A Guide to Data Management for Nonprofits: Tools, Resources, and Tips
Sometimes, a nonprofit can find success a double-edged sword.
Many nonprofit organizations are able to handle well enough the basic tasks of creating and maintaining inventories, employee records, and accounting logs, but they probably aren’t benefiting as much as they could from the valuable data they hold about their clients, donors, and volunteers. There’s so much that nonprofits can offer their communities once they have developed and implemented a complete data-management plan. But where to start?
Every organization, whether for profit or not, must keep accurate and complete records to run efficiently. However, no modern operation can succeed without going beyond simple recordkeeping and establishing an effective data-management plan; one that is customized to its unique needs. Fortunately, tools and techniques are readily available to help nonprofits extract maximum value from their data assets and apply data-management technology to achieve their goals.
Why Is Data Management Important for Nonprofits?
Nonprofits thrive by establishing strong relationships with their supporters, devising innovative ways to engage with the public, and encouraging donations. A comprehensive nonprofit data-management strategy contributes to the success of all three endeavors: it lets the nonprofit maintain close ties with contributors by personalizing interactions, it opens new avenues for reaching out to members of the community, and it supports marketing efforts intended to boost contributions and other forms of support.
Help Secure Vital Data
The cornerstone of a nonprofit organization’s data-management plan is to treat its data assets with the same care and caution that it applies to its financial and human resources. As the Stanford Center on Philanthropy and Civil Society points out, nonprofits are being transformed into “purpose-built institutions designed to dedicate and protect digital and analog resources toward public benefit.”
The challenge of protecting sensitive data is complicated by the natural tendency of information to propagate across digital platforms. Yet working through the maze of data-protection regulations is beyond the abilities of many nonprofits. This is especially true when the data relates to children, health care, finances, and legal matters, all of which are subject to strict regulation. To minimize the risk of losing sensitive data in a breach, nonprofits should collect only the personal data they need to operate, and they should delete that data as soon as it is no longer needed.
To protect personal private information that is retained, nonprofits must encrypt the data when it is stored, and strictly control access by parties within and outside the organization. Most importantly, the organization must train all managers, employees, and volunteers that data security is everyone’s responsibility. They must know how to identify sensitive information and ensure it is safeguarded when it is stored and accessed via computer or other devices.
Create Insights and New Opportunities
The more a nonprofit knows about its donors, volunteers, and clientele, the more effective it can be in engaging with them. DNL Omnimedia, a company that offers technology services to nonprofits, explains that by analyzing its data, a nonprofit can craft fundraising campaigns that reach more potential donors and motivate them to increase their contributions. By integrating a donor database with social media, for example, fundraising can be customized for specific audiences.
By applying a customer relationship management (CRM) system, nonprofits can improve their interactions with donors, clients, and volunteers by tracking which forms of outreach are most effective on an individual level. For example, a CRM can indicate when an email was opened by a contact, which links were clicked, and which direct mail campaigns received the best response.
Indicate What May Lie Ahead
It isn’t uncommon for a nonprofit to create a strategic plan, set it in motion, and then file it away for a year or more, making no attempt to monitor the plan’s progress. BoardEffect, which sells technology services to nonprofit boards, describes how technology can be used to link a nonprofit’s short-term goals with its long-term plans. The first step is to conduct a SWOT analysis that determines the organization’s strengths, weaknesses, opportunities, and threats.
Once the nonprofit understands its current status and how it is perceived by people inside and outside the organization, it can begin to plot its long-term objectives, keeping in mind that the plan will need to be modified as conditions change. With the long-term goals established, the organization can use a planning tool to devise a strategy for the short term that has at its center the goals for the future. The planning software can also be used to remind the nonprofit’s board and management team to include a brief discussion of the long-term plan during each regular meeting.
Make a Stronger Impact
Another challenge facing nonprofits is determining the effect of their efforts on the communities they are committed to serving. The National Council of Nonprofits describes the growing importance to nonprofits of focusing on “outcomes” rather than “outputs.” Once a nonprofit has put its plans in motion, it needs to regularly measure the plans’ progress toward the organization’s goals. The results of the outcome measurement must be communicated inside and outside the organization to demonstrate that it is living up to its commitment to donors and clients to be as effective as possible.
Technology can be used to evaluate a nonprofit’s performance on a near-continual basis, adjusting operations as necessary to improve its effectiveness. For example, resource management tools enable nonprofits that are struggling with declining budgets to get more out of their existing assets while also demonstrating their fiscal restraint. Running a nonprofit that makes a big impact on its community without squandering resources is one of the best ways to attract more resources and talent, which improves the organization’s sustainability.
Data Management Tools and Resources for Nonprofits
A nonprofit’s data management wish list would ideally include the following: the ability to determine which of its programs and fundraising efforts are most successful (and why); more effective two-way communication with supporters, partners, and clients; and a method for identifying prospects for future fundraising campaigns. These and other capabilities are now more accessible to nonprofits than ever before. Here’s a rundown of services and technologies that can enhance a nonprofit organization’s data management operations.
Gather and Analyze Data
Getting the most benefit possible from modern data-management tools isn’t about collecting and analyzing massive amounts of data — it’s about having the right data available to the right people at the right time. Transforming raw data into actionable intelligence requires the application of advanced data analytics tools and techniques. Fortunately for cash-strapped nonprofits, many of these capabilities are available without having to hire a data scientist.
The leader in providing web and mobile-app analytics services is Google Analytics, which provides organizations of all types and sizes with detailed information about the people who connect with them digitally. The free version of the service features Google’s AdSense online advertising for websites, Google Ads for placing ads on other sites, and the Search Console designed to help a website appear higher in Google’s search listings. The commercial Analytics 360 product is intended for large companies. It adds more sophisticated ad management as well as end-to-end campaign management, among other features.
Advanced data-analytics approaches include the following:
- Descriptive analytics is defined by Investopedia as the analysis of historical data to determine how an organization has changed. Examples include year-over-year revenue changes, the number of clients served month over month, and changes in revenue per donor.
- Diagnostic analytics attempts to answer the question, “Why did it happen?” by using techniques such as drill-down, data discovery, data mining, and correlations, as Gartner explains.
- Predictive analytics takes analysis further by making predictions about the future via application of statistical algorithms and machine learning to historical data. Data service provider SAS points out that the technology becomes more viable as the quantity of available data increases, processing power drops in price, and analytics software becomes easier to use.
- Prescriptive analytics is the latest development, promising to go beyond predicting future events to recommending actions. This is accomplished by applying artificial intelligence methods to historical data. As Investopedia explains, prescriptive algorithms are designed to automatically adjust to changing conditions.
Map and Project Insights
Among the companies that are taking novel approaches to data management is Tableau, which attempts to make databases and spreadsheets easier to understand by replacing the standard chart approach with visualizations. For example, the desktop version of the product uses a dashboard interface that enables people to drag-and-drop various views of data to generate different versions of reports and forecasts. The Tableau Data Management add-on makes sure the data being analyzed is accurate and up-to-date, helping make a nonprofit’s do-it-yourself analyses as simple, fast, and useful as possible.
Use the Cloud for Data Management
The biggest name in databases is Oracle, which has dominated the enterprise data-management market for decades. The new Oracle Cloud Free Tier provides any organization with two Oracle Autonomous Databases, two Oracle Cloud Infrastructure Compute virtual machines, and free access to the company’s powerful data analytics tools (including Oracle Application Express and Oracle SQL Developer). When an organization signs up for Oracle’s free data services, it also receives $300 in free credit for 30 days of access to application prototyping and other developer tools.
Panoply uses an approach to data management that is entirely cloud based. Its product uses a straightforward dashboard interface to instantly present various views of data. After an organization uploads its data to the service, it is ready to apply advanced analytics without having to be versed in SQL or any other database language. Panoply features links to other application programming interfaces (APIs) and business intelligence products for easy integration.
Secure and Protect Data
The first phase of any data security plan is to discover all the data an organization has. The ISACA Journal describes the various categories of data discovery tools that are designed to help companies gather and consolidate their data stores, prepare the data for analysis, and stop data leaks by preventing sensitive information from being stored or shared outside the organization via the application of business rules.
Among the other important data security tools for nonprofits are password managers that prevent unauthorized access to protected data, encryption tools that protect data when it is stored and transmitted, and network monitors that include firewalls and intrusion detection.
The legal publisher Nolo highlights the importance to nonprofits of having a document retention and destruction policy to avoid attracting the attention of the U.S. Internal Revenue Service. Other types of governance policies that nonprofits should adopt include conflict of interest; gift acceptance; and guidelines for their chapters, branches, and affiliates.
Data Management Tips for Nonprofits
Effective data management for any organization begins with a plan: What information do decision-makers need to help the nonprofit reach its goals? What are the most effective and affordable ways to make sure they have this information in a timely manner? How can the organization prepare for unforeseeable changes in the future? Once the organization has a roadmap of its data management journey, it can start to assemble the pieces of its information strategy.
Understand What Data Can and Can’t Do
One of the data management myths dispelled by Forbes is that all the data an organization collects can be used to extract valuable insights into its operations. In fact, most databases are composed primarily of transactional data created to support specific applications. Such data can be used to track changes over time, but most transactional data loses its significance when it is taken out of the context of its host application.
Much of the data stored by organizations is redundant; the same data replicated in various apps and subsystems. In addition, much of it is unreliable. It can be old, corrupted, or flat-out wrong. There is no magic-bullet software that can fix these and other problems, such as extracting useful data from closed, siloed systems. A nonprofit’s data management plan must account for the limitations of the data and of the tools used to gather and analyze it. It is counterproductive for an organization to devise highly optimistic goals for its data analysis that are unrealistic or simply unachievable.
Look for Unexpected Insights
Organizations of all types have to be alert for opportunities that can happen seemingly by chance. In fact, a nonprofit’s approach to data management should be agile enough to accommodate changes in direction based on what is discovered by data analysis efforts. For example, Microsoft offers a free version of its Microsoft 365 Business product. This tool enables nonprofits with 10 or fewer users to create an integrated data-management system that takes advantage of NetHope’s IDEA Journey, which is described as “a nonprofit standard for accelerating digital transformation.”
The IDEA Journey Resource Guide describes the IDEA social impact accelerator, which is composed of multiple steps, the most important of which are Imagine, Design, Execute, and Assess. The NetHope Solution Center provides case studies of the successful application of the IDEA Journey process by several nonprofits. It also provides information about participating in an IDEA Journey coalition. This coalition is where NetHope members, sponsors, and stakeholders join together to share strategies on such topics as donor reporting, securing data resources, preparing for disaster, and best practices for data collection.
Anticipate the Organization’s Future Data Needs
The fast pace of change in technology and in society in general makes preparing for the future more important than ever for nonprofits and other organizations. One way nonprofits can be ready for whatever the future may hold is by ensuring all of their data is in a form that facilitates advanced analytics. As Forbes points out, data scientists currently spend much of their time converting various data types into formats that facilitate analysis.
The true value of a nonprofit’s data-management plan is that it serves as a blueprint for the organization’s conversion to a “data culture” operation. The data that is the lifeblood of the organization must be ready for analysis from the moment it is collected. It must be error free, consistent, unambiguous, up-to-date, secure, and accessible by the people who need it, when they need it.
Nonprofits that successfully complete their digital transformation are primed to thrive in the future. Those that lag behind are destined to struggle. Where will yours be?