Data-driven decision-making is a for-profit business practice that is rooted in finding quantitative results. Gathering and analyzing data allows corporations to make decisions based on metrics and support those programs or products that are profitable or moving in the right direction. This so-called “Big Data” approach has been creeping into the non-profit sector for some time, but it appears that a large wave or push for data-driven results has really hit the non-profit landscape. As non-profits strive to show their mission impact, the need for measurement has increased. Data analysis can help an organization show that they are not only doing what they said they would do, but also serve as a good investment. However, not all non -profits have decided to ride the data wave and develop a data-driven culture. The reasons from this are many, but there are really three important reasons why nonprofits should begin to include data, analysis and metrics into their culture:
- Data and analysis provides quantifiable measures of your mission’s impact.
- Donors, who have grown in sophistication, are taking an investor’s approach to philanthropy. They will expect you to provide proof that their investment in you is a good one.
- Data and analysis helps you improve your organization and focuses your work.
As non-profits struggle with the question of “What role will data play in our organization?”, they should determine a place for it and begin to develop a data-driven culture. The main reason for this is that the analysis of data can improve your organization’s performance and ability to deliver its mission. You need to take a long-range approach to this culture shift, knowing that you may need to start with “small data”. Data-driven decision-making is an important part of successful organizations and is a journey more than a destination.