What not-for-profit leaders should focus on to improve data maturity
Sian Basker, Co-Chief Executive, Data Orchard
I’m so delighted to be back talking to you all about our latest State of the Sector report. When we launched our online Data Maturity Assessment back in October 2019, one of the big drivers for us was unlocking insights about data maturity in the sector and how to improve it. It’s since been used by thousands of users, from over 500 organisations. They come from all kinds of sectors, and from all over the world. In the last year alone, the tool was used by well over 1,000 people.
Our latest report explores data from 2021, focusing only on validated non-commercial organisations: a total of 937 respondents from 162 organisations. It follows up on our first State of the Sector report (which analysed data from 2019 and 2020), with reassuringly similar findings. This is strong validation for us and means we can be more confident in how authoritatively the results describe the reality of data maturity in the not-for-profit sector.
So, what did we find out? Well quite a lot really. The data provides some really important insights into the state of the sector, particularly in relation to leadership, skills and culture.
Non profit leaders are not equipped to make data-informed decisions
One striking stat from the 2021 data is that while almost all organisations say their leadership think data is important, just 6% think leaders actually prioritise data as a vital resource and understand how to use it.
Lots of data exists (although it’s not always collected in the most efficient ways, with 40% still using paper methods moderately or extensively), but only 2% of respondents feel that their leadership teams are actually using that data to make data-informed decisions.
A majority (63%) say their leadership is not convinced about its value. Worryingly, 9% say leadership don’t use data for decision making at all.
This could be due to a lack of data skills in leadership teams. It may also be due to barriers accessing meaningful insights from disparate data sources.
There’s a lack of data skills in the sector
Consistent with last year’s results, our research shows that a lack of data skills remains a significant weakness across the sector.
Over half (53%) say that there is no one with data analytics expertise within their leadership, limiting the ability to access meaningful insights from data. A major obstacle is people not knowing what skills and capabilities they need, nor where they can access trustworthy advice and support.
Skills was the weakest area for all non profits, and this is reflected in all levels of seniority. Without undertaking skills audits and training teams, collecting data and ensuring it’s good quality will not be enough – it’s how it is analysed and used that matters. Only a quarter say leaders invest enough in data related resources: people, skills, learning and tools.
It all comes back to organisational culture
There’s a tendency to think that adopting new digital tools and technology will be the key to helping the sector make the most of its data, and certainly there’s lots to do. But actually it seems to be culture that’s the real influencing factor.
Our analysis this year was able to show strong positive correlation between the culture of an organisation and its data maturity. Whereas scoring highly for the tools theme had much less influence. So while databases and CRMs are important, the most effective non profits have a culture that encourages innovation and curiosity when it comes to data.
For third sector leaders looking to improve their organisation’s data maturity the clear message is that they would gain more from focusing on their culture, rather than introducing shiny new tools.
This aligns with learning shared by Dr Jenny Andrew, Head of Data at The Chartered Society of Physiotherapy (CSP), who led a Data Maturity Assessment in her organisation. In this webinar she talked about how the CSP are ‘reigning in their urge to run for bigger and fancier tech’ and instead focusing on organisational factors, including setting up federated data governance to help align data activities to organisational purpose.
Jenny says it’s all about 'getting data where it needs to go and where it’s going to maximise returns’. ‘The assessment gives us a baseline against which we can start to measure impact. I hope that when we come to reassess this at the end of the year, we're going to see more consistent scores for data leadership all the way across the board.’
Proving that increased data maturity reaps rewards
We know instinctively that being more data mature leads to better efficiencies and impact for non profits. But it’s been great to be able to prove it in our findings this year. It was clear from our data that those leaders who are already putting effort and energy into improving data maturity are seeing strong benefits.
As data maturity advances, organisations do invest more time in data, but proportionally, the rewards and benefits grow at a much faster rate. For example, compared to an organisation at ‘Learning’ stage, a ‘Developing’ organisation increases its average time spent on data by 7%, but increases its ability to use data to evidence the need and problems they are addressing by almost 30%.
Wouldn't it be wonderful to see the whole sector reap these rewards? That’s why it’s so important that we encourage leaders and decision makers with an interest in strengthening the sector to invest more in building the knowledge and skills to advance data maturity.
Discover more about the findings
Our 2021 State of the Sector report summarises all of our findings into 7 key insights:
The not-for-profit sector is still learning about data.
A lack of data skills remains a major weakness for not-for-profits.
Not-for-profit leaders aren’t making data-informed decisions.
Not-for-profits would gain more from focusing on their culture, rather than tools.
Data maturity takes time and effort, but the rewards are worth it.
Data maturity isn’t…and is… about the money.
Organisations aren't taking advantage of digital tools to make data work for their cause.
Of course it also digs down into a lot more detail. If you don’t have time to read the full report, I recommend you read the executive summary (it’s only short) which describes those 7 key insights in just a couple of pages.