Over the past several years, Big Data, Data Analytics and Data Visualization have become some of the noisiest buzzwords in the nonprofit lexicon.   Data, analytics, and reporting together form the basis of business intelligence, and while many nonprofits are developing core competencies in one or the other of these key functions, it takes a true organization-wide commitment and approach to achieve the benefits of BI and data-driven decision making.  

2014 promises to be the year that many of the Business Intelligence puzzle pieces come together for nonprofits, as

  • new kinds of data including demographic, lifestyle, political, and behavioral become available to supplement existing information, including ever more accurate estimates of wealth and assets;
  • technology providers are seeing the potential in creating cost-effective and user-friendly tools for conducting and utilizing business intelligence in all areas of nonprofit management;
  • pressures from trustees, funders, and donors converge  to demand greater transparency and demonstrable outcomes; and,
  • sophisticated data analytics practitioners from higher education, health care, and national nonprofits are forming business intelligence teams and modeling the potential and value of true BI.

Recent research by WealthEngine shows that there are five distinct stages of nonprofit data maturity, from oblivious, through aware, emerging, and investing to optimizing.  Based on a study of these different levels of maturity, we identified the following five key areas that differentiate those who are practicing data-informed decision making from those who are less data-informed:

  1. Data:  Data informed organizations are more likely to enrich their data with appended data from a variety of sources, including screening data, subscription data, internet sources, analytics, surveys, and others.  78% of optimizing organizations append data regularly, while less than 50% of oblivious organizations enhance their data on a regular basis.
  2. Technical Support:  Optimizing organizations are by far more satisfied with the technical support they receive than are oblivious organizations, with 50% of optimizing being very satisfied, while 50% of oblivious reported being very dissatisfied.
  3. Technical Planning:  62% of Optimizing organizations have a well-crafted technology strategic plan, while 68% of oblivious organizations have no technology strategic plan and have not included technology in any strategic planning.
  4. Reporting:  Mature organizations are more likely to have real-time dashboard reporting, while over 20% of those lowest on the maturity scale indicated they are “too busy to pull reports.”
  5. Analytics: High maturity organizations are much more likely to have an individual or department dedicated to analytics than lower maturity organizations.  In addition, over 60% of optimizing organizations are very satisfied or somewhat satisfied with analytic outputs, while only about 20% of oblivious and emerging organizations feel that way.

With competition for funding heightening, and the demand for efficiency, effectiveness and evidence-based investments in social change ever-increasing, it is incumbent on nonprofits of all types and sizes to develop the infrastructure and skills necessary to develop and leverage business intelligence.  Organizations that are combining their data with analytics and meaningful, impactful reporting to provide decision-support organization-wide will be three steps ahead of the competition.

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