Have you ever heard a leader say, "I trust my gut” when they had to make a decision?
Leaders who primarily trust their intuition have a greater chance of making less that idea decisions. In a world where data is everywhere and accessible, nonprofit leaders must adopt new skills to use it to inform their decisions. Donors, volunteers, and audiences are already giving you a great deal of critical information through personal and behavioral data.
Nonprofit leaders who make data-informed decisions have an easier time identifying obstacles and opportunities. Data enhances outcomes, efficiency, and impact, and accelerates agility for your organization.
Successful nonprofit leaders tend to use both intuition and data to move their nonprofits forward and have success as a leader by harnessing the power of data.
The Case for Data-driven Decision Making
Data-driven decision-making is the process of collecting data and using it to inform your decisions and verify a course of action.
You have three distinct advantages when you make data-driven decisions:
- Increased confidence: When you look at data you remove subjective influences. Visualizing and using information gives you the confidence to commit to a vision or strategy.
- Becoming proactive: Data allows you to identify new opportunities and can detect issues before they do harm.
- Improve operations: Prevents wasting time and money on projects and expenses that lose money.
Data provides new and unique insights, making you more initiative. It helps inform strategies for every department, from finance to operations, to fundraising.
Types of Data for Nonprofits
As a nonprofit organization, it is important to collect quantitative and qualitative data. Using a combination of both with help you make the best decisions.
Quantitative data is numerical and measurable.
Qualitative data is descriptive.
Well-rounded data collection will include six sources:
- Donor - name, email address, giving history
- Campaign - event attendance, revenue
- Marketing - website traffic, email open rate
- Financial - expenses, income, cash-on-hand
- Website - bounce rate, click-through rate
- External - demographics, industry benchmarks
Donor, campaign, marketing, financial, and website are internal data. External data comes from sources outside of your organization and these third parties will offer you information related to your organization, your mission, and similar audiences.
Build a Culture of Data-informed Decision Making
Once you acknowledge the importance of data-informed decision making it is time to foster this culture through your organization.
If you are the organizations leader, you are the chief reminder that making data driven decisions is now a cultural value. When everyone uses it for the betterment of the mission you will experience greater success.
This means you may need to offer data literacy courses or workshops, either online or in person. Invite data experts to speak in your offices. You can purchase books on data for your staff to read and then encourage discussions. Allow them to ask questions and provide a safe forum to do so. Consider incorporating the the implementation of data driven decision into your staff and board meetings. As for stories of how making a data informed decision has improved your ability to accomplish your mission.
One of your biggest challenges will come from those individuals who resist change. Let them see you make data-informed decisions, talk to them about why they feel unsure, and acknowledge them when they make strides in the right direction.
Establish a Data Collection Process
To collect data, you need to follow these steps:
- Identify the most useful data for your organization: Assess your goals, resources, and audience to determine what data you want.
- Choose the method: Decide on interviews, surveys, and digital. What tools will you use to manage your data?
- Develop a Plan: Include the type of data, method, timeline, personnel, and any other information.
- Collect Data: Remain consistent and ensure accuracy throughout the process.
- Analyze & Apply: Use this data to inform your strategies, campaigns, and other decisions.
While many nonprofit organizations rely on manual processes to collect information, it will save you time and money to automate the process. Automated data collection produces faster turnaround times, fewer errors, increased cost savings, and higher cost savings.
With data collection, you must also ensure and maintain data privacy and security. This entails working with organizations you trust to keep information private. Conduct thorough research and ask questions before you enter into an agreement. Larger organizations will need to hire data management or IT specialists to keep all of their data secure.
Utilize Data Analysis Techniques
You can use four different types of data analysis techniques for your organization.
- Quantitative Analysis: Uses statistical methods to describe, summarize, and compare data. The type of data you collect will influence your analysis.
- Qualitative Analysis: Organizes data that is non-numerical. It captures user feedback to identify patterns.
- Data Visualization: To make decisions you will need to see the data. Data visualization uses charts, pilots, and infographics to allow quick access to information.
- Predictive Modeling: The next step of data analysis is predictive modeling. This technology analyzes historical and current data to generate a model that will predict outcomes.
Identify Key Ministry Indicators
To help you make decisions with data you will need to define your Key Ministry Indicators (KMIs). A KMI measures progress and performance. You decide what KMI to measure based on your goals and objectives. Once your goals are in place, data will help you monitor and track the progress of your KMIs. Depending on the campaign, the project, or the department you will have different KMIs.
Evaluate your data to benchmark your current performance. Then use it to write new goals and objectives.
Create Data Dashboards and Reports
Data dashboards allow you to see the most important data for you to make decisions. You can customize your dashboards and build filters to show the data you want to see. Your DMS, financial, and HR software, and even your marketing platforms come with dashboards built-in, all you need to do is decide what information you want accessible.
These programs will also allow you to export data to create visualizations and reports. Use automation to build and send you reports daily, weekly, or monthly.
A few types of data to collect and add to your dashboard include:
- Donor information
- Revenue
- Staff
- Campaigns
- Projects
To help leaders read, understand, and make decisions using data, create visually appealing dashboards and reports. Use a combination of graphs and charts to view your data. Some organizations may want to invest in data visualization tools, such as Tableau or Power BI.
Leverage Your Data for Strategic Planning
Look at data as you discuss, review, and write your strategic plan. Data should steer your decisions on goals and objectives to incorporate in the strategic plan. But beyond goals and objectives, data analysis will help you identify trends and guide resource allocation. Data can also help you identify trends with donor, financial, and operational activity. It can tell you where to invest and where to decrease spending based on donor, staff, and volunteer behaviors and interests.
Enhance Program Evaluation and Impact Assessment
Most organizations focus on programs to achieve their mission and to demonstrate success and data can enhance how you evaluate your programs. It will give you an accurate account of your program, measure outcomes, and show you areas to improve.
As you assess your programs, data will give you a clearer picture of what works and what doesn’t. While it is good to have anecdotal summaries from staff, volunteers, donors, and those you serve, data will confirm or deny what people say.
Go a step further and share data to demonstrate impact with your stakeholders.
Data Ethics and Responsible Data Practices
It is not enough to collect and implement data. Your organization needs to understand and consider ethical issues that arise from data usage. In some instances, data in the wrong hands or shared indiscriminately can do more harm than good, but this should not frighten you from utilizing it.
To remain responsible practitioners of data practices, privacy, consent, and security:
- Ensure you research and comply with all regulations.
- Stay abreast of changes to local, national, and global legislation.
- Ask questions.
- Maintain transparent communication with donors, volunteers, etc.
- Always opt on the side of caution.
- Consult an expert if you need more advice.
Your data use should align with your mission. Include a privacy notice that explains your data processing and how supporters can exercise their rights regarding it.
Overcome Challenges and Build Capacity
Data comes with challenges such as how you collect information from multiple sources, where and how to store it, and ways to translate data to your goals. You and your team will need to decide on the best procedures, processes, and tools to overcome these challenges.
To build data capability, you will need to decide what is best for your organization. You could use a large relational database management system or a platform built of multiple components customized for your use.
As data becomes more entwined with your organization you will experience barriers, you need to create a way to access information wherever it resides. For many organizations, this means you need a new organizational structure to be a data-driven operation.
The Data-Driven Decision Maker
By harnessing the power of data, you can make more efficient decisions while reducing risks. You will increase funding and have better relationships with staff and supporters.
Every organization wants to make a meaningful difference in their communities and to do this you must start and end with data. In this day and age, relying on instinct alone isn’t enough anymore. Now is the time to embrace data-driven decision-making. It is a powerful tool to drive organizational success and maximize impact.