Oct 13 2023
Data Analytics

How to Create a Data-Driven Future for Your Nonprofit

Data can help nonprofits find donors, optimize operations and achieve their missions.

Nearly three-quarters of nonprofits are leaning into a digital transformation strategy, according to the Nonprofit Technology Network (NTEN). And with that transition comes an opportunity to adopt a data-driven approach to their work.

This shift — making decisions based on data instead of subjective measures — can pay dividends for nonprofits. It allows IT leaders to guide an organization with more clarity, offers teams real-time analytics to track their progress against goals and gives donors more transparency into the organization’s mission.

EXPLORE: How to streamline your nonprofit operations with cloud-based data solutions.

Why Data-Driven Decisions Give Nonprofits an Edge

When stakeholders both internal (staff, boards, decision-makers) and external (donors, partners) are presented with data instead of opinions and gut feelings, decisions can be led by evidence. This allows nonprofit IT leaders to target select donors, tailor fundraising and shape operations.

“Analytics and automation will empower our leaders to make data-driven decisions,” Guylaine Saint Juste, president and CEO of NABA, a nonprofit for Black business professionals, told PwC about NABA’s turn toward data.

Click the banner to checkout our list of 30 non-profit IT professionals worth a follow.

The Positive Impacts of Data-Driven Models

A data-driven approach has several benefits for a nonprofit. For one, it allows the organization to be governed by objective information.

Second, it supplies IT leaders with more concrete information about the financial health of their organizations. This also helps track progress against fundraising goals.

Third, data analytics also helps to research, identify and solicit donors. Employees can track engaged donors, learn what turns disengaged donors into active ones and identify new prospects.

And finally, a data-driven approach can also break down data silos, enabling more interdepartmental collaboration.

DISCOVER: Find out how these solutions and services can help your organization.

Determine the Right Data to Support Your Goals

Identifying the right data and tools can be a barrier in itself. To start, IT leaders should focus on the data that is most integral to their goals. The next step is identifying where that data lives within the organization. 

For example, if nonprofits are looking to improve their fundraising strategies, look for data relating to donors. Here are some best practices to consider:

Consider the source of your data. Ask which sources of data will give you the insights you’re after, and whether gathering that data is worth the return on investment. Ask for input from all stakeholders, who may have unique perspectives on data sources too.

Understand what tools you need. This varies by organization, but business intelligence tools such as Microsoft Power BI and IBM’s Cognos Analytics have a proven track record of providing 360-degree insights. 

Connect data to business outcomes. “Big Data can be poison or medicine for nonprofits,” Patricia Calazans, founder and executive director of the Daniel Calazans Foundation, tells BizTech. “The difference is to identify the need and the proper dosage.” In other words, data may help IT leaders connect dots, but those insights still need to be applied to the overarching goals of the organization.

Have a Strategy to Promote More Data-Driven Decisions

Since the selection of data is still subjective, relying on human decision-making, nonprofits need a clear strategy for how they plan to use this data. IT leaders can ask themselves what the goal of this data is. What problem will it solve? How can it be used to fill in information an IT leader may need?

Getting buy-in from key decision-makers to align on a strategy may also require a cultural shift. As KP Trueblood, president and COO of the Brooklyn Museum, tells McKinsey, “Building an effective data collection and analysis program is always challenging. It is even more challenging when you are working in a field that historically has a lack of experience with the power of data.”

Developing a data-driven approach takes time and requires years of data collection. It may also mean getting stakeholders on board. But ultimately, it enables IT leaders to deliver on their missions with more accuracy and transparency.

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