Special to the Philanthropy Journal
By Steve MacLaughlin, Vice President of Data & Analytics at Blackbaud
We are awash in data, whether it’s from the reports we monitor, the alerts on social media, or the wearable devices that monitor our every step. When data doesn’t drown us, it certainly can leave us hanging out to dry. We can choose to be overwhelmed by all this data or we can leverage it to do more good in the world. In fact, the problem with data contains the solution.
The corporate world has recognized that data can be a very valuable asset and not worthless exhaust. It’s how Walmart knows to stock up their stores with Strawberry Pop-Tarts® when a storm is approaching and why John Deere uses sensor data on equipment that allows farmers to make better decisions and minimize downtime. This isn’t data science fiction – this is today’s reality.
But why has the nonprofit sector struggled to embrace, utilize, and champion data in similar ways? That was a question that I set out to answer and it forms the basis for my bestselling book, Data Driven Nonprofits. The good news is that many nonprofits are well on their way to using data to drive decision making and results. The bad news is that not every organization understands the value of their data.
HIDDEN TREASURE
Let’s start by acknowledging that nonprofit organizations have a tremendous amount of value hidden in their data. For example, Target Analytics’ research across thousands of nonprofit organizations reveals that a lot of money is being left on the table. The average nonprofit is missing out on $3,781,461 in untapped giving potential. This valuable asset should enrich nonprofits and help them grow. Instead, many get overwhelmed by the flood of data, fail to maintain it, or choose to ignore it all together.
This creates a unique paradox for many nonprofits. In general, when you have something valuable, the more you have of it, the richer you become. Unfortunately, the same is not true for many nonprofits and their data. I call this the Nonprofit Data Paradox: the more you have of something valuable, the less valuable it becomes. Does this happen to all nonprofits? No. Is there something they can do about it? Yes.
HEALTHY HABITS
Following several months of research, I found successful data driven organizations across nearly every sub-sector including higher education, international relief, religious, medical research, healthcare, human services, mental health and crisis intervention, community improvement and capacity building, environmental, and animal welfare. After identifying and interviewing several nonprofits of different sizes, geographies, and missions it became clear what separated overwhelmed organizations from successful ones.
First, successful and data driven nonprofits place value on the health of their data. They make the conscious decision to invest in managing and maintaining the quality of their data. This might seem obvious, but we know from research that nonprofit organizations suffer from bad data all the time. If you start out with bad data, then it only gets worse from there, never better. Data driven nonprofits have healthy data habits.
Second, data is not treated like a foreign object. This is one of my favorite quotes from the book and it comes from Christoph Gorder, chief water officer at charity: water. Gorder said that “data is not a foreign object. Data is just part of what you do. It’s part of the day-to-day fabric of the organization.” This statement encapsulates the mindset of highly data driven organizations. Data is part of the daily workflow and forms the basis for how decisions are made. Data driven nonprofits embrace the use of information to accelerate change in the world.
You’ll notice that neither of those habits — focusing on data health and using data as part of your daily workflow — has anything to do with big data, artificial intelligence, Hadoop, or a long list of buzz words constantly being used. What separates successful data driven nonprofits from those that struggle are barriers that often have nothing to do with technology.
CULTURE EATS STRATEGY
The renowned management consultant Peter Drucker is famous for say: “Culture eats strategy for breakfast.” You can have the right data, the right technology, and the right intentions, but culture will eat your strategy for breakfast, goals for lunch, and tactics for dinner.
The first step is acknowledging that the culture you have is what it is. You may be risk averse. You may be all art and no science. Either your culture has a data problem or your data has a culture problem. That’s fine. Accept it. Embrace it. Then understand that over time the culture of your nonprofit can adapt and change to become more data driven.
The right culture accelerates the use of data and the wrong one will resist change at every step. The good news is that there is no one-size-fits-all when it comes to organizational culture. Instead, there are multiple culture types that create the right environment for data driven nonprofits to take shape and grow.
In Data Driven Nonprofits, I was able to identify at least seven different major culture types that exist among successful nonprofits. As it turns out, successful nonprofits take multiple paths to being more data driven over time.
Culture of Champions: There is support from the organization’s leadership and motivational members of the staff that embrace being data driven.
Culture of Testing: There is a belief that measurable improvements can be made through iteration and testing throughout the organization.
Culture of Change: There is a natural curiosity to try new things and take calculated risks to adapt to changing conditions in the nonprofit sector.
Culture of Sharing: There is a willingness to share data and collaborate to achieve better results and a disdain for creating or maintaining data silos.
Culture of Growth: There is a focus on continuous improvement where success is measurable and visible across all levels of the organization.
Culture of Agile: There is empowerment of people to interact and collaborate that allows them to adapt and respond to a changing environment.
Culture of Data: There is a high value placed on data and it is a fundamental driving force to support and validate decisions at the nonprofit.
It is important to note that these culture types do not necessarily have a linear progression. One culture type is not always a prerequisite for another. For example, an organization may not have a culture of sharing, but they do have a culture of testing that allows them to become more data driven. Your nonprofit can start anywhere and go everywhere in its cultural evolution.
Once you recognize the importance of culture, then you can continue the journey of adopting a more data driven. From there, follow the ABCs of data driven culture adoption:
Acknowledge the Current Culture: It is what it is. Embrace it. Accept it. Move forward.
Baby Step Behaviors: Focus on small behavior changes that are observable and repeatable.
Culture Aligns with Strategy: Create clear alignment of strategy and organizational culture.
Thankfully, there are a growing number of nonprofit organizations that we can look to as examples of the right behaviors, habits, and data driven cultures in action.
THE FUTURE
The future of the nonprofit sector is one in which passionate professionals are armed with data insights to maximize their performance in critical areas. In the future, there are more donor-centric organizations because they made the choice to leverage data to build relationships at scale. Nonprofits are more accountable and transparent in the future thanks to the use of data and metrics.
This transformation will not happen overnight. It will not happen solely because of technology or data or people. It will happen because all of those elements will converge with the right cultural habits and behaviors. In the coming years, the growth in data driven nonprofits will help accelerate the changes we want to see in the world.
Steve MacLaughlin is the Vice President of Data & Analytics at Blackbaud and best-selling author of Data Driven Nonprofits. MacLaughlin has been featured as a fundraising and nonprofit expert in the media, serves on the board of the Nonprofit Technology Network (NTEN), and is a frequent speaker at conferences and events. Steve earned both his undergraduate degree and a Master of Science degree in Interactive Media from Indiana University.
