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Analysis

How Big Data Helps Nonprofits Thrive

Data drives big business. But does it have a place in the third sector? Here’s how Big Data helps nonprofits maximize their real-world impact.

Marshall Lemon
July 23 2019

Big Data is more than a marketer’s favorite catchphrase: it has indisputably transformed industries ranging from retail to the tech sector and beyond. Data defines the way businesses target customers, mitigate risk, and manage supply chains. This unprecedented level of end-user insight also helps brands design better products. But does Big Data have a place in the third sector? As it turns out, data collection can significantly enhance the impact of charitable organizations. Nonprofits generally lag behind in digital maturity, but some have zeroed-in on data and achieved incredible results.

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Jen Bokoff of Foundation Center suggests that “nonprofits aren’t staffed by people who are naturally inclined to seek out data.” According to a recent report, 79% of nonprofits claim that they don’t have the time or personnel to focus on data. As a result, only 40% regularly use data to make decisions.

Nonprofits typically face two major hurdles when it comes to data. First, they fail to collect enough — 36% of nonprofits admit this is a significant barrier. The second struggle is data management. 46% of nonprofits claim that they don’t store their data in one place. It’s challenging to extrapolate valuable insights when data is siloed or decentralized. Similarly, if an organization lacks the proper tools to analyze its data, that information loses its value, and 42% of nonprofits feel that their lack of tools holds them back.

Despite these challenges, Big Data represents a massive, untapped opportunity. Most nonprofits aware of its potential are eager to employ it: 97% expressed interest in learning how to use their data more effectively. Some organizations are already leading the charge. Here are three ways nonprofits are amplifying their efforts with Big Data.

Big Data drives donations

When fundraising, nonprofits rely on grants and donations; therefore, they utilize marketing to reach the right audiences. Big Data and AI have recalibrated the overall marketing landscape, making it easier to identify leads and deliver the right message at the right time. This same logic applies to the nonprofit sector. Nonprofits are learning to use data to identify donor demographics such as age, gender, and household income. Data also offers a window into their geographic distribution. Crucially, this formation helps organizations understand when their donors are most likely to donate.

The Austin YMCA harnessed the power of data when they partnered with MVP Audience to increase membership and donations. The organization had a significant amount of data, but it was siloed, incomplete, or even inaccessible. By centralizing their member records, they were able to produce hundreds of new memberships and generate six figures of additional revenue through campaigns that profiled past donors and echoed previously successful strategies. The data also enabled them to tailor their messaging and target more effectively.

Data helps tell the story

Nonprofits leverage data to share their story, illustrate a donation’s impact, or convince a community to participate in charitable actions. Storytelling is critical to attracting new donors, and data can help clarify the narrative. Beyond the need for stories, donors increasingly pressure charities for transparency. They want to know where their money is going, and that it’s being used effectively.

Charity: Water is renowned for its exceptional storytelling. They pair high-impact images with personal narratives, also using numbers and statistics to highlight individual projects. Founder Scott Harrison said that his vision was to send “100% of all public donations straight to the field,” that is, deployed to develop sensor technology and measure the flow of clean water in completed wells. Previously, assessing well performance and identifying mechanical issues in remote areas was a challenge. The new sensors enable staff to monitor hourly flow rates from thousands of wells and dispatch mechanics at a faster rate. They also incorporated this new layer of data into donor portals and a “map of impact,” giving donors a peek at the value of their efforts.

 

Big Data to make a bigger impact

Beyond fundraising, Big Data is transformative in the field, too. The Global Emancipation Network (GEN), a nonprofit dedicated to ending human trafficking, uses data to identify traffickers and victims. Human trafficking data is notoriously difficult to obtain: studies estimate that the number of trafficked individuals ranges from 20 to 45 million, with an error margin greater than 100%. Thanks to technical support from Microsoft Philanthropies, GEN developed a new tool called Minerva, which finds new information in large, hard to search data sets. Minerva has now identified 989 victims and perpetrators and is tracking 22,000 more.

The Jane Goodall Institute (JGI) also uses data to advance its mission. Although the institute sits on a wealth of data on chimpanzee behavior, it lacked information about habitat deforestation. JGI enlisted the help of African villagers who mapped out their local ecosystems. Using Google Earth Engine and Open Data Kit, the community logged substantial data. JGI found that 2.4% of African forests within chimpanzee range were destroyed between 2000-2012. The institute then set a 30-year goal to protect 85% of chimpanzees in their native African habitats.

UNICEF (The United Nations Children’s Fund) already has a massive footprint in the nonprofit world, but they wanted to further that impact, so they collected huge quantities of data and shared it on a public site. UNICEF uses this information to map and monitor factors such as child malnutrition, disease, sanitation, education, exploitation, and more. They measure their progress against global “Sustainable Development Goals” and use data to craft reports assessing problem areas where they can effectively distribute resources and keep stakeholders informed.

The future of Big Data in the third sector

Although still playing catch up, nonprofits are inching closer toward digital maturity. 10% more charities invest money in digital technologies, allowing them to collect and analyze with higher success rates. In the future, we are likely to see more charitable organizations prioritize data, even when facing resource constraints. Data enables nonprofits to reach more donors and tell better stories, thus furthering their missions. As more nonprofits leverage data to magnify their contributions to the world, it may even redefine the third sector from the ground up.

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Marshall Lemon

Marshall Lemon is a writer, editor, librarian, and game designer. As the Content Marketing Manager at Fluid PR Group, he helps businesses craft engaging stories within the context of well-researched industry data. He lives in London, Ontario with his wife and two adorable puppers.

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