Make the Case for Your Nonprofit’s Data and Analytics Initiative
Accelerate your nonprofit organization’s mission.
Nonprofit organizations are collecting more digital data than ever. Many don’t realize there is value in that data. Where do we start on our data journey? What problems do we need to solve?
- Data is not being used to its advantage. Many organizations sit on high-potential, unorganized data but still rely on intuition or perception to make decisions.
- There is a lack of data culture and executive support, with the organization engrossed in the “low pay, make do, and do without” culture.
Our Advice
Critical Insight
View data and analytics as a mission contributor and a digital enabler, not a cost. Building and fostering a data-driven culture will accelerate and sustain the adoption of, appetite for, and appreciation for data and hence drive the return on a data investment.
Impact and Result
Take the first step in the data strategy journey by establishing the value in an accelerated fashion:
- Identify key organizational drivers for executing on an optimized data strategy.
- Illustrate and identify nonprofit data and analytics use cases that align with your mission and strategy.
Leverage the output to gain executive buy-in. The approach is meant to foster a data-driven culture and find the right problems (with the greatest value) to solve.
Make the Case for Your Nonprofit’s Data and Analytics Initiative
Accelerate your nonprofit organization’s mission.
Analyst Perspective
Get your organization excited about data.
Traditional programs and fundraising avenues were disrupted because of the pandemic. Nonprofit organizations were struggling to pivot and were not set up to do so. As nonprofit organizations began to implement digital tools to keep up, it became inherent that they collect more digital data than ever.
What many don’t realize is that there is value in that data. Where do we start on our data journey? How do we gain executive buy-in to leverage data? What problems do we need to solve?
This report is designed to demonstrate the value of data for nonprofit organizations by building a use case repository as the first step in the process. Prioritize these use cases by determining how aligned they are to your organizational context including strategies, goals, objectives, and capacity.
Monica Pagtalunan
Research Analyst, Industry Practice
Info-Tech Research Group
Executive Summary
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Your Challenge |
Common Obstacles |
Info-Tech’s Approach |
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Nonprofits collect a lot of data. The volume and variety of data is growing exponentially for nonprofits and show no sign of slowing down. Data is not being used to its advantage. Many organizations sit on high-potential, unorganized data but still rely on intuition or perception to make decisions. Lack of data culture and executive support with the organization engrossed in the “low pay, make do, and do without” culture. |
The data and analytics landscape comprises many disciplines and components – nonprofit organizations may find themselves unsure of where to start or what data topic or area they should be addressing. There is a struggle to gain executive buy-in, with difficulty understanding how to get the organization excited to use data. A rush to become data-driven can lead to a reactive and piecemeal approach which fails to deliver real and measurable value to the business. |
Take the first step in the data strategy journey by establishing the value in an accelerated fashion:
Leverage the output to gain executive buy-in. The approach is meant to foster a data-driven culture and find the right problems (with the greatest value) to solve. |
Info-Tech Insight
View data and analytics as a mission contributor and a digital enabler, not a cost. Building and fostering a data-driven culture will accelerate and sustain the adoption of, appetite for, and appreciation for data and hence drive the return on a data investment.
Data-driven programs accelerate transformation
83% of nonprofit organizations that have adopted data and analytics have seen it as a digital accelerator (Accenture, 2017).
Nonprofit organizations are facing unprecedented challenges in the environment that have caused changes to the way they provide services. Nonprofits have experienced pressures such as program disruptions, staffing shortages, decrease in funding, and increased demand for services.
A digitally-transformed nonprofit organization will ensure resiliency while facing external disruptions and internal interruptions. For example, digital giving, virtual events, and conversational AI are all digital areas that have been experimented with to combat changes in consumer behaviors and preferences.
Digital transformation requires being data-driven. Data is the foundational step necessary to support any core organization transformation initiatives. With the addition of digital tools, all of which are flowing with data, this foundation means an organization can build well-honed insights to understand impact and value.
Signals of digital transformation in the nonprofit industry:
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Digital giving is on the rise. The National Museums Scotland, Blue Cross, Save the Children UK, Teenage Cancer Trust, and the Church of England are examples of nonprofits that are adopting contactless donations to maintain and increase funding. Increase in virtual events. Crohn’s & Colitis Foundation, Morgan Marie Michael Foundation, The Zoological Society of Milwaukee, and the Centre Country PAWS are examples of nonprofits that are using live streaming to promote engagement. Leveraging conversational AI. The World Food Program, Africa Farmers Club, Planned Parenthood, and the Fight for the Future Foundation are examples of nonprofits that have launched chatbots to scale their impact. |
Factors that drive a data-driven program
Organizational strategic drivers for nonprofit organizations:
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Organizational Growth Nonprofit organizations want to drive sustainable growth, diversify methods of generating revenue, and improve the brand’s positioning. |
4.4% Increase in contribution to the US economy in Q4 of 2022. |
Constituent Experience Improve your constituent experience to increase funding and support. Key constituents can include members, donors, and consumers of your services. |
47% Nonprofits that reported drop in funding. 53% Nonprofits that experienced a greater demand for their services. |
People and Culture Considering people and resource management by supporting meaningful DEI practices and talent recruitment. |
40% Nonprofits that identify attracting and retaining qualified staff as a top priority. 32% Share of nonprofit workers that are people of color. |
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Operational Excellence Nonprofits want to deliver high-quality programs in the most cost-effective manner while improving responsiveness in problem solving. |
40% Nonprofits that experienced cost cutting in 2021. |
Program Innovation To create, deliver, and maintain an effective program, you must invent and adapt to keep pace with and/or get ahead of competitors. |
60% Nonprofits that created new programs and services for differentiation. 50% Nonprofits that identify growth and scaling as a top concern. |
Risk and Compliance Risk mitigation is a driver to formalize a data strategy if the current environment is outdated and leads to exposure to risk. |
40% Nonprofits that |
Sources: The NonProfit Times, 2021; Philanthropy News Digest, 2022; Association of Certified Fraud Examiners, 2020; UHY, 2022.
Transform with a powerful data ecosystem
With the digital tools your organization has implemented, consider the abundance of digital data you have and the value they provide to your organization.
Source: Non-Profit Sector Data Projects, 2023.
Rely on data-driven decision making
Avoid gut checks and anecdotes.
Unaware of the value of data?
#1 Your nonprofit organization requires a change in culture.
Being data-driven is crucial but the organization doesn’t see its value. A data-driven culture is developed through a shared goal. Start with the mission of your nonprofit organization. What is the purpose of your organization’s existence? Who do you service? Use your mission to frame what being data-driven means and to figure out the value you need to deliver with data.
#2 Your nonprofit organization needs to get past the data hype.
There has been hype around data, but it hasn’t always been delivered effectively. Although the organization desires to adopt a data-driven approach, they lack a clear approach. Attempting to hastily become data-driven without a well-defined data strategy may result in an inadequate and disjointed approach that falls short in providing tangible and quantifiable value to the business.
5% of nonprofits use data in every decision they make (Nonprofit Hub, n.d.).
92% of organizations believe that people, business process, and cultural aspects are the principal challenges to becoming data-driven (Forbes, 2021).
Value delivery is the first step toward a data-driven ecosystem
Start asking the right questions.
90% of nonprofit organizations indicate they’re collecting data.
50% of these nonprofit organizations say they aren’t fully aware of the ways data can (and does) impact their work.
Source: First Republic Bank, 2016.
Value delivery involves the development of actionable insights. Collecting data is useless unless you transform them into business insights that deliver value.
Starting with other data challenges will have the opposite effect. Not all data problems are equal and worth solving in delivering business values. Many nonprofit organizations do have trouble with siloed data, data quality, volume of data, variability of data, visualization of data, etc. However, organizations that struggle with a data and analytics initiative don’t know what questions to answer and end up wasting money buying expensive platforms and resources.
Pinpoint the need and define your questions. Establishing what value your investment will deliver is crucial. Ensure it supports the business strategy, enables business capabilities, and empowers digital transformation.
Value delivery can drive momentum
Articulating the benefits of data goes a long way.
21% of nonprofit organizations started tracking donor data within one system.
89% of these nonprofit organizations say the results were impactful to their fundraising approach.
Source: Salesforce, 2021.
7% of nonprofit organizations have increased their average time spent on data.
30% increase in the ability to address problems by using data as evidence.
Source: Data Orchard, 2021.
“Being data-driven is a daily discipline, but better outcomes make it a worthwhile endeavor.”
– Kristen Jaarda, VP and Board Member, American Council on Gift Annuities.
Source: Forbes, 2022.
Consider SickKids Foundation’s value delivery journey
Start small to generate value.
“Make sure the juice is worth the squeeze.”
– Rishie Singh, Head of BI & Data Science for SickKids Foundation.
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Info-Tech Insight
SickKids Foundation’s data initiative was a top-down decision. Most nonprofit organizations will experience bottom-up justification to gain investment. Regardless, demonstrating value was just as important to SickKids to prove their investment was worthwhile. Every nonprofit organization will need to succeed in value delivery.
Data strategy is an essential component of your data and analytics landscape.
It is a business-led discipline that is underpinned by people, business processes, and cultural aspects, and supported by IT and the data team.
Value delivery sits within your data strategy
A robust and comprehensive data strategy ensures the delivery of value. Your data strategy is the vehicle for ensuring data is poised to support your organization’s strategic objectives.
Phase 1 of Info-Tech’s Build a Robust and Comprehensive Data Strategy blueprint establishes the business context and value of your data strategy:
- Identify the organizational drivers that necessitate or support the case for data strategy optimization/creation.
- Understand your current organizational data culture, as this will be the key to ensuring the fruits of your optimization efforts are being used.
- Establish the vision and mission and define the principles and goals of your organization’s data strategy.
- Build high-value use cases for informing the business case for the data strategy.
76% of nonprofits need to develop a data strategy for their organization (Salesforce, 2021).
Download Info-Tech’s Build a Robust and Comprehensive Data Strategy
Determining use cases is crucial to value delivery
Thirty percent of organizations reported having a well-articulated data strategy ( Harvard Business Review, 2021).
The major step to building a data strategy is to build use cases for informing the business case. Collecting data analytics use cases across the organization is a significant endeavor among cross-functional teams.
Demonstrating benefits is a major hurdle for nonprofits to adopt and implement data analytics initiatives. Building a convincing data analytics business case takes much work. Finding use cases that can justify the cost and deliver business values is often difficult.
Don’t spread yourself too thin. The idea of prioritization is to ensure that your organization can put time and resources into a new initiative with the highest likelihood of seeing value.
Prioritization of the use cases can be difficult among many competing priorities. Some use cases could be too large to tackle where data still needs to be collected or stored – processes must be reengineered and restructured, and teams must be realigned. In other cases, you will see departments envious of other departments because they are chosen for prioritization.
Identify compelling use cases for your departments
Build excitement within various business units.
The engagement between IT and business lays the foundation for a partnership that will be important for garnering buy-in at the highest levels of the organization.
Identify where your stakeholders are looking to create value within the functional/departmental areas of the organization. By doing so, IT will obtain valuable insight into where these business units see themselves improving.
Business Unit View
- Program Development
- Program Operations
- Major Gift & Fundraising
- Marketing
- Finance & Grants
- PR & Community Affairs
- Human Resources
- Administrative Office
Program operations example – water pump maintenance: Can we analyze water pumps? Which water pumps should we focus on servicing based on when these pumps were implemented, how often they were maintained, and which vendor installed the pumps?
Sample use cases for your departments
Start asking the right questions.
Program Development
Can we deliver a remote/virtual program?
How many projects are going on?
Can we compare projects and results by location, team effectiveness, etc.?
Can we forecast the outcomes of this project?
Program Operations
Can we keep consumers of our services informed of the status of the program?
Where do we deploy our resources?
Where do we deploy our inventory?
Can we trace where our assets are?
How can we optimize our resources? Where are our resources underutilized?
Major Gifts & Fundraising
Can we understand segments and sentiments more effectively by studying previous donation data?
How can we find new donors? How can we identify wealthy individuals who can give $150,000 to $1 million?
What are ways to raise awareness for our nonprofit organization?
How can we upgrade and retain existing donors?
How diversified are we when it comes to donations (i.e. corporate partners, government, or individual)?
Marketing
Can we forecast what offers people want to hear and see to create efficiency and cut costs?
What mass marketing campaigns will improve open rates and click rates?
Sample use cases for your departments (cont’d.)
PR & Community Affairs
Who can we partner with to increase publicity and donations and build more engaging stories?
How can we use data to do better storytelling and visualize our data (e.g. icons, heatmap)?
Can we analyze outcomes of events we host?
How do we improve transparency into spend for our constituents?
Finance & Grants
Can we create better budgeting predictions and financially forecast based on our spending and income flow patterns?
Can we get better insight into transactions, spends, and income in real time?
What are the best ways to control expenses?
How should we distribute our grants funds?
Human Resources
How can we retain volunteers and staff?
Can we better track the total amount of time volunteered?
Can we better manage remote employees?
What data can help us achieve diversity and inclusion goals internally and externally?
What’s the most efficient size of the organization to meet increased demand for services?
What data can help ensure employee mental health and well-being internally and externally?
Administrative Office
Can we get clear data that helps plan our day-to-day work activities of the organization?
How can we streamline the admin process?
How can we more efficiently comply with legislation?
Ensure you’re solving the right problems
Your organization will likely produce multiple data use cases to build executive buy-in given the almost infinite combinations of data sources that can highlight new business insight.
Identify the right problems by prioritizing these use cases. Specifically, your organization should leverage those that are considered “quick wins” or “strategic initiatives” as they are considered the right problems to solve. It will be difficult to secure executive buy-in with a project that will offer marginal improvement.
Prioritize by:
#1 Aligning use cases with the six main organizational strategic drivers:
- Organizational Growth
- Operational Excellence
- Constituent Experience
- Program Innovation
- People & Culture
- Risk & Compliance
#2 Determining effectiveness and feasibility
- Problem Statement Alleviation
- Data Readiness
Info-Tech Insight
For nonprofits, prioritizing operational excellence use cases will take on the least amount of risk. However, it may not push enough boundaries to get the organization excited about a data initiative. Consider use cases that drive constituent experience and program innovation.
Prioritize use cases based on your organization’s business context
- Organizational Growth
- Operational Excellence
- Constituent Experience
- Program Innovation
- People & Culture
- Risk & Compliance
Main Organizational Strategic Drivers
Does the use case support the organization’s mission, goals, and objectives?
Does the use case enable business capabilities or empower digital transformation?
Does the use case benefit a constituent or an internal stakeholder?
Does the use case solve a problem we have been experiencing?
Problem Statement Alleviation
Is the problem well-defined and contained?
Do we have to reengineer processes, restructure, etc. for the business problem to be alleviated?
Data Readiness
Does your organization already collect the data required for this use case?
Does the quality of data reflect the readiness?
Is major effort required to clean up the data?
Accelerate your nonprofit data and analytics use case analysis
The objective of this activity is to collect and evaluate a list of potential data analytics use cases. The outcome of this tool is a living repository consisting of a well-evaluated list of prioritized use cases to leverage with the executive leadership team/board of directors.
- Download the Nonprofit Data and Analytics Use Case Tool.
- Populate tab 2, “Setup”:
- Determine the significance of each pre-populated organizational driver. Use your nonprofit’s mission, goals, objectives, and strategies to help make this decision.
- Determine the extent to which you prioritize the effort required to alleviate the problem statement and ensure data readiness.
- Populate tab 3, “High-Level Use Case Intake”:
- Identify use cases that are unique to your organization’s needs and determine the impacted business units.
- Review and update the use case descriptors from column D to column K.
- Review and update the Strategic Goal Alignment and Effort evaluation from column L to column S.
- Review the shortlisted use cases in tab 4, “High-Level Use Case Output,” by refreshing the pivot table to reflect the updates made in tab 3. Only use cases that fall under “Quick Wins” and “Strategic Initiatives,” highlighted in blue, are considered the right problems to solve.
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Participation |
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Download the Nonprofit Data and Analytics Use Case Tool
Solve the right problem strategically
You’ve identified the right problems. By prioritizing use cases, your organization understands which ideas have the right balance of effort and strategy alignment.
Build your business case to help decision makers understand the ROI for your complex project through a cost-benefit analysis. This ensures that your data investment is intuitive, consistent, and defendable.
Present to executive leadership. These activities should demonstrate enough need for your data investment.
Download Info-Tech’s Comprehensive Business Case Analysis Tool
Balance your data initiative with data privacy
Ensure PII, personal data, and sensitive data meets privacy and security requirements.
Cybercriminals want what nonprofits have: data. The most concerning data breach is the leak of sensitive donor/member information. Donors/members are important external stakeholders that nonprofits heavily rely on for their support, and the exposure of donor/member data can impact their trust and confidence in your organization. Consider the following pieces of personal data that your organization collects:
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Traditional PII: Personal identifiable information |
Personal Data: Any information relating to an identified or identifiable person |
Sensitive Personal Data: Special categories of personal data (some regulations, like GDPR, expand their scope to include these) |
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Download Info-Tech’sStrengthen Your Nonprofit’s Privacy and Security Operations
Data does require staff, time, and effort
Determine how your data team will look.
With more data comes more responsibility. Proper resources will be an increasingly important element of any analytics program as it scales. Nonprofit organizations must remember that hiring an internal data scientist is not always the answer. There are alternative solutions such as internal talent and external expertise.
Info-Tech Insight
Nonprofit organizations don’t usually need that much horsepower to hire internal data scientists anyway, as most deal with low and medium complex initiatives.
You’re ready to continue your data journey
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Continue your data strategy by building your data and resources foundation. |
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Understand your current data environment, data management enablers, people, skill sets, roles, and structure. Round off your strategy with effective change management. |
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Download Info-Tech’s Build a Robust and Comprehensive Data Strategy |
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Continue your overall data journey by filling in your gaps. |
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The bulk of your organization’s ability to handle data will rest on how evolved your data and analytics practices are. |
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Download Info-Tech’s Understand the Data and Analytics Landscape |
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Contributors
Rishie Singh
Head of BI & Data Science
SickKids Foundation
Anonymous
IT
Pew Research Center
Jing Wu
Principal Research Director
Info-Tech Research Group
Bibliography
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Bean, Randy. “Why Is It So Hard to Become a Data-Driven Company?” Harvard Business Review, 2021.
Brooks, Spencer. “Death by 1,000 Data Points: Why the Wrong Data is Killing Your Nonprofit.” Brooks Digital, n.d.
Cawston, Rob. “Making contact: Experiments with digital donations at National Museums Scotland.” Muse Web, 2018.
Dykes, Brent. “10 Reasons why your organization still isn’t data-driven.” Forbes, 2021.
Dyshel, Maria. “How nonprofits are using chatbots to scale their impact.” Tangible AI, n.d.
Farmer, Jane. “Data for Social Good.” Non-Profit Sector Data Projects, 2023.
Kearns, Brian. “Nonprofits concerned about growth, insufficient funding, survey finds.” Philanthropy News Digest, 2022.
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- Rishi Singh, Head of BI & Data Science, SickKids Foundation
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