Nonprofit Boards need data in order to understand how their organization is performing. As described in our previous blog on TPI’s, or Technical Performance Indicators, there are data points that help diagnose what is happening with their organization. We highlighted one diagnosis as being the area of repeat donors. For this post, we want to take a look at various other data points and want to point out that if you don’t have quality data, your opinions and decisions are compromised.
As I began to research for this blog post, I looked at the subject of data quality, and found quite a bit of material, well written and sound. Much of the published material is written by data experts, and many of them work for organizations who would like to sell you their services. As we discussed the information internally, we kept arriving at the same point of view. The material was very good, and even excellent, but was not written for either of two audiences. It was not written for the data novice, nor is it written for the young start up organization.
I say that because to gather and analyze sophisticated data, requires administrative time and expertise, which implies money, both areas always in short supply. One way in which to view data requirements is to correlate the requirements to the life cycle of the organization. We like the term ‘actionable data’ to help us make some sense of this.
Actionable Data becomes the pivot point for Board supervision. A Board may decide that if we increase our fundraising goals, and meet them, then we can increase the number of clients served. In addition a ten percent increase in funding equals a four percent increase in clients served. Imagine how powerful that message can be in your fundraising efforts. Suddenly a donor knows why they should provide more funds (or tell a neighbor, etc.).
Startup or Early Stage Nonprofit Organization
If we look at a real startup, we are looking at the sources of data as being someplace between file cards in a rolodex, and one page spreadsheets. In order to avoid ledger paper, and the old debits on the left discussion, let’s move this discussion to spreadsheets. What types of actionable data does a Board need in the early stage.
At this stage the Board needs access to Profit and Loss Statements, Balance Sheets, Payroll, Audit Reports, and 990 data. (The 990 is the annual nonprofit information required by the IRS.) We also believe that the board needs basic fundraising Information. This includes basic donor information, as in how many and average donation for individuals. Organizational Donations, as in funds from foundations, trusts or other charities and whether they are annual or one time donations. Information by event should include funds raised, and the basic cost of raising the funds.
- Basic Org Chart showing employees and volunteers.
- An organization description of services provided. At its most basic, who and how many touch the recipients of services vs. who and how many supervise the operation.
- Who and how many manage the organization but are not recipient facing. This includes administrative staff, fund raisers, social media people and website managers.
Data Quality and Analysis
First, except for volunteers, becoming an expert in Data Quality and Analysis is not a mandatory Board member competency. However, we believe that Board members do need a basic understanding of data, and its importance when it comes to directing the organization.
When you Google Data Quality, one of the first things you find are some definitions. We like the following, which is from Wikipedia:
Data quality refers to the condition of a set of values of qualitative or quantitative variables. There are many definitions of data quality but data is generally considered high quality if it is “fit for [its] intended uses in operations, decision making and planning”.
We also wrote more about this topic in our Article: Why Do You Need Clean Data?
Where to Begin?
As in any plan, your entry into data management needs a step one. A relatively easy step, and an important one is to look at your emails. Consider for a moment that when we are looking for donor information, event fund-raising, and operational events we benefit by knowing the who, not just the how much.
So step one is to ask, when we send emails, how many are opened? As a follow-up, of last year’s donors, how many are opened? One signal about a data quality problem is when you hear about the problem of duplicates. Here is a way to learn more, and to develop some empathy for your Accidental Techie.
We hope that this is providing you with a way to begin thinking about actionable data. Your questions and comments would help us to know more about what you may like to discuss next. Please add your thoughts into below form or leave a comment.
This post is part of a series. Here is a list of the other posts:
- Part 1: Nonprofit Board Members and Technology
- Part 2: Donor Data for Board Members
- Part 3: Key Performance Indicators (KPIs) for Board Members
- Part 4: Actionable Data for Nonprofit Boards