Nonprofits Should Leverage Big Data for Bigger Impact

The data revolution is a trend that no organization or enterprise can afford to ignore. Every minute Google conducts nearly 4 million searches, YouTube plays over 4 million videos, Twitter adds almost 500,000 new tweets, and Americans use over 3 million gigabytes of internet data. While business decision-makers use the deluge of data sets to transform the for-profit world, nonprofit leaders can take advantage of big data analytics to further their charitable missions.

Nonprofits can use big data analytics to accomplish two general objectives. The first is to better predict patterns of donor behavior. Some nonprofit institutions of higher education, for example, have already reaped huge rewards in fundraising through predictive analytics. Lincoln Memorial University in Harrogate, Tenn., doubled its donation revenue in a single year by partnering with QualPro, a consulting firm that has used data-driven analysis to help clients improve their donor marketing strategies.

The University of South Dakota has also used big data analytics to strengthen its fundraising. The school partnered with the data-consulting service Target Analytics to identify likely donors based on various characteristics and behavior patterns. By 2016, the administration’s $15,000 investment in analytics had returned $61 million in contributions.

As impressive as these gains are, nonprofits using data analytics may achieve even more impressive results as the technology improves, incorporating “smarter” data sets generated by social media traffic, for example.

Equally important, nonprofits and social-mission enterprises can use big data to enhance program effectiveness and better advance their core missions. One way is through improved discovery of “unknowns” and better mapping of complex patterns.

A striking example comes from organizations fighting human trafficking around the world. Many of these groups are increasingly using big data sets such as financial records and online searches to geographically map trafficking trends. The Polaris Project runs a national hotline for trafficking victims and works with Palantir Technologies to monitor trafficking and help connect callers with vital social service resources in their area. As Stefan Heeke, an expert in the data field, explains: “The power of big data for social impact is really predicting the crisis.”

UNICEF is another organization utilizing big data to further its mission. Using an international survey program, the United Nations affiliate identifies the world’s worst areas for malnutrition and infant mortality. Mapping and predicting complex social patterns allows such groups not only to effectively focus their program resources, but also to better communicate their challenges and successes with donor constituents and other stakeholders.

As innovation continues to drive down the cost of prediction, nonprofits eager to improve their effectiveness will increasingly embrace data analytics. Understandably, many nonprofit leaders will find such a task intimidating and overwhelming—no surprise given the level of expertise often needed to take full advantage of big data. This excuse for complacency will eventually wear thin.

While analytics experts may someday become a ubiquitous feature among nonprofit and for-profit organizations alike, nonprofits can begin leveraging big data now, by outsourcing the complex work to consulting firms providing technical services to clients hoping to keep ahead of the curve.

The sooner that nonprofit leaders realize the advantages of big data analytics, the sooner we can all reach a more healthy, educated, and peaceful world. And that prospect doesn’t require advanced training in predictive analytics to appreciate.

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Nathaniel J. Bennett is a Policy Researcher at the Independent Institute.

Nathaniel J. Bennett is a Policy Researcher at the Independent Institute.
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