Why is Data Important: Nonprofit Data Management
Over the past few years, "big data" has almost become a household word. From hospitals to classrooms, what was once the business of search engines and financial markets is increasingly affecting every aspect of business and life, and that includes the nonprofit and human services sectors.
So, if you know you’re succeeding at some level and you can see and even count your “impact” with little more than a calculator, why is nonprofit data management important? Why should you consider integrating nonprofit database software into your evaluation and assessment activities?
Nonprofit data management can feel daunting, especially if your organization is small and doesn’t have anyone with nonprofit database management expertise on staff. Often, organizations start their data collection efforts using the most readily available tools – notebooks, spreadsheets, and human memory. While those tools can work for some needs, the lack of efficiency and limited ability to analyze and communicate what that data is telling you is a big problem.
Funders Want Numbers
Ok, so perhaps the most obvious answer to “Why should I be using nonprofit data management software?” is that your funders increasingly want to see a laundry list of statistics as part of your impact and results reporting. Grants from major foundations and federal agencies often have explicit requirements, not only for the kinds of information you need to collect, but even the type of data management system you use.
But, it’s not just about satisfying administrative requirements. Federal and foundation grantmakers care about data because it helps them define and identify the social return on their investment. Outcomes-oriented philanthropists provide funding to nonprofits because they want to affect long-term social change.
Solving individual problems (housing the homeless) and changing individual social systems (streamlining healthcare) are certainly important. But, the real goal is often improving the way the world works for everyone.
Data gives philanthropists the ability to zoom way in to see what is working on the ground and then zoom way out to see how and why change is happening (or not happening) across time and space. In turn, they can use not only their money to support the most successful nonprofits, but they can use their influence and reach to help less successful programs improve.
Nonprofit database software, like Social Solutions’ Efforts To Outcomes Software, gives you the tools you need to communicate detailed, nuanced information to your funders. It also gives you a baseline for analyzing, sharing, and testing best practices and lessons learned. Over time, that ability will help you maximize the impact of funding dollars (and increase your ability to capture more).
Measurement Is More Than Counting
It’s easy to get caught up in just “capturing as much data as you can.” But, data management starts by knowing what questions you want to answer, and perhaps most importantly, recognizing that there are probably a lot of things you don’t even know that you don’t know. Connecting your mission with outcomes data and individual program metrics can be tricky, but when you take the time to do it well, you transform your data management system into a powerful tool for organizational and programmatic performance. In turn, that means delivering on your mission and doing more good.
Implementing strong nonprofit database software also means freeing up manpower to collect qualitative data (i.e., stories) that can’t be captured in numbers. Having robust data analysis tools also helps you identify stories you didn’t know were there. Together, numbers and stories allow you to tell a detailed story about what you’re doing and why it is or isn’t working. The data can validate and add clarity and detail to your instincts and conventional practices. In turn, stories can help you to explore all that stuff you don’t know you don’t know, identify new questions, and refine metrics and outcomes evidence.
Measure, Then Act
Data only matters if it translates into action. That’s why good nonprofit database management processes include time to analyze data and rethink programs in response to data-driven insights. It’s also why it’s so important to not just measure success, but also to track and measure failure.
One of the biggest benefits of implementing nonprofit database software is that it can dramatically shorten the time it takes to collect and analyze data. More than just an improvement in process efficiency, it shortens the amount of time programs are operating under faulty assumptions or wasting resources on ineffective interventions. Not only does that allow your program to find and fix problems sooner, but it also increases the number of people who can benefit from that learning.
Don’t Fear Data
Whether you’re dealing with “big data” or relatively small data, tapping into the power of data-driven decision-making can turn your hard work and good intentions into lasting, sustainable impact. And, at the end of the day, isn’t that why you got into the nonprofit gig in the first place?