The importance of data for small nonprofits

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Many nonprofits have key people who are experts at what they do - people who provide unmatched services for the needs of their community. However, within the same nonprofits, many key staff and volunteers fail to understand some important facts about their organization.

 

 

Can your key people answer the following questions?

  • How many people does your organization serve?
  • How do we show funders our impact?
  • Should a generic or custom thank you be sent to a particular donor?
  • How much in donations can we expect next month?
  • What types of fundraising events should we run?
  • What channel are most of our donations coming from?
  • Are we running too many programs?

All of these questions can be answered with good data. Data can help your organization make better decisions, increase fundraising revenues, increase the efficiency of how your organization runs, and guide your strategy.

In the for-profit sector, which are the organizations leading the charge and dominating their respective fields? The ones that have harnessed the power of data. They do not guess who their customers are; they know who they are, and what they want.

Now I am not suggesting that your organization has to run like a huge tech behemoth; however, there are lessons that nonprofits can learn from other sectors.

Do we really need it?

Data analytics can be overwhelming, especially when you are a small nonprofit. But can you afford not to use it? Data analytics does not have to be scary or time consuming. Anything from screening for your top donors to taking a simple average of your donations received can change the way you steward your donors and lead to larger future donations that will help further your mission. The benefits of data analytics extend far beyond updating your donor database.

Furthermore, you can use data to track not only what’s worked for your organization, but what didn’t work, which can be equally useful. Do you know if a program isn’t working for your organization? When you’re spending critical resources, wouldn’t it be easier to have a way to measure if it is effective or not? Given that nonprofits have limited resources, wouldn’t it be practical to have a way to show which of your programs deserve the most time and money?

In addition to your current efforts, knowing your donor is your best offense. Smaller nonprofits can be nimble and quick in their response to their donor’s needs, whereas larger organizations may require extensive time. By using data, you can harness the power of knowledge by targeting a certain demographic, or identifying your biggest and most frequent donors.

Data in motion

Data analysis isn’t just effective when looking for key donors in your database. If you are an organization where policy is integral to what you do, here’s a great example from the StarTribune on how one nonprofit used data to push policy and make a huge difference:

“Nonprofit Hunger Impact Partners, founded in 2015, wants to feed children in need, but it doesn’t serve meals. Instead, it compares data sets from the Minnesota health, education and human services departments to find neighborhoods and schools where there is high need, but low participation in federally funded meal programs. Then it works with schools and nonprofits to start or expand meal programs”, says CEO Ellie Lucas.

“Nobody was doing was we were doing — looking at the issue from 30,000 feet and trying to drill down and figure out the best strategies,” says Lucas, whose organization co-hosted the national conference in Minneapolis last week.

Since the nonprofit began pushing access to summer meal programs across the state two years ago, the number of sites serving meals has jumped by more than 100 to 662. Summer meals served climbed by 400,000 to 3.4 million. “That’s an additional $1.3 million in federal reimbursements coming to Minnesota just for summer meals”, Lucas says. “Those numbers wow donors and policymakers more than anecdotal talk of hungry kids.”

Building relationships

Now I must make one mention. As much as I love crunching numbers, I realize there are limitations to data. Analytical reports do not, and will never, replace the relationships you build with your donors. Nor does it make decisions for you. However, having the right data can help you target the right donor, and it can help you make better decisions. Think of it as another tool in your arsenal to help guide your organization. At the end of the day, people will gravitate to the stories you tell. Why not let numbers highlight how many people you served, show how your nonprofit impacts your community, or allow you to target a donor more aligned to your mission.

Where do we go from here?

Hopefully this is not too much to digest. The point of this article is not to overwhelm, but to open your mind to another process, and another way of doing things. Maybe this month you can set a goal to track one or two extra metrics. What do they tell you? And more importantly does it provide you enough insight that you can act on it. You want to pick metrics that are directly tied to the goals of your organization.

At the end of the day you’re measuring so that you can act and make decisions that will impact your nonprofit and continue providing incredible value to the communities that you serve.

With over a decade in the financial sector, Rochelle Greaves has used her technical knowledge to help businesses measure key metrics and trends, driving strategic decision making. Currently, as the co-founder and director of analytics and strategy at Story Point Consulting, Rochelle continues to use her skills to help nonprofits increase their fundraising capacity and revenue. You can reach her at info@storypoint.ca.

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