Data has never been more prevalent in our world than it is today. From sports to business to our personal lives, data has become a fabric in our culture whether we realize it or not.
David C. Paddison, MBA, CHFP, Founder and CEO of Impact Analytics, stopped by the Lovitt & Touché Learning Academy earlier this week to discuss how nonprofit and government organizations can increase the impact of their services by leveraging, analyzing and employing data to drive their decisions and actions.
While many nonprofits today are aware of the benefits of analyzing data, a lot of them are still lacking the knowledge of how to use it and/or are unfamiliar with what data analytics entails.
What is data analytics?
Simply put, it is taking raw data from your systems and turning it into actionable information.
This raw data can come from an array of sources ranging from your client management systems, surveys, fundraising, accounting, and financing.
Data-Informed or Data-Driven?
Nonprofits generally have information readily available to them, but are stuck in a culture where they are data-informed as opposed to data-driven. Data-informed organizations tend to be passive with their data and their decisions are often based on intuition. Data-driven organizations actively take in their data and make their decisions based on facts.
Paddison described the difference between the two by relating it to driving. When you are running low on fuel, your car alerts you that you need to pull over and get gas soon. A data-informed organization would acknowledge and understand this fact yet continue to drive, while a data-driven company would pull over and get gas.
Data-driven decisions allow your programs to have the greatest impact on the clients you serve.
The 3 Pillars of Data-Analytics
There are three main concepts that support an overall organizational change in an analytics program: Leadership, Tools, and Processes.
For an organization to become data-driven it takes every leader at every level of an organization, not just the people at the very top. They must create the vision and show commitment to becoming data-driven, and take responsibility for shifting the culture.
It is important for leadership to clearly define their goals and expectations, and communicate to their employees how they intend to use data to reach them.
Tools are the technology and infrastructure of a data-driven organization. A prerequisite to using tools is having a data aggregation system in place.
Among the tools Paddison discussed were Microsoft Excel and Microsoft Power BI. Microsoft Excel is a tool most organizations are familiar with, and it remains one of the most valuable resources that can be used for reporting. Microsoft Power BI is fairly new software that is dynamic and robust. It takes the great search features found in Excel and brings it into its own file. With experience in Excel, it is not difficult to learn and it makes distributing, reporting, and visualizations much easier.
Processes are what facilitate the actions and decisions of an organization. Paddison argues that this is the most important piece of the three pillars. Leadership and tools allow for change but processes ensure that the change occurs. In general you want your processes to have these five characteristics:
- Standardized & Structured
- Agile in Nature
- Promotes Experimentation
- Action Oriented
- Focused on a Clearly Defined Outcome
How Can I Create an Analytics Action Plan?
Determine Your Action Question
What is an area of your program you want to explore?
Determine the Appropriate Measures
What specific decisions do you want to be able to make based on the answer to your question?
Assess the Data Available
What related data is currently manually entered? What related is automatically tracked?
Decide on Which Metrics are the Best
Which metrics are the most useful and how difficult would it be to collect it?
Action Process & Implementation Plan
Define the who, what, when and how of the process. Who do I need to get on board?
We would like to thank Mr. Paddison for taking some time to discuss how data analytics can be used by nonprofits to increase community impact. For more information on how analytics can help your nonprofit, visit Impact Analytics website by clicking on the link below or contact your Lovitt & Touché representative!