3 Things Every Nonprofit Leader Needs to Know About Using Data to Show Impact

As a self-proclaimed data nerd, I love digging into a piece of research or sifting through the latest social science data to glean insights that I can apply to my work. But I know that’s not the case for everyone. Over time, I’ve learned that people often fall into two camps when it comes to facts and figures.

The first group thinks data is king, and you can measure everything if you have the right questions and the right data. The other group is less strident about it. They may agree that data is useful, but they fear the focus on data minimizes the impact that is hard to measure. And often the practical reality for them is that trying to use data in any systematic way to inform their work feels too cumbersome and costly to gather (or analyze), and they just give up. I think there’s a better middle ground for us to walk when it comes to data and the insights we can glean from it. Over time, I’ve developed three guidelines that I follow when considering data, and I share them below for my fellow nonprofit executives to consider.

 1. Just Start Somewhere.

If you’re in the second camp (“I’d love to use more data or use it more effectively, but I can’t because I don’t have enough money, time or capacity.”), this reminder is especially for you. Sometimes, we become so overwhelmed with the enormity of a project in front of us, we fail before we even begin. I’ll give you an example of this in my work at New Moms, the social service nonprofit I lead in Chicago.

For years, I wanted do a Social Return on Investment (SROI) study of our program model, but it was time-consuming and expensive, and required a unique set of skills and experience we didn’t have within our team. Eventually, we got special funding for the study through a grant provided by a local funder who shared an understanding of how powerful this information could be for us. Without their investment, it would have been very difficult to fund the research on our own.

Before we could start the SROI study, we spent several years taking steps toward that goal by developing systems and structures to help us consistently collect quality program data. In fact, the researchers we worked with for the SROI study told us that was the biggest factor for our success. We took those steps without knowing for sure when and how we’d conduct the SROI, but we didn’t let ourselves become paralyzed by the enormity of the task. We took that first step, which led to another… and another, and when the opportunity presented itself, we were ready. (You can read more about the results of our SROI study here).

For those of you reading this article who are at the beginning of thinking about how your organization’s data can be used more comprehensively, the important thing is to take the initial steps forward. Get your data collection systems in order and talk about your desires to do more with your funders. You want to be ready when the opportunity presents itself.

 2. Measure Some Things. Don’t Measure Everything.

There is often perceived pressure from funders to provide a constant stream of data to demonstrate the value of nonprofits’ work. At best, data is a tool to help us learn, not simply a means for validating our work. It can show us what is working, where we have gaps and which things that need to be improved. The right data helps us go beyond our intuitive sense of, “I think we’re having an impact.” So we rightly collect data to help us make sense of our organizations’ work and show our impact.

Don’t let the expectation that more data is the answer to all questions force you into the “collect first, analyze later” trap. There’s an art to research and data collection—identifying the right questions, mapping the data points, analyzing the results—that takes some time to cultivate. You can over-collect and over-analyze, and you and your team will simply become overwhelmed. When we have too much, we lose sight of what really matters and waste our precious capacity on the wrong things.

When I first came to New Moms, I asked the team if we had an organizational dashboard, and they responded with an enthusiastic “Yes!” before handing me an eight-page, single-spaced typed document. I laughed, bewildered, and said, “This is more like a research paper than a dashboard!” It was dense and difficult to read. The team who drafted the dashboard every month thought it was all information the board would want to know, but, of course, it turned out no one was reading or using it.

We started to create a simple one-page dashboard for the organization. Now, we use this dashboard every quarter, as well as a high-level snapshot of our financial data, critical programmatic outcomes that are tied to our mission, fundraising progress and other key indicators for our organization. If one of those lead indicators starts to go awry, we know to course correct. The important win with this format is that because of the simplicity of focusing on just a few important leading indicators, rather than all the data that is available, we actually get people to read, understand and use the information. It can inform board and leadership decisions in ways that pages and pages of a comprehensive reporting of all the data available will never do.

Data has to serve our goals in order to be meaningful. It is our job to cultivate the lens that we use to review and focus on it. Tracking the right measures and then drawing attention to those is how we make meaning from data. People have access to an unprecedented amount of information today, which means our job as leaders is to ensure we are creating meaning and directing people’s attention to the right things. This often means being ruthless in how you focus the attention of your organization’s data. Having the backup data is important, but be critical in how you think about what really matters and how you center attention on it.

3. Remember Data Is Only Part of the Picture.

I spent years in academia, pursuing my master’s and doctorate degrees focused on nonprofit administration. I enjoyed the rhythm and rigor of academic life, and I came to appreciate the research that is so fundamental to that experience. I still encourage my team to seek out better ways to measure our work, but at the same time, we have to remember that data is just one mechanism to understand success, particularly when it comes to social sciences. When we are dealing with human lives, data alone doesn’t tell the whole story because it doesn’t capture all the nuances of the human story.

While there is recognition in the nonprofit sector that demonstrating impact is important, and thus data is needed to do so, there can be an accompanying frustration that organizations are pushed to be too outcome-oriented and miss some of the beauty of their missions in action. Data is a tool we can use to make meaning out of the work we do, to hold ourselves accountable to the people who invest in our mission and to ensure that we’re learning and getting better as we strive to achieve our missions.

At New Moms, learning how to use data to demonstrate the evidence and impact of our work was ultimately just an extension of our own accountability around that work. We use data to hold ourselves accountable to the participants we serve, to the people who have invested in us and to ourselves. Of course, we will continue to share data in tandem with testimonies from our participants and their families because stories are how we translate the black-and-white nature of the numbers into contexts that have meaning for the audience. As a sector, we have to find a way to make meaning out of the data and use it to tell our story.