The Importance of Data in Nonprofits
By: Benjamin Chou
From “big data” to “data analytics,” people hear buzzwords featuring data on a daily basis. More and more businesses and organizations have started to use data to make decisions. Within The Berkeley Group, more and more of our projects and research articles now incorporate data to drive and support articles and strategies. Another great example of this would be the purchase of Tableau, which is a platform that provides data visualization and analytics services, by Salesforce of 15.7 billion dollars a few years ago.
However, this technology is greatly underused in the nonprofit sector. A report from Nonprofit Hub states that only 5 percent of the nonprofits use data in every decision they make. In addition, only 29 percent of the nonprofits use the data collected on websites to optimize their websites. Why is this? From the same paper, nonprofit hub states that 79 percent of the nonprofits claim that there is simply no time or personnel to focus on data. The paper also claims that 55 percent of the nonprofits state that their personnel simply does not have enough experience in data for them to use more data in their decision making. Aside from personnel and time issues, there is also a great discrepancy in resources that the nonprofit own to do data analysis, as most of the services currently available come with a cost. Around 42 percent of the nonprofits state that they simply don’t have the tools to do analysis.
How should nonprofits be more involved with data?
Data has a wide range of utility, including analyzing for strategy, finances, and human resource management. Before even starting with using data analysis tools, your organization needs to strategize on what kind of data you want to track and analyze. For example, your nonprofit may choose to focus on understanding donor information and profiles, determining whether or not you are making the impact you wish, or simply managing your finances.
After your organization decides on what data is most relevant and important, the next step is simply to start collecting the data, followed by deciding which database to store the data in. For nonprofits, a great introduction to databases would be CRM (customer relationship management) databases. CRM databases not only provide services in human resources management, but also offer nonprofits a method to manage donor information. Utilizing a combined platform such as a CRM database increases efficiency and cuts the cost of the donor retention process by gathering all the information in one place.
An essential part of storing and collecting data is maintaining data integrity by cleaning your data regularly. This could be done through having a set method in collecting and inputting the data. By doing so, the dataset would be clean — with no unnecessary or inaccurate information, it becomes easier to find the necessary information. Furthermore, it is also important to include everyone when using data, so that data can be seamlessly integrated into your entire organization and efficiency can be increased. By allowing everyone to be exposed to data, your employees will also be more willing to accept further implementation of data in different aspects of data.
When utilized properly, data can open a new perspective for nonprofits that allows organizations to strategize more creatively and efficiently. As mentioned throughout the article, data technologies are used for more than just simply analyzing the data —they are also important in finding ways to correctly execute the outcome of the analysis. Through leveraging and utilizing data-related technologies, nonprofits will be able to bolster and expand their impacts.
