Drawing Insights from Data: An Actionable Guide for Nonprofits
What can you do with better insights?
Every social impact organization is founded upon a mission to address humanity’s most glaring inequalities and injustices. But in an increasingly data-driven world, foundations and nonprofits often struggle with how to translate their impact into something measurable and meaningful.
Nonprofits must operate effectively to entice donors to invest. The “value” for donors is the gratification that derives from contributing to a cause. But, they still want to see evidence of your mission, goals, and impact.
For nonprofit organizations, measuring change through data-driven stories accelerates impact. Organizations that draw insights from data can tell rich, well-rounded stories that strengthen mission-driven communities with the power to transform goals into realities.
In this article, we’ll define the meaning and importance of drawing insights from data, and explain the three main steps in the data journey. We’ll discuss the benefits of using data analysis insights and the best ways for nonprofits to draw insights from data. Finally, we’ll review a list of best practices to gain actionable and valuable insights.
What are Data Insights?
Insight data analysis refers to the process of collecting, analyzing, and acting on data to help you make better decisions and avoid relying on gut instinct. The words data and insights are often used synonymously, but there are some key distinctions between the two.
The definitions and steps that lead us from data to insights are:
Consider data as the input. Data is a collection of facts and figures taken from a given source, and represents unprocessed information. Considering how much of our daily activity happens digitally, most organizations have an abundance of raw data on hand. In fact, it’s estimated that by 2025, the amount of data we generate each day will reach 463 exabytes (one exabyte being one billion gigabytes). That’s a whole heap of data!
Analytics tools and processes manipulate raw data from multiple sources to identify patterns, relationships, and trends, making raw data easier to consume. So understandable, using a dedicated analytics dashboard makes vast quantities of data much easier to consume and understand.
Insights are the output, and represent a deeper understanding of a situation. The goal is to derive actionable insights that empower organizations to drive an objective forward.
What Can You Do with Better Insights?
Nonprofits and other philanthropic organizations are under continual pressure from stakeholders to demonstrate success and report back on the development of projects using comprehensive and compelling data-rich evidence. Insights from data provide a clear overview of what’s happening across an organization, and data visualization and impact measurement tools can display everything on one convenient dashboard.
A recent survey found that although 90% of respondents working for nonprofits said their organizations were collecting data, only 5% believe internal decision-making is driven by data. Despite this, an IBM report concluded that 78% of nonprofits with advanced data insights reported performing their missions with greater efficiency.
These are the primary benefits of drawing insights from data:
Fundraising and outreach
Fundraising is the lifeblood of nonprofits. Leveraging better insights helps organizations to prioritize high-touch personal outreach, reduce overall marketing expenses, and maximize returns. Using data insights, nonprofits can accurately identify patterns of giving, like who is most likely to donate and when. This allows them to allocate resources better, making the fundraising process more efficient.
Membership recruitment and retention
Data analytics can help improve membership recruitment by providing better insights into membership preferences. Examples include identifying which campaigns have sparked the most interest and pinpointing the best periods to target renewals.
Nonprofit organizations are accountable to the public, stakeholders, sponsors, and various other associates for their ethical behavior and compliance. Insights from data can determine whether an organization is successfully accomplishing its mission within acceptable parameters.
Budgeting, forecasting, and reporting
In-depth analytics and report generation are powerful tools that help organizations plan for the future. Insight data analysis organizes and streamlines information from multiple sources, making it easier to consume. By modeling a range of scenarios, the best platforms can also monitor real-time situations, allowing for faster decision-making that ensures fewer resources are wasted.
Nonprofits are bound by regulations that determine what information they can collect and how they can use it. Deriving insights from data helps organizations to comply with these requirements. The information can also be used by grantmakers, as well as state and federal governments.
How to Draw Insights from Data
The critical stage in the journey from data to insight is finding the truth within your information streams to help you make meaningful, data-driven decisions. Using an all-in-one insights dashboard showing clean, structured data that is easy to understand is vital in this process.
Here are the steps to follow to best draw insights from data:
Collate and integrate data
Understanding an organization becomes challenging when it’s necessary to manually review multiple systems and databases to export information for analysis. Determine the required data sources and ensure all information is stored in a centralized system allowing more effective use.
Know what to track
It’s important to know what metrics you want to target before taking a deep dive into the data. Parameters must be fixed and be tracked consistently over time. It’s all too easy to become blinded by details that aren’t relevant, meaning your purpose and overall mission are lost.
Decide the end objective
To achieve better insights, it is vital to have a clear end objective. Without a clear aim, it’s impossible to develop a thorough plan to achieve an objective.
Operate in a continuous improvement environment
This is a developmental process where small improvements should be made continuously, rather than making big overhauls on an infrequent basis. This will ensure and maximize the efficiency of data-driven decisions.
Invest in appropriate software
Leverage the most up-to-date and integrated impact analysis platform to allow better data analysis insights. UpMetrics’ social impact software combines quantitative and qualitative analysis techniques, enabling social impact organizations to tell compelling, meaningful stories that inspire change.
From Data to Insights: Best Practices for Actionable Insights
Here are some tips to ensure you collect and collate the most valuable data insights:
Ensure information is accurately displayed in a data visualization platform
Insights tell different stories depending on how they are visually presented. For example, when showcasing key metrics from your analysis, make sure the x and y axis points are in proportion. Failure to do so will misrepresent your data. Investing in technology that displays data clearly and accurately provides protection from any accidental misrepresentations..
Identify the correct patterns in data sets
One common thing to look for is trending quality, like spotting a pattern in numbers that are increasing or decreasing. For example, if page views are increasing week-by-week, the data shows an upward trend, suggesting the asset in question is working. Similarly, a downtrend could necessitate the need to produce new content or indicate that an algorithmic update has impacted rankings. Look for correlations between uptrends and down trends and why they exist.
Consider the correct time frames
Errors occur when organizations look at a snapshot of data and make assumptions without taking other factors into account. When looking at a “slice” of time, you should also look back to take account of historical trends. This provides insight into the effects of other variables like market trends and seasonality. A visualization tool that allows historical analysis will tell the full story more accurately.
Avoid measuring averages and totals
Erroneous data points skew averages, so it’s best to steer clear of these metrics as they don’t provide a complete or accurate picture. A better approach would be to measure in percentage changes, provided you have that data to work with.
Get Actionable Insights with UpMetrics
Nonprofits are no different from regular businesses in their need to demonstrate value to their stakeholders. However, there is significantly more pressure than on corporate businesses to show accountability, transparency, and compliance. Utilizing insights from data enables nonprofit organizations to tell meaningful stories that achieve this while also accelerating their impact.
UpMetrics’ impact measurement platform transforms streams of information into data and serves as your most powerful tool to help drive change. We have all the knowledge and tools you need to generate actionable data to help drive your mission forward. Our dedicated platform for nonprofits artfully blends quantitative and qualitative functions, with capabilities engineered towards the unique goals of every client.
Contact us today to learn more about our nonprofit impact measurement solution and discover how to collect, organize, and report on your commitment to drive positive change for a mended world.