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Guide to Data-Driven Nonprofit Decision Making

In uncertain or difficult times, strong decisions count more than ever. For nonprofits, this means that financial and business strategies need to be informed by data.

Today, we’ll look at why data-driven nonprofit decision making is more critical than ever and how you can use data to your advantage. So grab a cup of coffee and let’s dive in!

What is data-driven decision making? 

Everyone wants to make the best decisions. This is especially true when money and the success of your mission are at stake. Data analysis helps you make the best and most informed decisions.

Data-driven decisions are exactly as they sound: choices made by analyzing cumulative, reliable information. This data is generated by people, resources, events, and other relevant information related to managing a business, with key emphasis on results and measurement.

Informed decisions carry the best chance of success, whether success looks like healthy financial investments or a well-structured nonprofit program. The data you collect and analyze give you a clear indication of where opportunities that will help you be successful can be found.

How does data empower decision making? 

Data-driven nonprofit decision making, as well as regular for-profit business strategies, relies on both qualitative and quantitative data.

Qualitative data refers to information that isn’t measured in numbers but rather assessed in the results and observations of actions or initiatives. Qualitative data provide a clear description of the responses generated by your organization.

This information gives you a general pattern you can look for in order to understand cause and effects in your nonprofit. This data teaches you what trends you should be aware of so you can build strategies around them. You can gain qualitative data in many ways ranging from simple on-the-ground observations to more complex and time-consuming individual interviews.

Quantitative data are statistical in nature and can be measured and assigned numerical values. While qualitative data may help you answer questions of why mission stats and results are the way they are, quantitative data pinpoints by how much or how many. While qualitative data gives you a broad array of information, quantitative data helps you measure results in order to pinpoint precise return on investment or risk.

Being able to identify the strengths and weaknesses of your nonprofit through data helps you act with certainty and lead your mission more proactively. Identifying trends with qualitative data and assessing quantitative data following your efforts helps you meet goals more effectively.

Here are some additional ways that data can help your decision-making process and results:

  • Create key performance indicators
  • Identify and mitigate risks
  • Reduce expenses
  • Boost donations and revenue potential
  • Make organizational improvements
  • Maximize outreach potential

Critical data for nonprofit decision making

As a nonprofit, there are several areas of your industry and unique operation that you’ll want to closely monitor to remain on target for mission success. While data can fall into the quantitative and qualitative categories, there are many types of data. All of these data categories can be examined to indicate strengths, weaknesses, threats, and opportunities for your nonprofit. Let’s see the main areas you should concentrate on.


Your nonprofit probably relies on equipment, software licenses or subscriptions, and essential services in order to function. You’ll want to measure the costs associated with these resources and determine how they help you and your team succeed in the mission. If resources are not helping you, they are driving up expenses. Are there resources that you can cut?


Every non-profit will have essential costs like staffing and operating expenses. Being able to collect data on these finances, helps you control and even reduce expenses. You may see that there are expenses you can reduce or eliminate, helping you funnel more funding into the mission.

Funding and Donation Data

Donations and grants are the major sources of revenue for nonprofits. Collecting info on donor demographics, causes they are supporting, payment methods they use, amounts they donate, when they donate, and opinions about related issues to your cause are critical.

This data helps you modify your outreach methods and strategies to help you serve the community and get more support. Grant management is highly important too — you’ll want to monitor the time and efforts made to gain grant awards and how much they contribute to your finances. Your accounting team should collect all relevant data surrounding these activities to ensure the accuracy and efficiency of your fund accounting process.

Program Data

The events, services, and general programs associated with your mission should be monitored and quantified. Again, cost and revenue data should be assessed to identify the return on investment for all that you do.

You’ll want to see how much funding your programs raised, whether the expenses generated were too great, and identify how effectively you connected with donors. All of these data help you refine program dynamics to be more cost-effective and engaging. You’ll also see ways your staff can improve programs.

Data-driven nonprofit decision making creates a sustainable mission

Despite the various forms data can arrive in, the core value of this information will be in what it tells you about the financial dimension of your operation. To achieve your mission, your finances need to be aligned to do so.

You can’t complete your work, impact others, and successfully engage patrons and volunteers without financial resources. Using your data to make the most economical decisions will help you apply funds in a way that best benefits your mission. Analyzing the financial returns will also indicate ways to refine your nonprofit’s strategies to ensure its continued sustainability.

Use professional data analysis

Having data is one thing, knowing what to look for and how to apply these findings is another. Again, the financial and strategic value of your nonprofit’s data will need to be applied in ways that will have measurable effects in order to be of value. For this, you really should consider using accounting and nonprofit strategists that are experienced in taking this information and making action plans to help organizations meet their goals. 

Temple Management offers data-driven decision-making services for a wide range of nonprofit and for-profit businesses. Staffed by qualified Certified Public Accountants (CPA)s and business strategists, we are fully equipped to help you analyze and use your data to facilitate smooth and efficient operations.

Whether you’re just starting out or looking to grow your organization, Temple has helped nonprofits of every stage meet their goals.

Still concerned about COVID-19 and social distances? No problem! We can operate totally remotely and deliver you fast results through our cloud-based tools. Give us a call today to get started on turning your data into results!


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