We're in the midst of researching our Consumers Guide to Low Cost Donor Management Software, in partnership with NTEN - and I have to say, it's pretty darn interesting. We're just finishing up with quick 30-minute demos of about 35 different systems (Yes, 35). There's certainly some that stand out as better and worse than others, but at the highest level what stands out to me is how many good tools and solid choices there are.
For comparison, we were doing similar research into Grants Management Systems for grantmakers about this time last year. There's a fair amount of overlap in functionality between these and donor management systems - for instance, in both it's important to be able to track contact info, see a summary of all activity, do robust mail merges and merged emails, query, and do reporting. But the best of these systems - ones that went for tens or even hundreds of thousands of dollars - are just not as reliably solid in things like mail merging, querying, and usability.
If we were comparing only the similar features, the best of the grants management software packages would probably not be in the top ten of the donor management systems that we just looked at. Although they're several of orders of magnitude more expensive, without a vast amount of more complicated features.
Why is that? I'd say that the primary factor is largely the size of the market. There are far more nonprofits than grantmakers. That funds the development of existing tools, and makes it much easier for a new tool to find enough market to start out.
I'm not surprised by the difference, but I am surprised by the magnitude of the difference. It makes the difference between great tools and kind of mediocre tools to allow organizations to do their work. And it shows how important it is to make sure that businesses can thrive in serving nonprofits.