Solving the Nonprofit Data Paradox

 | NONPROFIT-MANAGEMENT

When you have something valuable, the more you have of it, the richer you become. This applies to gems, precious metals, and any number of valuable resources. The same is true for more intangible assets—having more time or talent increases the overall value of those treasures, too.

In the Age of Big Data, countless companies are turning their wealth of data into an extremely valuable asset. Unfortunately, the same is not true for many nonprofits and their data. In my bestselling book, Data Driven Nonprofits, I call this the Nonprofit Data Paradox: the more you have of something valuable, the less valuable it becomes.

In the book, I explore how nonprofits struggle with maximizing the value in their data. It should be a valuable asset that enriches nonprofits and helps them grow. Instead, many get overwhelmed by the flood of data, fail to maintain it, or choose to ignore it all together.

Data is fragmented across multiple systems and structures. Donors, members, alumni, activists, volunteers, and any other group the nonprofit engages with are kept apart in their data cages. The data piles up and up. Oceans of data in silos. Gathered up in the digital attic for storage. Hidden hoards instead of hopeful treasure. The more you have, the less valuable it becomes.

Let’s start by noting that the data nonprofits have about their supporters, volunteers, activists, members, and other constituent groups is arguably the most valuable asset they have. If data was listed on a nonprofit organization’s balance sheet, it would likely be worth more than just about anything else. The data is immensely valuable because it is the raw material of information and insights.

If you want to know the answers to important questions like “which supporters are the most loyal,” “which email campaigns have been the most successful,“or “what programs need to improve the most,” then you need to leverage your data. Relying on tribal knowledge or gut instinct alone will not help you drive results. The hidden treasure can be found everywhere in a nonprofit organization’s data.

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