A post to Exponent Philanthropy's blog

How Funders Can Help Nonprofits Leverage Their Data

If you cannot measure it, you cannot improve it.” (Lord Kelvin)

As part of their day-to-day operations, many nonprofits automatically collect data, like clients served and services provided. Whether they realize it or not, these represent a wealth of valuable data that could be leveraged to solve today’s pressing societal issues. This information could be valuable to individuals both inside and outside of the organization without having to gather new data or spend extra money.

As one of the country’s largest providers of social services, The Salvation Army recognized it had a wealth of service data that could be an asset both internally and to others. They partnered with the Indiana University Lilly Family School of Philanthropy to explore the opportunities that existed for using their data. Ultimately, this collaboration resulted in the creation of the Human Needs Index (HNI), a new, systematic way to measure human need in the U.S. and how it is evolving.

See “Fighting Poverty With Big Data: A New Tool for Nonprofits and Their Funders”

Funders are sometimes criticized by their grantees for putting too much emphasis on data gathering. The HNI example shows that funders (and research partners) can work with grantees/nonprofits to help them leverage the data they already have, to better understand their own work and to help others in the nonprofit sector and beyond.

A nonprofit does not have to have a national presence, like The Salvation Army, to possess useful data. And information may also be qualitative in nature.  Potentially useful data that local and regional nonprofits may already be collecting include:

  • Number of people served
  • Individuals who are not served or are underserved
  • Demographic and sociographic data
  • Quantity of products provided or services rendered
  • End user feedback

Some nonprofits may realize they have useful information, but lack the time and/or resources to think through the many possibilities for capitalizing upon it. Funders can support new efforts to explore how the nonprofit’s data can yield new insights, for example, enabling nonprofits to dedicate an internal person to the quantitative and qualitative analysis of internal results for recipients of the nonprofit’s services.

External funders and other partners can also provide a 30,000-foot view of what the comparisons and uses of nonprofit data could be, similar to how the IU Lilly Family School of Philanthropy assisted The Salvation Army in creating The Human Needs Index. In that case, the school’s researchers partnered with the Army’s statisticians to narrow down 230 possible service variables to the seven that together would most effectively measure basic human need as confronted by The Salvation Army nationwide.

Through evaluation of preexisting data, new knowledge can be developed.

Such learning does not have to be a costly proposition. To begin with, funders can help nonprofits think about what types of information and data they have and would like to collect. Together, they can build on that information to determine the best course for pioneering new information and insights.

Sometimes it may be helpful to involve interested academics in the pursuit, as well. Academics can often help nonprofits validate their data by analyzing whether their data tracks with other similar regional and/or local measures of related information or data available from similarly situated nonprofits. Researchers can help monitor, evaluate, and track useful information for the nonprofit.

Even small nonprofits can often afford to work with a faculty member or to hire a graduate student to assist them. Academics often want to collaborate on projects because the data is useful to their own research agenda.

Funders bring applicable data collection experience from the for-profit sector.

The for-profit sector has extensive experience collecting and analyzing end-user feedback. Funders who are aware of these systems can help nonprofits develop similar systems that increase feedback collection and aid in data analysis.

Recently, funders are becoming much more aware of the ability of using data in the learning process. Instead of requiring nonprofits to collect brand-new data in order to receive funding, successful partnerships between funders and nonprofits should help the nonprofits see the potential benefits of exploring and analyzing the data they are already collecting.

Partnerships benefit society by developing new and innovative uses for existing data.

By supporting nonprofits through discovery phase, measurement, and data analysis (as well as financially), funders could prove very beneficial in the organizational learning process, as nonprofits seek to meet their mission. Additional partnerships between funders and service providers can lead to new insights and progress being made sooner and more efficiently than if the funder was simply to give the service provider a grant and then leave them on their own to develop and implement a strategy to analyze and publish findings from their wealth of data. By working in a collaborative manner, funders and nonprofit organizations can join forces to positively impact society using a wealth of data sources.

una-osiliUna Osili is professor of economics and director of research at the Indiana University Lilly Family School of Philanthropy.

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