As data management projects keep expanding across industries in tandem with AI implementation, nonprofits and other organizations can’t overstate the importance of data literacy — the ability to collect, store, manage and use data effectively to carry out a job function or role. In fact, 86% of leaders “believe data literacy is important for their teams’ day-to-day tasks,” notes DataCamp’s 2024 State of Data & AI Literacy Report.
Nonprofit organizations, however, may be undervaluing data literacy, according to some observers.
“While 90% of nonprofits collect data, only 5% of nonprofits use data in every decision they make,” says Tim Lockie, CEO of The Human Stack, on the Nonstop Nonprofit podcast.
This may signify a significant data literacy gap in the sector that nonprofits would do well to rectify, especially as they seek to use data to better empower their staff, measure outcomes and allocate resources.
Here are three reasons nonprofits should consider placing a greater emphasis on data literacy training.
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Data Literacy Enhances Nonprofit Program Effectiveness
The more data literate an organization is, the better it can collect, store and manage its data and leverage the analytics and insights that stem from it. Data literate organizations are simply better equipped to make accurate decisions across departments.
This is particularly important because many nonprofits often have limited finances, staffing and other resources with which to meet their missions. Data literacy allows nonprofits to do more with less, enabling staff to analyze program performance, understand community needs and allocate resources more effectively. Plus, it helps ready the robust data many grantmakers require as proof of an organization's impact. So, a data literate staff can better compile compelling evidence-based reports to secure funding and meet compliance standards.
Notably, such benefits are best realized when everyone in an organization is data literate. As IBM frames it, “Data literacy is a competency everyone needs, not just scientists. … A data literacy program is successful when your teams can translate the data into compelling, visual stories that stick with people and transform data into actionable knowledge and concrete business results.”
Data Literacy Builds Trust Among Nonprofit Stakeholders
In a digital age, when people are increasingly anxious about how organizations collect and use their data (let alone their money), it’s imperative for nonprofits to clearly communicate what they will do with donor and mission-specific data. This transparency can help build credibility with donors, board members and beneficiaries, fostering stronger relationships and increased support — especially when this data helps tell the story of how a nonprofit is driving tangible impact.
A OneCause study found trust to be a core donor motivator and expectation — and data is what proves the impact donors judge nonprofits by, in turn affecting their donation decisions. The study found that 48% of donors gave in part because they believed their donation made a difference, and 38% gave in part because it was clear the organizations used raised funds wisely.
Even with all the data in the world, however, nonprofits won’t be able to fully demonstrate their impact and build stakeholder trust without a certain level of data literacy. As the Data Literacy Project details, “With the volume and velocity of data in the world today — investing in data literacy training is as important as investing in technology.”
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Data Literacy Future Proofs the Nonprofit Workforce
Data and AI skills already account for four of the seven fastest-growing skills leaders need from their teams, according to the DataCamp report. And according to Park University, “Any individual or organization who doesn’t utilize data to their advantage will fall behind in the next few years.” So, if nonprofits are to future proof their workforces, they must train their staff to be data literate.
86%
The percentage of leaders who believe data literacy is important for their teams’ day-to-day tasks
Source: DataCamp, “The State of Data & AI Literacy 2024,” May 2024
After all, a nonprofit — like any organization — is only as strong as its people. Having great AI analysis tools, data inputs and other resources readily available means nothing if your team doesn’t know how to use them. Once they learn, however, the impact can have long-lasting significance.
Investing in data skills equips workers to use modern tools and adapt to inevitable technological changes, improving overall efficiency and retaining top talent. By doing so, nonprofits will be prepared to effectively carry out their missions over the long haul.
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