On the surface, the average nonprofit appears very different than a business. With any for-profit franchise, the emphasis is inevitably on the bottom line—on learning how to find and leverage competitive advantages to ensure success, and to continue that growth in such a way that is sustainable for the business in the long-term.
As it turns out, nonprofits operate much the same way. It’s a common misconception that nonprofits don’t make money—they’re just not allowed to make a profit, as the name suggests. The money that they earn goes toward their initiatives and back into the organization to keep it running. As a result, they’re as much beholden to the tenets of a successful business like any other—perhaps more so, because in many cases, the value proposition is more abstract and harder to sell to the average consumer.
Despite the success of widespread philanthropic initiatives like Giving Tuesday, the average nonprofit still needs to find ways to sustain itself throughout the year. Success in this regard often hinges on the ability of an organization to spend its time efficiently, reaching its intended audience and connecting with the right donors. To do this, many have begun turning to data analytics.
Often used by businesses for a myriad of reasons, data analytics tools allow for nonprofits to investigate their own performance and identify potential areas of improvement. However, fewer than half of nonprofits do not take advantage of these opportunities—45 percent, according to the Salesforce Nonprofit Trends Report. Beyond that, even more nonprofits struggle to leverage the data they collect into meaningful insights that can be used to improve their business models.
Make-A-Wish, one of our partners here at the Finker-Frenkel Family Foundation, leverages data to their advantage by not only discovering potential areas of growth but gathering statistics about the efficacy of their programs to help develop their story further. According to a Wish Impact Study, 89 percent of surveyed doctors and other medical professionals reported that they believe a wish experience can influence physical health.
The organization also provides information about the type of wishes granted and the frequency they fulfill them—perhaps unsurprisingly, the majority of wishes granted involve travel, and a large percentage are related to the Walt Disney Company. Even with these insights alone, Make-A-Wish is able to identify and capitalize on areas of need for many of their wish kids and set up the infrastructure and partnerships necessary to both secure donors and provide an incredible experience for children and their families.
Nonprofits can also use data to make their donation process as efficient as possible and create easy avenues for potential donors. For Make-A-Wish, this involves a donation screen that not only suggests donation amounts but provides easy options for donating on a monthly basis. Though donation processes are regulated to some extent, studying the data of common donation patterns can give nonprofits the knowledge of what people are willing to give and remove as many barriers to entry as possible.
It is in the best interests of nonprofits to invest in data solutions. With Make-A-Wish, we see that not only do their data analysis efforts work to bring in more donations, but they help fulfill the needs of wish kids in the most efficient way possible.