ARTICLE
Let Data Drive Your Decisions
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Is your organization feeling the changes in our economy, society, and communities? Are you a leader feeling the pressure to meet these challenges? Fortunately, data can help you make good decisions during uncertain times.
Living in uncertain times
Recent events have led to uncertainty in today’s world. In 2020, the COVID-19 pandemic forced organizations to pivot to survive. Suddenly, there was no clear path forward, and we did not know if things would return to normal. We still face uncertainty today, given inflation, rising costs, high employee turnover, and political unrest. Do you find yourself asking how to pivot during uncertain times? Will you have the capacity to achieve your missions? Will you bring in enough money to survive during these uncertain times?
Why data should drive your decisions
Many key industries, including retailers, manufacturers, and healthcare organizations, use data to inform decisions. Each of these industries needs to study an aspect of their output to see how it performs and decide if they need to change. For example, a clothing store puts out a new line of clothing; they want to know how that line is performing. If it does well, it may produce more items like it. If it does poorly, it can quickly pivot and put out something different to please their audience and boost their profits. Unfortunately, 50% of nonprofits do not know how data can support their work, and 31% do not know what to do with this information. Does this sound familiar to you? Leveraging data during uncertain times will help you lead more confidently and succeed no matter what happens. To be successful despite uncertainty, you must let data drive your decisions.
Using data to help your organization thrive
Here are four strategies to help data drive your decisions so your organization can thrive!
1. Know your goals
You need to know your goals to let your data drive your decisions. What does your organization want to accomplish? How will you identify these goals? Some organizations utilize Key Performance Indicators (KPIs) to measure their goals. Donorbox defines KPIs as “a measurable value that demonstrates how effectively a nonprofit (or another type of organization) is achieving its key organizational objectives.” KPIs should be clear, quantifiable, and adaptable. An example of a KPI could be the number of surveys completed after an event. This is a measurable number that could be adapted if the survey needed to be given in different formats. Please talk with your staff and board members about what goals would best serve your organization and prioritize them. Recognize that your organization may need to pivot, and doing things the same way may no longer work.
One question you can ask is: “What impact do you want your organization to make?” Consider additional questions such as “What programs and services are most effective?” and “What products and services are most viable?” Answering such questions will help leverage your staff, time, and resources. Identify your goals first, or you will waste time on data that will not support your organization’s success. Include your employees and enable frontline action when identifying and prioritizing your goals. This will build buy in, and you will likely learn something essential to inform your goals.
2. Identify what data you’re already collecting
After identifying your goals, you need to look at what your organization is already collecting. As the First Republic Bank reported, 90% of nonprofits are already collecting data! Unsurprisingly, most organizations collect data through forms, questionnaires, surveys, databases, and customer relationship management systems. You are likely already collecting data about how many people you serve or your income. The problem is that fewer organizations examine patterns and trends from their existing data.
This step can differentiate organizations that are merely surviving from those that are thriving. Analyzing your data may require pulling information from multiple sources and seeing what can be learned using descriptive and inferential statistics. Another consideration is that various people may be collecting data. Talk with your staff to see who is involved and what data is being collected. If possible, avoid situations in which multiple people are collecting the same information.
Now that you know what you are collecting, revisit your goals and highlight what you are missing. What information is vital and helpful? Does the information you have not align with your goals? Are you collecting data that is not important? You may be tracking the number of likes on a Facebook post. How does this information support your organization? If such data does not serve your organization, stop collecting it. Sometimes, less is more, especially when your organization needs to streamline its processes to save time, money, and resources. Identifying your critical data sets will help your organization in the long run.
3. Choose new metrics
Once you have identified the data you already have, it may be time to select new metrics that better align with your goals. Think about what metrics you will use. Ask yourself what information is relevant, timely, and actionable. Metrics are defined as the “Parameters your organization will use to measure performance.” What kind of performance matters to your organization? Some possible metrics could include the number of unique people served, retention rate, customer satisfaction rating, net promoter score, total amount from fundraising, graduation rate, turnover rate, and so on. The more specific the metrics, the better you can measure whether they were completed.
For example, imagine you employ 100 workers, and one of your goals for the year is to reduce turnover. You implement a new training program and offer additional benefits. Your new metric may be a 20% reduction in employee turnover. You could compare how many employees left during the previous year to the current year and see if you achieved your goal. Choosing new metrics and determining whether they were completed is essential in letting data drive your decisions.
Fundraising effectiveness is a critical metric for many nonprofits, especially in times of uncertainty when inflation and federally funded grants could affect yearly budgets. A recent Bloomerang article mentioned three metrics for measuring fundraising effectiveness:
- Total fundraising net focuses on whether a nonprofit made enough money to fund its mission. Total amount raised minus total fundraising expenses
- Dependency quotient encourages nonprofits to diversify their funding streams. It examines whether your organization depends on a small number of large-scale donations. The sum of contributions from “X” largest funders divided by total organization expenditures
- Cost of fundraising reflects what it costs to raise money: total fundraising expenses divided by total fundraising net
Both examples provide important metrics to measure. However, there are infinite metrics you could consider that may be about something other than employee retention or fundraising. Some of these could be simple, such as whether you receive engagement on your social media posts and what type of engagement. Did people like your post, or did they share it? Other metrics could be more complex and require pooling multiple data points. For example, suppose you wanted to calculate how many family members were served through your program. In that case, you may need to examine who attended this program and how many people comprised their household to get to the metric of family members. These are all things you will need to consider when collecting your data. If you need help figuring out where to start, work with an expert to help!
4. Collect quality data
Lastly, when you are ready to let data drive your decisions, ensure you have quality data. What is quality data, you may wonder.
Bad data will not help your organization because you cannot make a good decision. There are many ways your data could be bad. One way is simply having too much data. Too much data can be hard to process and manage, leading to less certainty in your decisions. Additionally, your data could be incorrect. Bad data can also come from bad questions. Simply put, you will get bad responses if you ask bad questions. Ensure that you are asking what you want to study. Lastly, if you do not properly input your data, then your data-informed decisions could be compromised. When you record your data, errors are more likely to happen if it is messy or unorganized, and incorrect data will be reported. To avoid inaccurate or bad data:
- Train your staff. They should collect data in a neutral way that is consistent and systematic. There must be little to no room for interpretation when working with your data to keep it as accurate as possible. Thomas Montvilas, a Forbes Council member, states that having clear company data policies from strong leadership will help prevent errors in your data and ensure data privacy and security. Additionally, building up your employees to work with data will foster continuous improvement in customer and employee experiences as future innovations occur, which is ultimately an investment in your organization.
- Have a secure place to store your data. Ensure it is accessible only to those trained to use it adequately and can see the information, especially if it is confidential, such as names and addresses. Something as simple as using a password-protected file can add security to your data to help ensure confidentiality. The CITI Program offers training covering the APA Code of Ethics. It can help train your leaders and staff to collect quality data and keep sensitive content confidential.
Seek help as needed
Again, if this sounds overwhelming, work with a professional! Collecting bad data will not help your organization, and your organization will waste resources. Implementing these four strategies will help your organization thrive!
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