and functionality of the product. Previously, he had a diverse set of experiences running a large construction company and founding an early learning center. Enjoy this interview with Dennis and read more interviews from the Strength in Members Industry Expert Interview Series.
Could you introduce yourself and tell us about your background?
Like many, I grew up in a family that had a very strong influence on the path my life would take. We had a family construction company and all of us grew up understanding the business and seeing what it took to start a company. My father and his brother established the company and my older brothers went into the business. Being the youngest, my focus was college and there was never any real expectations that I would go into the business. However, having grown up where business was always part of life and family, the entrepreneurial seeds were planted.
My academic training and direction was really due to my father. He suggested I get into computers long before they were common place. He sent me to IBM school when I was a Senior in high school and that lead to a natural progression to studying computers in College. In college I enjoyed the computer classes but they were really focused on the technical side of the hardware and software. My upbringing was on the business side and again with my fathers prodding I switched into accounting. Accounting was a natural fit as it is the language of business.
Besides the academic and vocational effect of my father was the social effect of how my folks approached the world. They were very active in raising foster children in the earlier stages of their marriage and when I came along they had transitioned into having children from an Indian Reservation in Canada live with us and attend school in the States. I grew up in an environment where giving back was important.
From a business perspective, I graduated from the University of Wisconsin with an Accounting and Information Systems degree. I went to work for one of the national accounting firms straight out of college. The entrepreneurial side took over after three years when I became disenchanted with how they ran the organization and their lack of respect for employees. I took the unusual step of going out and starting my own firm after only three years experience.
The accounting Firm grew nicely but there were limitations on how large it could grow. After 10 years I was approached by my father about taking over the family construction firm. The timing was right and none of my brothers were still there. My father and I came to an agreement where I was solely responsible for running the firm but that I would do so for the benefit of the employees.
Over a couple of years, we developed a management group that was capable of taking what my father started and moving it to its next stage of growth. When I started in 1990 we had just done $40MM in sales. In 1999 we sold to a public company and were doing $250MM in sales and with over 1,200 employees. The sale was a tough choice but was made due to competitive risks we foresaw in the market. We did not think we could survive as a stand alone entity at our current size and that we needed to join a group that provided a broader scope of services. At the time of the sale, through our employee stock ownership program, we were able to pay out almost $50MM to employees that worked for the company. Everyone regardless of position received a longevity bonus that ranged from $5,000 to $50,000 which was unheard of in the construction industry We were true to our word that the employees were the business.
How did you get involved working with nonprofits?
Since the sale I have been busy with several endeavors. Right after the sale, my wife and I continued the family approach to giving back by building an early learning center in the inner city of Milwaukee. This school, Malaika Early Learning Center, was modeled after one of the better private schools that my children had the good fortune to attend. It was a $3MM project that we self funded as a way to give back. The school was for children ages 0-5 and primarily served a demographic marked by the highest teen pregnancy in the country, one of the lowest high school graduation rates in the country and one of the highest African American male incarceration rates in the country. Most folks know little about the blight that is in the African American Community in Milwaukee but it rivals Detroit and Washington DC in all the wrong ways.
This school continues today and has just completed expansion of the existing facilities to cover up thru 3rd grade. We are a five Star Early Learning Center that is accredited and recognized as one of the best facilities in Milwaukee. We are a Head Start Partner and Early Head Start partner school that serves about 120 children per year. Our academic program is one of the best around and is made possible by having an average student teacher ratio of 7:1. The children we are dealing with primarily come from single family homes that often move 2-3 times per year from apartment to apartment. There is little solid foundation in their lives but they have mothers who want them to have a better life than they had. (The average age of our mothers when they have their first child is 17).
How did you get involved with DonorSnap?
DonorSnap came about as a direct effect of Malaika Early Learning Center. Once our doors were open and we were up and running, it became apparent that we would need to be constantly raising money to fund operations (as a typical entrepreneur – you do what seems right and then figure out how to make it all work in the long run. We did not do any advanced studies or long term financial modeling. We knew Milwaukee needed high quality early learning).
DonorSnap hired a development director and they quickly requested software to manage the process. The asked for and we purchased Raiser’s Edge. This proved to be a mistake as that director left after 6 months and we had no knowledge of how to use the software. At that time Raiser’s Edge was charging $3,000 per person to attend a training course. I thought that was ridiculously expensive and decided to write my own small package in Access. This worked for about a year until I started to travel again weekly to consult with my former employees. It became difficult to share the software with people at the school and for me to view it from hotel rooms around the country.
One of the hallmarks of our family construction company was its use of IT. We adopted the internet early on and developed web based software to access our management information. I began to look around the market for web based software to manage Malaika’s fund development. At that time there were several good programs out there, eTapesty and DonorPerfect were two that I looked at. However, I was turned off by their pricing model. At that time the industry was still charging a user license for each user having access to the system. That seemed counter-intuitive to me since the idea of the web was to open up the resource to many people. I knew this was simply a pricing mechanism they had chose for their business however, it was also one I didn't agree with.
I enlisted the IT people from the family business to help develop a web based product that I could use for Malaika. They were doing this in the evening and I was paying them a small amount of money for their help. This was the initial genesis of DonorSnap. We ultimately created a very simple product that I could access from anywhere/anytime. The original goal was to just develop the software for Malaika but we realized there might be a broader market needing to be served.
DonorSnap was officially incorporated in 2007 and was co-owned by myself, my two former employees and a partner from San Francisco. We had two main principles when we launched the company:
- It had to be easy to use; and
- We would only charge $39 per customer.
We did not do a market study on the $39 but it seemed to be an affordable price that if we created enough scale, we would be able to make a profit. I was adamant, however, that we would not do menu pricing. As a user you would get everything we had to offer and I wouldn’t charge you based on your number of users. I knew it cost me the same amount whether you had one user accessing the system or ten. I wanted people to open up the use of the software to help their non profit. Not restrict its use due to cost.
Since inception, DonorSnap has grown to servicing over 2,000 non profits. We still adhere to the simple pricing structure that you pay a fee based on how many contacts you store in the system but we don’t charge for any modules or any additional users. (Its interesting to note that most of our competitors moved away from a per user charge about 5 years ago as DonorSnap started to get traction in the industry. I believe it was a direct result to the competitive pressure that we applied).
What is your role within the company?
My role with DonorSnap is to try and guide the future product development. Given my unique background of computers, accounting and business management, I have a fairly good sense as to what people need and how it should be presented to be easiest to use.
We are still a small organization that focuses on keeping its overhead down to provide the best product to the customer at the lowest price. The two original employees that initially launched DonorSnap are still with the organization and have been joined by a staff of 5 others (two of which are my sons). We are working on revamping the internal architecture of our software to continue to evolve it to offer new services and features. We still only market via the internet as the cost of having a sales force or attending trade shows would require a significant increase in the product pricing. We are content with our current growth and being family and friend owned we have no outside pressure to raise prices or hit growth targets. We can afford to be patient with the company.
Could you tell us a bit more about what DonorSnap does and how you interact with nonprofits?
DonorSnap is a “CRM” (to use an industry buzzword) for nonprofits. We see our role as helping an organization manage everything associated with the development process or interactions with key constituents of their organization. We are solely focused on nonprofits and built from the ground up for that industry (unlike other CRM products that are great but really built for business first and are trying to migrate into the nonprofit sector). Our software handles donation management, volunteer tracking, creation of online information and donation collection forms, integration with mailing systems, pledge management, etc…
How do you differentiate yourself from your competitors and what kind of nonprofits do you like to work with?
DonorSnap has several key differentiation features. We are probably one of the easiest to get set up and use. Customers can be up and running with a brief 90 minute training and able to tailor their system to their own needs. We carefully evaluate what features we add to DonorSnap to constantly weigh functionality vs. simplicity. The other key differentiation has been price. Possibly to our detriment, I’ve not allowed our staff to raise pricing to clients since we started. Our pricing model tends to concern larger entities as they think it is too low and therefore the software must not be fully functioning. When given the chance to explain, that 30% of our competitors monthly price goes into marketing their product, customers come to understand why we cost so much less. We are trying to present the best value for price software in the industry and believe that we do so.
Is there a blog you read religiously?
I can’t say there is a blog I read religiously. I tend to consume news from many different internet sources and be generally aware of what is going on in the world.
What's your favorite music? Book?
As you can probably tell I don’t read much other than current affairs. I do listen to the old folks music from the 70’s but generally when exercising.
What are some nonprofits that you admire the most?
I am always enamored with the non profits that have figured out how to keep in close contact with their constituents. Having started DonorSnap and run a nonprofit, I know what it takes to keep the lights on. The most successful usually have someone running the organization that is both good at the mission but also good at communicating to the constituents. Malaika has never been great at that. We have the tools but unfortunately it tends to follow my lead a bit which is more private. Leading an organization, you can’t be private and survive. You have to get out there with your message and make sure your constituents are constantly engaged. (As a side note, I used to do DonorSnap’s data conversion for customers that really were wasting time doing the hope and prayer approach to digital fundraising. Their records would be a mess, filled with duplicates and often spelling mistakes in names. Nothing tells a donor that you really don’t care like sending three of the same mailings to their house with three different spellings of their name).
What do you see as far as general industry trends?
I think the general industry trend will be toward mobile. Many of the current consumers of our product aren’t there yet, but the Millenials will start to get in the position of influence on the Donor Management side and they will demand their information at their finger tips.
What is one trend you think people don't see coming?
I do see one trend that most of our competitors are missing… But since I’m an entrepreneur and businessman, I’m not telling ☺
Do you have a personal quote you'd like to share that is emblematic of your beliefs about the industry, your organization or life?
Don’t have a single quote… There are a couple of beliefs I hold pretty dear:
- You judge a person by what he does when no one is looking.
- Everyone in the organization is important.
- Treat everyone with the respect they deserve.
- Respect is earned, not created by title, wealth or position.
About Strength in Members
Founded in 2012, Strength in Members is a team of strategists, designers, writers, developers and engineers who provide digital marketing and technology development expertise to organizations who do good in the world. The company helps clients shore up their digital marketing, fundraising, donor engagement, direct mail, social media and technology. The firm client’s include The Sierra Club, The Human Rights Campaign, Malaria No More, Polaris,HelpMeSee, AARP, Morris Animal Foundation, Children’s Cancer Research Fundand the Natural Resources Defense Council.
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Want to be interviewed? Email William@strengthinmembers.com