What is a Data Strategy and Why Does Every Nonprofit Need One?

Share
Share
Share

Nonprofit leaders depend on information to make strategic and tactical decisions about how to run, grow and transform their organizations. Whether it is effective fundraising, strong public relations or advocacy, efficient operations, or designing new programs, allocating scarce resources to the opportunities that are most impactful to the business strategy is a key part of any CEO or Executive Director’s responsibility. 

Using data to inform key decisions is a proven way of improving the quality of those decisions, yet few nonprofits have a strategy to guide them in ensuring that they are collecting, managing, and preparing data to assist in the decision-making process. 

nonprofit

A data strategy may sound like the kind of luxury that only large or wealthy organizations can afford, but in fact, it is something that is essential to operating and growing a healthy and impactful organization.  

What is a data strategy and how do you go about creating one? 

A data strategy is simply a long-term plan explaining how the organization plans to use data to improve key results. Like other strategic plans, it documents high-level goals and objectives to achieve over typically a two to five-year span. Ideally, this plan results in a detailed roadmap that can guide investment in data capabilities to achieve the strategic goals and mission of the organization. 

Constructing a data strategy can seem intimidating but can easily be broken down into a few key steps. 

data strategy creation

Start with the organizational goals 

First, it is important to articulate what knowledge would help you make those clear-eyed decisions critical to running a successful nonprofit. Perhaps it’s understanding the costs of operating and spotting efficiencies, learning donor preferences, and delighting them, or seeing trends in your mission space and innovating to meet them. Across the board, having reliable and trusted insights can help make critical strategic decisions better.  

Focus not on a report or a chart that you need but, on the knowledge, you seek – for example, “Which of my current donors is most likely to increase their giving?” Think about the action you need to take in response to that knowledge (perhaps to cultivate that donor) and assess the value of the action you could take (in this case the revenue impact of increasing donations). 

Examine where you are today 

When you have a clear picture of the knowledge you need, ask yourself what stands in the way of having that knowledge today. Perhaps the underlying data is not even collected, or maybe it is in different systems or formats and is not easy to access. It could be that the data is available but not trusted – it is inconsistent, lacks verification, or is too stale. Maybe the analysis produced from the data is not aligned to the actions that need to be taken, it may be confusing to read or be presented at an unhelpful level of detail. This step often reveals some easy fixes to improve the usability of existing analyses or reports. 

data-strategy

Evaluate the options and make a plan 

After identifying the knowledge you need, and the barriers to having that knowledge, you will have a gap analysis detailing what would have to change to give you the insights you want. Now it’s time to prioritize! 

Data insights support specific decisions, and all decisions are not equal in impact. Assess the value to the mission of addressing each of the gaps, as well as the investment needed and prioritize based on the return on investment or strategic outcome. This prioritized list is the basis for your data strategy roadmap.  

Do not overlook the human factor 

It is tempting to think of data strategy and management as a “technical” issue, and often it is assigned to the IT team. This is a mistake – humans make the decisions that drive an organization and so humans across the board need to be engaged in the creation of a data strategy to support those decisions. Humans are often intricately involved in decisions around what data is collected and how it is processed. Management teams are the “customers” for data insights produced.  

For a team where data informed decision making is a relatively new practice, people may be intimidated or lack the training or understanding to accurately interpret and appropriately use the insights. A holistic data strategy considers the needs for data literacy training and change management, as well as the activity needed to produce the analysis. 

It has been said that “data is the new oil,” referring to the potential of both to fuel tremendous business growth and provide capability never before seen. Just like oil, data is not particularly useful in its raw state – it needs to be harvested, processed, and prepared for a particular use. Having a well-defined strategy articulating how you will make use of data to inform business decisions and a roadmap to provide that data capability will ensure that your nonprofit is running on rocket fuel. 

To embark on the journey of building a successful data strategy and seek the expertise of nonprofit data strategy specialists, contact Hartman Executive Advisors and begin your organization’s transformation to unleash the power of data.

Types:

Get in Touch

Name(Required)

Related Blogs:

Data-Driven Manufacturing is the Future

Data-Driven Manufacturing is the Future

Nearly half of CEOs believe that their company won’t be viable in ten years if it continues running on its…
Banking on Intelligence: What Community Banks Need to Know about AI [Podcast]

Banking on Intelligence: What Community Banks Need to Know about AI [Podcast]

EPISODE SUMMARY In this compelling podcast, we uncover the key insights, strategic advantages, and real-world applications that make embracing AI…
The Keys to Successful Digital Transformation

The Keys to Successful Digital Transformation

Over the last several years, digital transformation has become fundamental for businesses to remain relevant and profitable.  In fact, Many…
Scroll to Top

Let's Talk!