Is data everything in the nonprofit sector?

Effective use of data is becoming increasingly important in the nonprofit sector. However, many organizations still have a ways to go before they can utilize this information effectively. Grant management software can make it easier for foundations to store and manage the data they collect from their grantees, which can help them make funding decisions that help to further their own missions.

However, decisions should never be made based on data alone, as a blog from The New York Times noted. Foundations need to make sure they are using data to back up decisions, not make them. Good platforms should facilitate collaboration between human beings in addition to providing data-based reporting that helps board members determine where assets are being used. Grant management platforms like CommunityForce‘s allow all staff members to have greater visibility into funding decisions and use the data mining capabilities as an additional measure to determine effectiveness.

Furthermore, foundations often need to be careful and carefully negotiate the difference between using data to prove their success or improve their operations, Markets For Good noted. Once again, it’s important for a software platform to enhance human decision-making capabilities rather than being a go-to source for reporting. While data-driven reporting capabilities can help foundations determine which organizations have used funding the most effective, the numbers aren’t the end of the discussion. The numbers may indicate that a proposed program was unsuccessful, but the data can be used to inform and improve future projects.

It’s often important to use data reporting in decision making, but foundations and nonprofits both need to be aware that data doesn’t tell the whole story, only part. More sophisticated platforms can help foundations use assets more effectively and maintain communication with nonprofits so that assistance doesn’t necessarily end with the delivery of funds.