Thursday, May 23, 2013

Are nonprofits embracing big data?

Donations by Age - Does data help your donation?
Most of the uses or applications for data are either driven by for-profit organizations and a few government agencies. The question I ask myself is if there are nonprofit organizations that are also making use of some of the big data techniques. Based on my view it does not appear that nonprofits are on the fore front of trying to make use of data. All of them have sufficient and legally required data to keep the non-profit status but nothing beyond that. Very few of them historically have used data techniques to be more efficient. But, some are planning on using big data in the future. Maybe its the euphoria around big data that has permeated or maybe there is a new nonprofit manager who has seen the benefits of data visualization and such and is willing to experiment with it. Anyway, the planned use of big data techniques is very welcome but with a word of caution that the hype phase will be short lived and a realistic picture would emerge for some of the early adopters of big data in the nonprofits.

One way to start the journey for a nonprofit is outlined by Jacob Harold in his blog post titled 'Nonprofits: Master "Medium Data" Before Tackling Big Data' on HBR. He recommends the following in his blog:

...nonprofits face legitimate challenges in gathering, organizing, and using even basic data. First, most nonprofits are simply too cash-strapped to invest in cutting-edge information systems to track their activities, engage with their stakeholders and understand their context. Second, the diversity of organizations makes comparison difficult: how could we possibly compare the work of the University of Chicago to a homeless shelter in Albuquerque or to Greenpeace? Third, it isn't easy to know which are the most effective programs for battling climate change or child slavery or homelessness. Finally, the unique economics of the nonprofit sector — the buyer (donor) is frequently a different person from the user (beneficiary) — interrupt the direct feedback loop that often drives innovation in business.

I would tend to agree with his advice. Medium data is one step closer to end goal. Having said that, I would love to hear of a nonprofit that has successfully incorporated big data.