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Data Disruption in the Charitable Sector

[fa icon="calendar"] Jul 16, 2018 1:47:18 PM / by Erika Cole

Every online interaction -- from purchases on Amazon, to pages liked on Facebook -- create a highly personalized individual profile, and this profile is constantly changing and being updated the more individual data is gathered. In fact, the concept of having “online lives” is one that is becoming more tailored, and much more prominent due to this collection of big data.

But what is “big data” exactly? A quick Google search will reveal plenty of other posts similar to this that have varied definitions; however, in the most simple of explanations, it’s absolutely all the data an organization has collected and stored - ever. That’s every email address from every individual in every region, their purchase history, the specific times any interaction was made with the business, etc. That’s a lot of information, hence why they call it big data.

Big data has many useful applications. Arguably most important, it is used for understanding, targeting, and segmenting customers based on their past behavior. That’s why it’s not a surprise to see the same advertisement highlighted on multiple webpages for a very specific product if it’s something that a particular individual was investigating. It can aid in tracking trends, furthering innovation (for both products and business processes alike), and decreasing general overhead expenses.

While the collection of this data (coupled with automatization and digitalization) is changing the way that most for profit businesses operate and make decisions, the charitable sector, in a lot of aspects, has been slower in this transition. This could be due to the fact that most nonprofit organizations simply don’t have the capacity or resources to harness it, and for some, the idea of utilizing this type of information is a foreign concept which leaves them unsure of where to start. While this trend is wavering, it’s important to realize that the total adoption of big data initiatives, or of a more digitized culture, is a huge step. It's not as simple as changing the way a few things are done within the organization, it means a complete overhaul of a lot of processes that may have been in place for decades

Nonprofit institutions are already sitting on an incredible amount of data (think of the contact information that is used to cultivate, solicit, and stewards donors throughout the pipeline). While traditional strategies have worked well enough in the past, would it be a surprise to know that across the nonprofit sector only 45% of donors were renewed from the previous year? That over half of them give once and never give to the same cause again? Today’s donors need to see the impact of their support, personal relationships need to be built at scale, and cohorts should be highly segmented to better target campaigns. As mentioned above, institutions have access to all the data they need to do this. The issue a lot of the time is that their current strategy doesn’t necessarily align with the cultivation of a data-driven culture, let alone, have the tools in place (ahem, Fundmetric) to reap all the benefits.

Before a charity can take advantage of the benefits that come with making data-driven decisions, they must adopt the mindset of becoming a digitized organization. Shifting one’s culture is a complex task, and leading change is not a simple endeavor. The overarching idea of corporate culture is extremely fluid, and varies from organization to organization; however, changes in culture (especially in a more vertical business) must come from the top-down. It’s important that the key decision-makers within an organization recognize this and understand that the data they have goes well beyond just being numbers, that it’s a collection of very useful qualitative information as well. The VPs and Executives need to lead by example and take the proper measures to ensure that the members of their IT teams are supported and have the resources necessary to tackle big data and identify patterns that can be analyzed and distributed amongst the rest of the team. They also need to acknowledge and be aware of the culture that they’re currently operating under, and understand that cultural shift can really begin anywhere, and that the process is rarely linear. Change is never easy!

Some things these leaders should ask themselves:

  • What are our desired values and behaviours? Our priorities?
  • What kind of organization do we want to be in five, 10, 20 years?
  • What kind of metrics are we looking to keep a better eye on?
  • How does data help with that?
  • What will the learning curves look like?
  • What kind of technology or company should we use to manipulate and process it?
  • Who needs to be trained immediately, and extensively?
  • Who are the change agents within the organization? Who will resist?

The initial willingness of members from the top of the organization with a strong focus around what the ultimate goal is (e.g. healthier pipeline, more major gifts, stronger participation) is important. They’re willingness to invest (both in their team’s success and financially) is pivotal.

From here, it’s important that this journey is made to be exciting for everyone involved. Inspire the rest of the team, explain how becoming an organization driven by data will make their fundraising endeavors smarter and easier. People are more willing to donate to causes that truly resonate with them, and this shift in thinking and operating (though potentially time consuming) will help indicate what those causes are, and from there, help segment these donors and tailor messages to them specifically. Make everyone in the organization understand that data-driven decisions are better business decisions.

Screen Shot 2018-07-11 at 3.17.59 PMFundmetric takes big data and uses it to segment constituents by identifying trends and patterns. Use this information to send better, more targeted campaigns and save time and resources.

Charities must realize that just like their for-profit associates, they need to be meeting the demands of their constituents by creating a more streamlined and personalized process, and that without the proper measures in place to find specific patterns hidden in their data, it’s not possible. Businesses everywhere are at a crossroads with the embracement of digitizing their cultures, but with automation and technology on the rise in all sectors, it’s the ones that don’t adopt that will be left behind.

Topics: charitable data, big data, segmentation,, data science, real change, automation, major gift, culture, leadership

Erika Cole

Written by Erika Cole

Erika Cole is a recent marketing graduate from Dalhousie University in Halifax, Nova Scotia. She is currently the Community Manager of Fundmetric, and passionately supports animal rights and child welfare initiatives.