Data analytics is the science of collecting and analyzing sets of data to develop useful insights, connections and patterns that can lead to better informed decision making. It can be enormously useful for nonprofits. For example, data-driven nonprofit Community Solutions partners with local charities to help them reduce, and even end, homelessness in their communities. Among the tools it uses are databases that account for individuals experiencing homelessness and their history, health and housing needs, as well as real-time data on available housing.
But what about nonprofits that don’t have the expertise to pursue tech-driven solutions? If this sounds like your organization, take heart: Using data analytics is easier than you might think. And deploying it successfully can save your nonprofit time and effort over the long term.
Number of advantages
The potential for data analytics is almost endless. It can produce such metrics as program efficacy, outcomes vs. efforts, and membership renewal that can reflect past and current performance and, in turn, predict and guide future performance. Data analytics can also help your organization validate trends, uncover root causes and improve transparency. For example, analysis of certain fundraising data makes it easier to target those individuals most likely to contribute to your nonprofit.
Data analytics typically facilitates fact-based discussions and planning, which is helpful when considering new initiatives or cost-cutting measures that stir political or emotional waters. The ability to predict outcomes can support sensitive programming decisions by considering data on a wide range of factors — such as at-risk populations, funding restrictions and grantmaker priorities.
Finding what you need
Data usually comes from two sources, internal and external. Internal data includes your organization’s databases of detailed information on donors, beneficiaries or members. External data can be obtained from government databases, social media and other organizations. Some basic analytics tools are free or available through non- and for-profit partnerships. But for more sophisticated and powerful functions, your organization may need to spend a little money.
Your informational needs should dictate your data analytics package. Thousands of potential performance metrics can be produced, but not all of them will be useful. So identify those metrics that matter most to stakeholders and that truly drive decisions. Also ensure that the technology solution you choose complies with any applicable privacy and security regulations, as well as your organization’s ethical standards.
Talk to experts
If you have in-house technology expertise or any board members familiar with data analytics, seek their input. Otherwise, talk to data experts for advice. Contact us for recommendations.