Not-for-profit organizations often have limited budgets and lack in-house IT expertise. So they may not be as technologically savvy as their for-profit counterparts. Aggravating this situation is the fact that new technology generally has a finite — and relatively short — lifespan.
Although your nonprofit may not ever be considered cutting edge, to keep up with stakeholder expectations, you should try to adopt new technologies that offer the greatest potential payoffs for your organization. Data analytics is a good place to start, offering opportunities to streamline operations, grow funding and improve client services.
Just about every nonprofit, regardless of size, sits on mounds of untapped data. Wrangling this data might seem overwhelming, but that's where data analytics can prove invaluable. It offers the tools you need to gather data and convert it into actionable intelligence your leaders can use to make more informed decisions.
Data analytics has now been around long enough that various subsets have developed. For example, it can be descriptive (identifying trends and analyzing behavior), predictive (forecasting the behavior of certain types of donors, volunteers or constituents) and prescriptive (providing advice on how to pursue strategic goals). Not surprisingly, the rapid spread of artificial intelligence (AI) has changed data analytics, too. "Augmented" analytics involves using machine learning and AI to enhance data preparation, analysis and insight generation.
Regardless of the type of data analytics, there are many benefits. It can, for instance, greatly improve data accuracy. In nonprofits, data tends to accumulate in different departments and systems — or silos — that don't communicate with one another. This can result in errors when staff try to manually collect and organize information. Data analytics can preempt this risk while fostering stronger organization-wide collaboration.
Data analytics also can facilitate a forward-looking perspective that leads to better strategic planning. Financial statements, for example, generally provide a wealth of information. (However, keep in mind that they're backward-looking by nature.) With data analysis, you may be able to access real-time financial information presented on easy-to-understand dashboards. Armed with objective and current data, board members and executives can identify impending challenges earlier and respond with more agility to unexpected issues.
Data analytics can increase efficiency and effectiveness in several ways. You may be able to use data analytics for regular wealth screening to quickly identify likely donor prospects — as well as the communication methods they prefer. By recognizing trends and patterns, analytical tools make market segmentation easier, whether it's for fundraising, membership recruitment or other purposes.
Driven by AI, data analytics also may enable you to create chatbots that automate routine communications and customer service requests. This can free up your staff to deal with other demands on their time. Chatbots usually are capable of processing smaller donations while directing larger or more complicated gifts to human staff.
You can also use data analysis to tell your organization's story in more powerful ways. Although emotional appeals have their place, nonprofit supporters increasingly are focused on outcomes, and data analysis can clearly and succinctly highlight the outcomes donations make possible. And data analytics typically allows organizations to track key performance indicators. With real-time updates, your leaders can evaluate programs, fundraising campaigns, and website and social media activity. Analytics tools can then make appropriate adjustments, as needed.
For all their advantages, data analysis, AI and other forms of technology modernization may fall outside the expertise of your nonprofit's staff. Qualified experts, with experience in both the technologies and the nonprofit space, can help you find the right tools for your organization.
Get in touch today and find out how we can help you meet your objectives.
