The typical setup for a small-to-mid NGO here is a donor list in one spreadsheet, a volunteer list in another, and program data in a third, maintained by whoever has time, which means it's usually out of date by the time a grant report is due.
A custom system merges these into one donor and volunteer database: donation history, volunteer hours, and program participation all tied to the same contact record, so a grant report doesn't mean cross-referencing three files by hand.
Volunteer coordination benefits the most from automation, matching volunteers to opportunities based on availability and skills, sending automatic shift reminders, and logging hours automatically instead of a sign-in sheet nobody transcribes afterward.
For donor relationships specifically, the system should make it easy to see giving history and communication preferences at a glance, the difference between a donor renewal email that feels personal and one that obviously came from a mail-merge.