Updated: May 20, 2019
It is surprising to many but sometimes nonprofit & association leaders, especially founders “on a mission,” do not think about their organization as being a business—but it is. In this article, we explore why the curation of data (business intelligence) is critical in nonprofits today.
Do You Need Business Analytics for Your Nonprofit?
This may seem quite ridiculous to say, isn't it?
Every nonprofit organization must think like a business in order to survive. From the basics of paying employees appropriately and on time to the complexities of competing with other nonprofits for scarce donor and grant resources, nonprofits must be willing to think practically and strategically if they are going to be around long enough to make a difference in the world.
This is why it is important for leaders in nonprofit organizations to both know about the value of business intelligence and be willing to make use of its tools when it comes to making important decisions.
The phrase “business intelligence” is about using a “decision support system” to aid in decision-making and planning, and it was created as part of the process of modeling how computers make decisions.
The term was first used in 1958 by an IBM researcher, who realized that businesses could gain a critical advantage in leading action toward a desired goal when they took a look at the interrelationships between facts and aspects in an organization.
Today, business intelligence and analytics is an entire field, using the following methodologies to help organizations with their strategic planning, goal development and actions plans such as these:
Measurement (these days often in the form of performance metrics which can gauge the effectiveness of organizational procedures and enhancements)
Analytics (building an analysis of processes within the organization to help support better understanding of the business and its performance)
“Enterprise” reporting (where “enterprise” means viewing the organization from a strategic perspective, as opposed to operational reporting on the success of certain operations)
Collaboration (getting unconnected areas of the organization to work together toward a common goal)
Knowledge management (using certain business tools to facilitate the adoption of critical business knowledge and insights with dashboards)
So what might this look like for a nonprofit association?
If you have a certain campaign that has been a part of the organization for years, you can measure its effectiveness over time, analyze what processes in your nonprofit are supporting the campaign, step back to make sure that this campaign supports the needs of the nonprofit now and in the years ahead, work to get full-organizational support for the campaign, and recognize how its value plays into marketing and communications for your organization’s mission.
True, business Intelligence is built into many nonprofit database software today, but are you using it? Further, if you have multiple software systems, it may be important to find solutions to integrate the data either directly via an API into your donor or membership database. Or, find a customer data platform which can pull it all together for you. Either way, you need to include all data points which you organization has in order to find true and complete intelligence.
If you would like to discuss a few options and/or connect with a partner who can deliver a solution, feel free to contact us today.