Pressing Reasons Why Nonprofits Need to Switch from Reactive to Data-Driven

In a world focused on looking for ways to increase revenues and profits, nonprofits and NGOs provide a breath of fresh air as their primary focus is on humanitarian service.  Investment in technology at non-profits has always been of secondary nature. But with the changing times, and increase in humanitarian needs around the globe, there has been a clamor of late for these non-profits to be nimble and adaptable to the ever-changing global ecosystem.

So, how does this translate to data being a catalyst for change?  

A data and analytics mindset helps nonprofits anticipate and address the demands of global events proactively. This article is an attempt to shine a light on how data and analytics empower nonprofits and turn them into data analytics-based decision-making enterprises.

The million-dollar question: Where to start?

The answer lies in answering this key question – how do the leaders of nonprofits want to be better prepared for global events?  

Due to aging technology and data infrastructure in most non-profits, the responses to global events have been largely reactive. Many of these organizations view data as a means to generate operational reports that keep them afloat. They have not really been able to harness the value of data and analytics to make decisions that impact millions of people globally.

This has resulted in issues such as (and not limited to):

• Stagnant membership and volunteer growth

• Inaccurate assessment and assemblage of resources needed to address global events

• Inaccurate assessment of impacts of service projects on humanitarian needs during global events

• Inefficiencies in planning and executing Service Projects.

• Attracting and retaining donors

Forbes has captured ten challenges that nonprofits currently face which are worth mentioning here. Needless to say, many of these issues are solvable using data and analytics. However, of late, the leaders have started questioning this rationale.

They have started recognizing that true impact on global events can be achieved by treating data as an enterprise asset that will help them address their key objectives.  One example of how better data improves humanitarian causes can be found in this article by Saloni Dattani and Fiona Spooner (2022) — “We need more testing to eradicate polio worldwide.”  

Rotary International (a large global humanitarian services organization based out of Evanston, IL, USA) is a shining example of how it is using data and analytics to transform itself into a data-driven decision-making enterprise.

After years of stagnant membership growth, the company is beginning to turn around largely due to embracing data as a digital asset and using analytics to drive membership growth and service project improvements.  

How are Rotary and others like them turning themselves around? Besides the investments in technology improvements, they are also beginning to focus on data and analytics with the realization that progress can be made by taking some key strategic steps such as:

1. Creating a business analytics culture by instituting an enterprise-wide data literacy strategy

2. Identifying and building data solutions around core domains that address the enterprise’s Objectives and Key Results (OKRs)

3. Embedding business analytics capabilities in their digital products to measure KPIs around the core domains

4. Modernizing data and analytics delivery platforms and processes

5. Setting up organization and process for data management, security, and governance

6. Setting up an effective data and analytics organization structure that provides the best outcomes

One may argue that this is nothing new, and every organization will do this. The difference, however, lies in the measurement and assessment of the impact. While for-profits will be looking for growth and revenue targets, non-profits will be looking for the impact of their service projects on the people and communities they serve, and measure if they have the necessary members and funds to carry out the projects.

So, where does this take us, and how do we answer the million-dollar question?

The answer lies in metrics and business analytics that measure the impact that non-profits make in the communities. Data and Analytics can answer questions such as:

• Do we have the members and volunteers to address localized community needs?

• Do we have the funds and grants necessary to carry out the projects?

• Why are we not able to attract and retain members, what motivates them?  

• How do we personalize content based on a member's interests and motivations?

Why is it essential to build data and analytic literacy in non-profits?

The key to ensuring analytical maturity in non-profits is building data and analytic literacy across the enterprise. To put it simply, Data Literacy is the ability to collect, store, manage, and use data effectively to carry out a job function or role.

Building a data-literate organization is a deliberate and involved process that requires careful planning and execution.

Rationale for the establishment of Data Literacy

According to Mary Basani, Director of Digital Product Delivery at Rotary International: “The key to building analytic culture is to educate the workforce on the ways by which data and analytics affect the quality of service that we provide our global communities.  This can be done by piloting an analytics program in one business area and derive insight on how it is helping in decision-making and the desired outcome. This increases the appetite for analytics and insights throughout the enterprise.”

She further views analytics as the cornerstone of the success of Rotary’s mission and has embarked on the journey of enabling business analytics in each of the product domains at Rotary.

Establishing data and analytics literacy in nonprofits is essential to realize the following benefits:

• Non-profits around the world have been trying to get “ahead of the curve,” by trying to anticipate humanitarian needs. To achieve this, they will need to analyze massive amounts of internal and external data, create predictive models, and derive value-added insights.

• Large numbers of volunteers and members are needed to address needs on a global scale. Building 360-degree profiles of individual domains (including user behavior in navigating the websites, products, and social media) will help attract members.

• Analyzing the behaviors of current and potential donors will foster the attraction and retention of donors.

• Analyzing regional patterns in membership retention and attrition will, in turn, provide solutions for increasing membership.

Nonprofits are handicapped by a perception that technology and data are irrelevant to running their business. This perception will need to be broken by showing the importance that data and analytics play in furthering the mission. There is a global need for humanitarian services now more than ever before.

Data and Analytics play a crucial role in ensuring that the services are carried out unhindered, and the positive impact of the services is felt worldwide.

About the Author:

Anand Ramakrishnan is the Director of Data Engineering at HUB International. Prior to taking on this role, he was the Director for Enterprise Architecture and Data Engineering at Rotary International, a global nonprofit organization with a mission to provide service to others, promote integrity, and advance world understanding, goodwill, and peace.   

Ramakrishnan has 35 years of experience focused on helping enterprises deliver value added outcomes. He is passionate about exploring innovative ideas in bridging the gap between customers, business, and technology by leveraging data and analytics.