Harnessing the Power of Data for Your Nonprofit

Your nonprofit generates a lot of activity, but what you do with this data could have a lasting impact on your mission and organizational sustainability. Analyzing the metrics and outputs of your nonprofit provides invaluable insights into its operational and financial health and drives confident decisions about the future.

Data analytics is a broad term that encompasses a lot of different activities, but they all have one common goal: to improve the efficiency and performance of your nonprofit organization. It does this through identifying key patterns that point to both successes that should be continued and deficiencies that need to be corrected.

If your organization is not already harnessing the full power of data to reach your nonprofit’s goals, it can be overwhelming to consider where to begin. Following these three steps will help get you off to the right start:

  1. Determine which metrics are most important to you. No matter what performance indicator you are trying to uncover, there is a data analytic tool to help you measure it more effectively. Once you identify them, determine which type of data analytic will get you the answers you’re looking for. This could be descriptive analytics (summary of what happened), diagnostic analytics (why it happened), predictive analytics (what might happen in the future), prescriptive analytics (how to improve in the future), or a combination of two or more of these methods.
  2. Ensure the quality of your data. The impact of your analytics process is only as good as the quality of the data feeding into it. Before you begin any data analytics process, it is critical to measure both data quality (the accuracy of the data and how well it fits its intended purpose) and data integrity (the ongoing maintenance and validation of the data). This evaluation should also include an assessment of how well the data is being protected against fraud and loss.
  3. Identify the technology that will work best for your organization’s needs and goals. Contrary to popular belief, data analytics does not always require the most sophisticated and expensive system. For a small organization, even an Excel spreadsheet with the right formulas can generate meaningful information to analyze. Once selected, it is most beneficial to pair the technology with a cost-effective dashboarding software that will present the results in a clear layout and make it easy for your leadership and board to draw conclusions.

Data analytics is not limited to the numbers on your profit/loss statement or balance sheet. With the right tools, data, and processes, you can evaluate metrics as broad as your overall programmatic impact and as focused as the effectiveness of a specific awareness campaign. The most important step is to bring your creativity and flexibility to the process.

This article originally appeared in the July 2022 issue of BBB Foundation News.

Vanessa M. Gordon Vanessa Gordon is a Principal at Grassi and works with clients solely in the Nonprofit industry. She has experience auditing a variety of industries including health care and human services organizations, institutions of higher education, local and governmental units, and religious organizations. Vanessa demonstrates her expertise in the auditing practice area, which encompasses financial reporting, preparation of financial statements and tax preparations. She has... Read full bio

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