Make the Case for Your Nonprofit’s Data and Analytics Initiative
Accelerate your nonprofit organization’s mission.
Nonprofit organizations are collecting more digital data than ever. Many don’t realize there is value in that data. Where do we start on our data journey? What problems do we need to solve?
- Data is not being used to its advantage. Many organizations sit on high-potential, unorganized data but still rely on intuition or perception to make decisions.
- There is a lack of data culture and executive support, with the organization engrossed in the “low pay, make do, and do without” culture.
Our Advice
Critical Insight
View data and analytics as a mission contributor and a digital enabler, not a cost. Building and fostering a data-driven culture will accelerate and sustain the adoption of, appetite for, and appreciation for data and hence drive the return on a data investment.
Impact and Result
Take the first step in the data strategy journey by establishing the value in an accelerated fashion:
- Identify key organizational drivers for executing on an optimized data strategy.
- Illustrate and identify nonprofit data and analytics use cases that align with your mission and strategy.
Leverage the output to gain executive buy-in. The approach is meant to foster a data-driven culture and find the right problems (with the greatest value) to solve.
Make the Case for Your Nonprofit’s Data and Analytics Initiative
Accelerate your nonprofit organization’s mission.
Analyst Perspective
Get your organization excited about data.
Traditional programs and fundraising avenues were disrupted because of the pandemic. Nonprofit organizations were struggling to pivot and were not set up to do so. As nonprofit organizations began to implement digital tools to keep up, it became inherent that they collect more digital data than ever.
What many don’t realize is that there is value in that data. Where do we start on our data journey? How do we gain executive buy-in to leverage data? What problems do we need to solve?
This report is designed to demonstrate the value of data for nonprofit organizations by building a use case repository as the first step in the process. Prioritize these use cases by determining how aligned they are to your organizational context including strategies, goals, objectives, and capacity.
Monica Pagtalunan
Research Analyst, Industry Practice
Info-Tech Research Group
Executive Summary
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Info-Tech’s Approach |
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Nonprofits collect a lot of data. The volume and variety of data is growing exponentially for nonprofits and show no sign of slowing down. Data is not being used to its advantage. Many organizations sit on high-potential, unorganized data but still rely on intuition or perception to make decisions. Lack of data culture and executive support with the organization engrossed in the “low pay, make do, and do without” culture. |
The data and analytics landscape comprises many disciplines and components – nonprofit organizations may find themselves unsure of where to start or what data topic or area they should be addressing. There is a struggle to gain executive buy-in, with difficulty understanding how to get the organization excited to use data. A rush to become data-driven can lead to a reactive and piecemeal approach which fails to deliver real and measurable value to the business. |
Take the first step in the data strategy journey by establishing the value in an accelerated fashion:
Leverage the output to gain executive buy-in. The approach is meant to foster a data-driven culture and find the right problems (with the greatest value) to solve. |
Info-Tech Insight
View data and analytics as a mission contributor and a digital enabler, not a cost. Building and fostering a data-driven culture will accelerate and sustain the adoption of, appetite for, and appreciation for data and hence drive the return on a data investment.
Data-driven programs accelerate transformation
83% of nonprofit organizations that have adopted data and analytics have seen it as a digital accelerator (Accenture, 2017).
Nonprofit organizations are facing unprecedented challenges in the environment that have caused changes to the way they provide services. Nonprofits have experienced pressures such as program disruptions, staffing shortages, decrease in funding, and increased demand for services.
A digitally-transformed nonprofit organization will ensure resiliency while facing external disruptions and internal interruptions. For example, digital giving, virtual events, and conversational AI are all digital areas that have been experimented with to combat changes in consumer behaviors and preferences.
Digital transformation requires being data-driven. Data is the foundational step necessary to support any core organization transformation initiatives. With the addition of digital tools, all of which are flowing with data, this foundation means an organization can build well-honed insights to understand impact and value.
Signals of digital transformation in the nonprofit industry:
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Digital giving is on the rise. The National Museums Scotland, Blue Cross, Save the Children UK, Teenage Cancer Trust, and the Church of England are examples of nonprofits that are adopting contactless donations to maintain and increase funding. Increase in virtual events. Crohn’s & Colitis Foundation, Morgan Marie Michael Foundation, The Zoological Society of Milwaukee, and the Centre Country PAWS are examples of nonprofits that are using live streaming to promote engagement. Leveraging conversational AI. The World Food Program, Africa Farmers Club, Planned Parenthood, and the Fight for the Future Foundation are examples of nonprofits that have launched chatbots to scale their impact. |
Factors that drive a data-driven program
Organizational strategic drivers for nonprofit organizations:
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Organizational Growth Nonprofit organizations want to drive sustainable growth, diversify methods of generating revenue, and improve the brand’s positioning. |
4.4% Increase in contribution to the US economy in Q4 of 2022. |
Constituent Experience Improve your constituent experience to increase funding and support. Key constituents can include members, donors, and consumers of your services. |
47% Nonprofits that reported drop in funding. 53% Nonprofits that experienced a greater demand for their services. |
People and Culture Considering people and resource management by supporting meaningful DEI practices and talent recruitment. |
40% Nonprofits that identify attracting and retaining qualified staff as a top priority. 32% Share of nonprofit workers that are people of color. |
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Operational Excellence Nonprofits want to deliver high-quality programs in the most cost-effective manner while improving responsiveness in problem solving. |
40% Nonprofits that experienced cost cutting in 2021. |
Program Innovation To create, deliver, and maintain an effective program, you must invent and adapt to keep pace with and/or get ahead of competitors. |
60% Nonprofits that created new programs and services for differentiation. 50% Nonprofits that identify growth and scaling as a top concern. |
Risk and Compliance Risk mitigation is a driver to formalize a data strategy if the current environment is outdated and leads to exposure to risk. |
40% Nonprofits that |
Sources: The NonProfit Times, 2021; Philanthropy News Digest, 2022; Association of Certified Fraud Examiners, 2020; UHY, 2022.
Transform with a powerful data ecosystem
With the digital tools your organization has implemented, consider the abundance of digital data you have and the value they provide to your organization.
Source: Non-Profit Sector Data Projects, 2023.
Rely on data-driven decision making
Avoid gut checks and anecdotes.
Unaware of the value of data?
#1 Your nonprofit organization requires a change in culture.
Being data-driven is crucial but the organization doesn’t see its value. A data-driven culture is developed through a shared goal. Start with the mission of your nonprofit organization. What is the purpose of your organization’s existence? Who do you service? Use your mission to frame what being data-driven means and to figure out the value you need to deliver with data.
#2 Your nonprofit organization needs to get past the data hype.
There has been hype around data, but it hasn’t always been delivered effectively. Although the organization desires to adopt a data-driven approach, they lack a clear approach. Attempting to hastily become data-driven without a well-defined data strategy may result in an inadequate and disjointed approach that falls short in providing tangible and quantifiable value to the business.
5% of nonprofits use data in every decision they make (Nonprofit Hub, n.d.).
92% of organizations believe that people, business process, and cultural aspects are the principal challenges to becoming data-driven (Forbes, 2021).
Value delivery is the first step toward a data-driven ecosystem
Start asking the right questions.
90% of nonprofit organizations indicate they’re collecting data.
50% of these nonprofit organizations say they aren’t fully aware of the ways data can (and does) impact their work.
Source: First Republic Bank, 2016.
Value delivery involves the development of actionable insights. Collecting data is useless unless you transform them into business insights that deliver value.
Starting with other data challenges will have the opposite effect. Not all data problems are equal and worth solving in delivering business values. Many nonprofit organizations do have trouble with siloed data, data quality, volume of data, variability of data, visualization of data, etc. However, organizations that struggle with a data and analytics initiative don’t know what questions to answer and end up wasting money buying expensive platforms and resources.
Pinpoint the need and define your questions. Establishing what value your investment will deliver is crucial. Ensure it supports the business strategy, enables business capabilities, and empowers digital transformation.
Value delivery can drive momentum
Articulating the benefits of data goes a long way.
21% of nonprofit organizations started tracking donor data within one system.
89% of these nonprofit organizations say the results were impactful to their fundraising approach.
Source: Salesforce, 2021.
7% of nonprofit organizations have increased their average time spent on data.
30% increase in the ability to address problems by using data as evidence.
Source: Data Orchard, 2021.
“Being data-driven is a daily discipline, but better outcomes make it a worthwhile endeavor.”
– Kristen Jaarda, VP and Board Member, American Council on Gift Annuities.
Source: Forbes, 2022.
Consider SickKids Foundation’s value delivery journey
Start small to generate value.
“Make sure the juice is worth the squeeze.”
– Rishie Singh, Head of BI & Data Science for SickKids Foundation.
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Info-Tech Insight
SickKids Foundation’s data initiative was a top-down decision. Most nonprofit organizations will experience bottom-up justification to gain investment. Regardless, demonstrating value was just as important to SickKids to prove their investment was worthwhile. Every nonprofit organization will need to succeed in value delivery.
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Unlock Sample ResearchContributors
- Rishi Singh, Head of BI & Data Science, SickKids Foundation
- 1 anonymous contributor