United States: All Eyes On Performance: How To Make Data Analytics Work For You

Last Updated: December 13 2017
Article by Kelly H. Buchheit

Your not-for-profit organization is accountable to many constituents, including donors, volunteers and the people you serve. A surefire way to demonstrate your effectiveness is through the use of data analytics. With facts at your fingertips, your organization can show the world how you are meeting your goals in community outreach, program activities, fundraising and more. Data analytics can also help you in daily decision making and strategic planning.

If you have not done so already, it may be a good time to get started on a full program or to revisit your current use of data and metrics.

Collect Valuable Information

Data analytics is the science of collecting and analyzing sets of data to develop useful insights, create connections and recognize patterns that can lead to more informed decision making. More importantly, data produces metrics that reflect past and current performances that may also help strategize for future years. For example, your organization may want to analyze its program effectiveness using membership renewal rates. By analyzing the demographics of its current and lost members, you can determine what membership benefits are important. This data may be used to develop defined strategies for returning past members and obtaining new members.

The data analytics process incorporates statistics, computer programming and operations research. The data can come from both internal and external sources. Internal sources include an organization's databases of detailed information on donors, beneficiaries or members. External data may be obtained from government databases, social media and other organizations.

Focus on Your Goals

There are several potential advantages of data analytics for not-for-profits, which often operate with limited resources. Data analytics can help to:

  • Validate trends;
  • Uncover root causes of problems; and
  • Take a holistic view of its performance.

When used effectively, data analytics can allow the management team to focus on your organization's primary objectives and improve performance in a cost-efficient way.

For example, data analytics can serve a double-barreled purpose when it comes to fundraising. First, it can provide a way to illustrate accomplishments to potential donors who request evidence of program effectiveness. In addition, analysis of certain data may make it easier to target those individuals most likely to contribute to help grow your donor base.

Initiatives to streamline operations or cut costs can create concern and controversy within your organization. However, data analytics facilitate fact-based discussions and planning. For example, the ability to predict outcomes can support sensitive programming decisions by considering data from various perspectives, such as at-risk populations, funding restrictions, past financial performance, grant-maker priorities and offerings available from other organizations.

Plan the Process with Care

Are you intrigued by data analytics and want to take the next step to implementation? If so, it is important to not put the cart before the horse. Avoid purchasing costly data analytics software and then trying to decide how to use the information it produces.

While new technology may be a good idea, your organization's informational needs should dictate what you purchase. Thousands of potential performance metrics can be produced. This means that you must take time to determine which financial and operational metrics you want to track, both now and down the road. Which of your not-for-profit’s programs are the most important? Which metrics matter most to your board and donor base? Which metrics can truly drive decisions? How can you actually use the information?

Additionally, you should determine how well the technology solutions you are considering can integrate with your other applications and data. If software cannot access or process vital data, it will be a poor match for your needs.

Lastly, you should ensure that the technology solution you choose complies with any applicable privacy and security regulations, as well as your organization's ethical standards.

Last, but not Least

While data analytics frequently brings to mind the technology involved, do not forget about the human element. You may have the latest software, but without staff and leadership buy-in, data analytics could be an expensive lost cause.

All this being said, introduce data analytics to your organization thoughtfully. Ensure that everyone understands the process and the objectives. Lastly, remember that follow-through is essential. Even highly relevant information will be of little use if the Board of Directors, management and staff do not recognize its benefits and act on it intelligently.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Kelly H. Buchheit
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