How Nonprofits Can Use Data to Solve the World’s Problems

Like their for-profit counterparts, charities are starting to embrace Big Data as a means to perform more efficiently and share that performance with potential donors.

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Nurse-Family Partnerships

Nicole Lenzi-Hoffman, a nurse working with the nonprofit organization Nurse-Family Partnerships, gathers information about a client and her daughter. Nurses working through the nonprofit spend two years working with first-time mothers living in poverty.

When Uzoamaka Nwankpa visits first-time mothers living in poverty in Tucson, Ariz., she’s more than just a nurse. She’s a therapist, helping a pregnant, recovering heroin user understand how her addiction traces back to her own childhood trauma. She’s a life coach, helping a mom with a two-month-old baby set goals to finish college.

But perhaps most surprisingly, she’s also a data collector, amassing thousands of points of information about the women and children she works with to not only help her clients, but to improve the effectiveness of the nonprofit organization she works with.

In fact, Nurse-Family Partnerships, the national nonprofit that works with local agencies to put nurses like Nwankpa to work, values data above all else. The organization pairs poor, first-time mothers with family nurses that make biweekly home visits from the prenatal period until the baby is two years old. All along the way the nurses are meticulously documenting the development of mother and child, tracking everything from the growth rate of the baby to prior instances of domestic abuse for the mother. In all, the organization tracks 2,000 different variables about each family, gaining an ever-growing knowledge base about the types of women it aims to help.

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“We’re able to provide reports about what’s happening with the mother, what’s happening with the child, what activity the nurse is undertaking and ultimately use that data to help the nurse do an even better job,” says Sandy Dunlap, the nonprofit’s chief operating officer. With so much information available, the program is able to morph on the fly—a spike in emergency room visits might mean nurses need to provide more counseling on infant safety, while a group of babies under average weight may show the need to emphasize the importance of breastfeeding more. Individual nurses are encouraged to use the data they gather to adapt the program as needed.

Though Nurse-Family Partnerships is decades old, their sophisticated, data-focused model seems poised to become the standard for how a non-profit should operate in the 21st century. With charitable giving in the United States yet to return to pre-recession highs, nonprofits find themselves competing harder than ever for dollars from foundations, government grants, and individual donors. Data, already growing omnipresent in the for-profit sector, could hold the key not only to convincing people to donate money but also to performing work that is more efficient and effective.

Data collection is not a new idea in the nonprofit sector, but it has mostly been touted as a means of supporting financial accountability and transparency in the past. A recent survey of about 400 nonprofits by the Nonprofit Technology Network found that while 89% of the nonprofits surveyed tracked data about their finances, only 50% consistently tracked data on how their work affected the people it was designed to help. But as in every aspect of life, from the electing of presidents to the raising of children, experts say data is starting to trump intuition when it comes to funding choices.

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“There’s a shift that’s occurring across the sector and will continue to occur mostly because there’s just less to go around,” says Nancy Roob, president and CEO of the Edna McConnell Clark Foundation. “We want to make sure that the limited dollars that there are really focus on what’s working.”

Edna McConnell Clark, which doled out $53 million in grants this year, is among a legion of foundations pushing nonprofits into the data-driven future by awarding money to organizations that have found ways to turn their lofty stated goals into specific data points measuring impact. Youth Villages, a grant-winner that provides housing and programming for at-risk children in the foster care and juvenile detention systems, measures success not by the number of young people served but by the percentage of those young people who are successfully living at home 12 months after being discharged. Students who go through the program are surveyed 6 months, 12 months, and 24 months after leaving. Data gathered is used both to measure success and to highlight areas where program structure could be improved.  “We didn’t just want to give kids a happy experience,” says CEO Patrick Lawler. “We wanted to give kids a happy life.”

Of course, outcome measurement and research costs money, which is tough to come by for nearly every nonprofit. While foundations are often prepared to foot the bill for data-measuring infrastructure, individual donors, who contributed 73% of the United States’ $298 billion in charitable giving in 2011, continue to be a harder group to persuade. “There’s still going to be a mix of emotional triggers and what some might call more rational factors at work in deciding where to allocate funds,” says Darin McKeever, a deputy director at the Bill & Melinda Gates Foundation. “Most donors just want to ensure that they’re giving to a nonprofit that won’t waste their money.”

While 90% of individual donors say that nonprofit performance is important when choosing to allocate funds, only 30% actually research to find the most effective nonprofit when giving money, according to a survey by GuideStar and Hope Consulting. Organizational efficiency is often a high consideration for donors, who may want to see every penny go directly to people in need. Experts say such an approach can be ineffective in the long term, especially when aiming to make a permanent change in a community. “There’s certain kinds of organizations—education and health organizations for example—where sometimes you actually need really good infrastructure and capacity and staffing, which is all overhead, in order to do the work well,” says Alnoor Ebrahim, an associate professor in the social enterprise initiative at Harvard Business School.

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Comparing how many cents on the dollar go out into the field is an easy, apples-to-apples comparison donors can make among nonprofits, which currently doesn’t exist for comparing social impact. But projects now in the works could help givers make more informed donation decisions. Charity Navigator, a popular website that rates nonprofit organizations based on their finances and accountability, will begin monitoring how nonprofits report the results of their work this month, with plans to make results reporting the dominant criteria in their ratings system. Various foundations have launched initiatives aimed at implementing standards for reporting data among nonprofits, which would make it easier for nonprofits to work together and for donors to keep track of exactly what they’re accomplishing. “As more information becomes available about a nonprofit’s impact, that kind of information may be even more relevant to the way donors make decisions about how they make their gifts,” McKeever says.

Classic appeals by charities to sympathy and kind-heartedness aren’t going away anytime soon. But for the nonprofits heavily invested in the world of data, they’re hoping to make an appeal to donors’ minds, too. “Investing in a program of this nature is not just investing in the cost of putting a nurse in a car and sending her out to visit a mom, but it’s an infrastructure that ensures that that nurse will be successful in the short and long term in delivering the program,” says Nurse-Family Partnership’s Dunlap. “Increasingly [donors] understand that it’s a science.”