On a recent summer morning, nonprofit professionals from around Central Ohio gathered at The Columbus Foundation to hear panelists discuss The Fundamentals of Being a Data-Driven Nonprofit.
The panelists were:
- Emily Campbell, Director of Development, Columbus Academy
- Sheri Chaney Jones, President, Measurement Resources Company
- Toni Cunningham, Managing Director, Per Scholas Columbus
- Steve Beshuk, Vice President, Benefactor Group
- Frank Louka, Philanthropy Research Officer, OhioHealth
We started by asking the crowd, “Are you data driven?”
As you can see from the graph, attendees were on the fence when it comes to being “data driven.” In our opinion, 3.3 is a pretty good starting place. It says to us that people see the value in this work and are making progress. It also illustrates that, as a sector, we have an opportunity to improve! A 3.3 isn’t bad, but no one strives for a 3 out 5.
What does it mean to be data driven?
Sheri began by sharing insights from her book, Impact & Excellence. She explained that while most all nonprofit organizations track data, few know if it is the right data—data that allows them to be strategic. To help nonprofits think through the process of becoming data driven, she described the “Five C’s.”
First, an organization must clarify its mission and intended impact. By doing so, it can decide what data to collect. To clarify mission and impact, ask questions like:
- What change will we see in our clients to know our programs are successful? How can we measure that change?
- What data do we need to report to funders?
- What data can clearly communicate our impact to the media?
- What information does our team need to do their jobs effectively?
- What data do other stakeholders need about the organization and its programs?
Sheri also recommended the “Five Why’s” to get to an issue’s root cause. By asking “why” five times in a row, you get past the surface layers of a question and can dive into the most important part of the issue. (Of course, sometimes three “why’s” will do; sometimes you need even more than five.)
Once these and other relevant questions are answered, nonprofit organizations are prepared to move to the Capture stage.
Capturing data can be deceptively difficult. Most nonprofits collect some type of data—but is it the right data? Does it help you answer the questions enumerated above?
If not, then you have a really good idea of what you need to begin capturing. Knowing what data to collect will lead you directly to how to collect it.
Capturing data includes defining the sources, the processes, and the technology that will be required.
Great questions and great data aren’t much use if you keep them a secret. Let’s hark back to our Clarify questions. Each question mentions an audience—funders, staff, media, etc. Now is the time to share with them. Meaningful data is critical to create a compelling narrative—one that inspires donors and the community to support your mission.
Change is hard. Organizations struggle to implement data collection and data-driven decision making. We often hear…
I don’t have time to enter the data.
Will anyone even look at it?
Will the data be used to punish me?
These are common—and fair—concerns. To evolve this mindset, take the time to celebrate. Celebrate success AND failure (aka “learning”). Discover where your organization actually is; identify opportunities to improve.
Toni told a story about how Per Scholas struggled while implementing a new data collection software—primarily because staff members were not invested in its use. Her description of the challenge stuck with us.
Data is currency, and we were bankrupt.
To solve the problem, Per Scholas hired an expert to train staff members and explain the why of data collection. Toni helped her staff see how each person’s day-to-day work related to the organization’s mission. After the training, people were “inspired to want to collect the right data.”
Culture is the soil in which a data-driven organization grows.
To be successful, people must see data as a tool to grow and improve, something to embrace rather than fear. This mindset is created from the top down. Leadership must first believe in the value of data-driven decisions. Once this culture is established, organizations will get better—no doubt. Making data-driven decisions means raising more money, strengthening donor relationships, and fulfilling the ultimate “why”: your mission.
Now that we know where we want to go…how do we get there?
Steve described the types of tools that you might encounter in the journey to becoming data driven…starting with some vocabulary.
- Constituent Relationship Management System – this is your main repository for donor, client, and stakeholder information (i.e., any person or institution with whom your organization has a relationship). The purpose of a CRM system is to accept and store data, but it’s typically not very good at sharing it. To do that, you will need one or more of the following.
- Data Mart/Data Warehouse – a database that is built to make reporting easier. It pulls data from your CRM system(s), and you use one of the tools below to share the information. You don’t actually see a data mart. But, it is the engine that powers “being data driven.”
- Reports – these are the traditional printed-out-and-handed-out reports that we all think of. They are built to a custom format. Reports are often well suited for a specific purpose, but do not have a lot of flexibility. It’s often tricky to dynamically change the report’s look or data.
- Charts, Graphs, and Mapping – these tools allow you to add visualization to reports. They may be a little more dynamic than a custom report, but they are still mostly static. Excel is good at making these.
- Dashboards – dashboards are colorful, designed to be understood quickly, visual, and dynamic. They are built to track how you are doing against your key measures. (Remember the Clarify step?) Dashboards are great for asking dynamic, stream-of-thought questions and visual querying.
- Analytics – the tools above are about understanding yesterday and today. Analytics is about looking to tomorrow. An example would be predictive analytics that help you understand—based on someone’s past behavior—how they are likely to act tomorrow, next month, next year.
Selecting the right tool
Finding the right technology is like picking the right suit. While they all share commonalties (two arms, two legs), the one you select depends on a number of variables. Steve suggested following the following process.
- Weight and prioritize the big three: functionality/usability, cost, and vendor.
- Know thyself: write your requirement “stories.”
- Research and/or send an RFP/RFI/RFQ.
- Demo products and score them.
- Use the requirements to plan your implementation.
For more information about this process, check out this whitepaper: https://benefactorgroup.com/finding-fundraising-crm-software/
- Know what you care about first. It all comes back to Clarify.
- A simple tool you use is better than a slick one you don’t.
- You may already have what you need.
- Most CRM systems (e.g. The Raiser’s Edge) have reporting options.
- Excel—used properly—can be a good option, but be wary of data silos.
- Free or cheap does not mean no cost. It’s free like a puppy is free.
- Ensure your requirements include how the tool gets at your data. (This can be surprisingly difficult.)
- Look at Power BI and Tableau—they are good, inexpensive (or free!) tools.
- TechSoup – software donation program for nonprofits: techsoup.org
- AFP Fundraising Effectiveness Project – afpfep.org
- AFP Connect – discussion forum: community.afpnet.org
- NTEN – Nonprofit Technology Network: nten.org
- FundSvcs – AASP discussion group: fundsvcs.org
- PRSPCT-L – APRA discussion group: aprahome.org/page/prspct-l/home
Special Thanks to…
The following people, in addition to our wonderful panel, were essential in creating this session.
Joyce Ray, Associate Director, The Giving Store and Knowledge Management, The Columbus Foundation
Amy Acton, MD MPH, Community Research and Grants Management Officer, The Columbus Foundation
Dana Mack, Assoc. Dir. Corporate and Foundation Partnerships, The Ohio State University
Dale Abrams, Principal, The Abrams Group