What are your most important goals as a nonprofit leader? Do you want to further the long-term mission of your organization? Boost fundraising? Get your organization onto lists of “top places to work?”
All of the above?
Leveraging data can help you achieve all of these things, yet many nonprofit leaders are missing data-driven opportunities. While 90% of nonprofits gather data, around half aren’t using the information collected to its full potential.
Data-driven nonprofit leaders find that they can optimize how they use their limited resources. They foster a transparent environment where they can trace decision-making back to data points and where donor audiences are well-understood.
The bottom line is that data can – and should – inform the key decisions that further your mission. This article highlights the importance of reviewing data for fundraising, programs, and your nonprofit's culture.
Improve Your Fundraising
What are some of your main challenges regarding fundraising? Like other nonprofit leaders, you may struggle to find the right target audience and keep them engaged once you’ve found them. How do you discover donors who are most likely to support your cause and then maximize their donations?
Access to reliable data empowers you to reach the right donors at the right time. It helps you to understand your audience better – do they have an affinity for your cause? Do they have the ability to donate? What is happening in their lives that makes now a good or bad time to engage with them?
Good fundraising intelligence allows you to personalize your outreach to target the potential donor better. Your communication becomes much more powerful and impactful when you can mention people, pets, places, or events that mean something to the donor.
Additionally, you can identify donor interests and better customize your campaigns to grab their attention. When you’re working with a limited budget for marketing, capturing attention is a big deal. If your nonprofit could target marketing materials only toward the most likely recipients, you could save a lot of money and see a better ROI on fundraising campaigns.
Donor research and CRM software are essential data sources for nonprofits, allowing you to track donors based on specified criteria, including viewing their key interests. You can also note donor history or patterns and use this data to help move them up the fundraising pyramid. For example, you can identify people who have donated more than once in a four-to-six-month period or more than three times in a year and take them through a targeted email campaign.
Improve Your Programs
Analyzing your data can help your nonprofit power up the success of your programs. At a high level, data analysis can help you:
Maximize your cost-effectiveness.
Allocate resources efficiently.
Grow your program base.
Improve monitoring and implementation of your programs.
Help guide future program strategy.
Make so many more data-driven decisions.
Predictive analytics encompasses a variety of data-modeling techniques that nonprofits can leverage for good. Let’s say you run a local food bank. Ensuring you have enough resources available at any given time to support the people you serve is a crucial goal. Predictive analytics can help by forecasting the need for food so that you have an accurate idea of upcoming needs.
Data modeling like this can account for several factors that contribute to the need for your program. For example, what if a large local employer was laying off employees? This hit to the community’s income could impact the need for food banks or other local services. The nuances that data modeling picks up will often help with accurate forecasting. Factors like increased local rents or daycare costs are just a couple of additional examples that data modeling weighs.
Data analysis and visualizations uncover patterns that you can use to allocate your resources and make informed decisions. You can identify populations, individuals, or areas that may require your assistance. For example, The University of Chicago's Data Science for Good program used predictive modeling to identify homes in the local area that likely contain lead-based paint, which you could target for repair to reduce lead exposure.
Another example shared by Datakind uses a data modeling methodology called Time Series Forecasting, which Sanergy uses to improve access to safe sanitation. Sanergy has a mission to reach people in dense urban areas who don’t have access to sanitation in their own homes. Their Fresh Life Toilets in Nairobi need to be both available and affordable in order to help avoid the public health risks of poor sanitation. Data gathered on collection volumes helps predict future needs and planned network growth of their toilets.
Foster a Data-Driven Workplace Culture
“Culture” is often conflated with a nonprofit organization's mission, but the two are different. While your mission says what you do and for whom, your culture is more “how we do things around here.”
Organizational culture develops, whether intentionally or not, and nonprofits that choose to foster a data-driven culture can reap multiple benefits. For example, organizations that embrace data tend to be more creative and high-functioning. The data does not constrain them; they leverage it to use their time and resources optimally. They always know how the organization is doing and how the data can help create their future strategies.
Some other benefits include improved transparency and trust. You’re not throwing darts at a board, hoping to strike somewhere near the bull’s eye. You’re nailing the target more often because you have good data to back your decisions. People notice and appreciate the reasoning behind what you do. If someone asks “why?” you’re able to explain clearly.
A discipline of embracing data can lead to a positive workplace culture. A Harvard Business Review survey found that organizations that use analytics reported increased productivity, reduced costs, and displayed faster decision-making.
If you want to reap these benefits of a data-driven culture, simply having the data is insufficient. The data you gather needs action by using it to inform your strategic plan. You’ll need to use it as a driving force toward improved efficiency and effectiveness. In other words, you have to walk the talk. Understanding your data and maintaining a plan to make positive change is one of the first steps to creating a culture that embraces data.
Conclusion
Now, it’s your turn. As a nonprofit leader, it’s up to you to embrace data and encourage others to do so, too. If it’s new to your organization, you don’t have to turn things upside down overnight. Start slowly with a few focus areas you’d like to improve and apply data science.
As an analytical leader, you’ll improve your organization. Analytical leaders have "refined their decision-making processes as part of a data-driven culture and achieved superior financial results.” Additional impacts include attracting more donor dollars and furthering the organizational mission.
There’s usually a happy medium between emotion, instincts, and data science to make informed decisions that will strengthen your nonprofit. Use what you learn to inform your strategic plan so that your organization can continue to build its capacity to effect change.