Non-profits in the age of Big Data

In the latest issue of the Stanford Social Innovation Review, Jim Fruchterman writes of the “growing urgency in the social sector to make better use of data to inform decision-making and evaluate performance.” In this competitive funding climate, donors, stakeholders and governments increasingly demand evidence of impact. More and more, that evidence will be driven by hard data. Fruchterman suggests a framework to help nonprofits collect data to measure the “action and impact” of their work.


Non-profits in the age of Big Data

At the most basic level, organisations collect data to answer questions.

   - How much did we spend?

   - How much did we do?

   - How much did it matter?

Measuring the first of the three should be straight-forward.  All organisations are required to track their spending, so accounting infrastructures should already be in place.

Answering how much was done and how much it mattered is obviously much more complex for several reasons. Measuring impacts over longer timescales, demonstrating casual impact, or lack of funding are all daunting challenges.

For example, programs such as job training usually have short term, finite funding. Yet if the program is a good one, it’s likely to have demonstratable benefits five or even ten years later. Yet, proving direct impact would probably require a controlled, longitudinal study and that starts to get expensive.

Staff resistance can also be an issue.  A trained social worker, for instance, may not feel that data collection and analysis are an appropriate use of their time. 

And in some sectors, the issue of privacy poses a serious challenge. Non-profit work often serves society’s most vulnerable and most at risk such as children or victims of abuse. Even if we are able to gain the necessary trust and cooperation to collect the data, safeguards must be put in place to protect it.

The author insists that in spite of all of the challenges, social entrepreneurs, governments, investors, and donors alike must aim higher and expect more from their collective action. If we had the right data, Fruchterman insists, we can answer these questions, thus gaining insight that would enable us to ask better, more detailed questions about our work. And ultimately, that would lead to greater social impact.

Jim FruchtermanUsing Data for Action and for Impact, Stanford Social Innovation Review (Summer 2016)