What Is a Data Strategy + Why Nonprofits Need One

On the surface, “data strategy” might sound like a corporate procedure involving hours of planning and spreadsheets. However, a well-organized nonprofit data strategy can help you progress significantly toward your mission. 

Consider this: your nonprofit likely collects vast amounts of data, whether it’s notes from meetings with major donors, volunteer hours, or program outcomes. But without a clear plan for managing and using that data, valuable opportunities may fall through the cracks.

In this article, we'll explain a nonprofit data strategy, why you need one, and how to start building yours.

What Is a Nonprofit Data Strategy?

A nonprofit data strategy outlines how your organization will collect, organize, analyze, and use data to further your mission. A well-rounded data strategy should answer questions like:

• What data is our organization collecting, and why?
• What team or individual is responsible for managing data after we’ve collected it?
• What technologies or infrastructures do we use to collect, manage, and analyze data?
• How do we ensure data remains clean, up-to-date, and secure?
• What are we doing to ensure we use data ethically and protect supporters’ privacy?
• Are we using data to further our organization’s overarching goals?
• How do we use data to make decisions and improve outcomes?

Think of your data strategy as a roadmap. It should detail the “journey” data takes within your organization, from being collected to being transformed into actionable insights.

4 Reasons Your Nonprofit Needs a Data Strategy

1. Make data-driven decisions.

Access to accurate, well-organized data allows y​​ou to make faster, smarter decisions about your nonprofit’s programs and processes. Here are a few scenarios in which data can help you make the best decisions for your nonprofit:

• Allocating budget: Analyze real-time data on your organization's various expenses and program results to allocate funding strategically.
• Enhancing your website: Refine your website’s structure and user interface by pairing user experience (UX) principles for nonprofits with metrics like time spent on page, bounce rates, and heatmapping.
• Evaluating programs: Tracking metrics like participant attendance, program graduation rates, and total services delivered objectively measures each program’s performance.

Nonprofits can also make forecasts or predictions to aid in long-term planning. For example, by studying your financial data from the last five years, your nonprofit can identify cost-saving opportunities and strategic investments to help offset the impacts of inflation on your bottom line.

2. Streamline and consolidate data.

Most nonprofits collect data using multiple tools, which can lead to fragmented or siloed data. This makes it difficult to actually use the data, as you’ll lack a comprehensive, real-time view of your organization’s performance. 

A well-crafted data strategy combines all this information into a unified system. By consolidating data, your team can eliminate redundancies, reduce errors, and create a single source of truth. The key steps to centralizing your data include:

• Audit and clean your existing data, removing any duplicate, outdated, or inaccurate information.
• Use a constituent relationship management (CRM) system designed for nonprofits that supports your needs and offers robust reporting tools, extensive integrations, and other key features.
• Import data into your CRM and set up integrations with any external tools to automatically sync data to your CRM.
• Establish ongoing data hygiene protocols to keep data clean and up to date.

This process should reveal any glaring data hygiene issues (e.g., duplicate records or lack of standardized entry) along with gaps in your data. There are a few methods for filling in missing data, such as appending or enrichment. Deep Sync explains that data enrichment supplements the data you collected directly from supporters with third-party databases, ensuring you have the most accurate, comprehensive information.

3. Boost donor engagement and retention.

With a data strategy in place, you can analyze trends in donor behaviors, personalize communications, and build deeper relationships. For example, a comprehensive data strategy allows your nonprofit to:

• Predict and prevent donors from lapsing by identifying “at-risk” donors using cues like decreased email engagement.
• Personalized outreach, such as segmenting donors by giving frequency, demographics, or interests, to share tailored messages.
• Share timely impact updates based on your programs’ performance data.
• Offer tailored donor and member portals, allowing supporters to view their giving history, update personal information and preferences, and access personalized content or event recommendations.

By fully utilizing its data, your nonprofit can take proactive steps to better understand its donors and build stronger supporter relationships. 

4. Stay compliant and secure.

Data security is critical to preserving supporters’ trust in your organization and complying with data privacy regulations. This is especially important with the rise of artificial intelligence (AI) tools and concerns around users’ privacy in the nonprofit sector.

For example, say your nonprofit uses a tool powered by autonomous AI agents. Fíonta’s guide to Salesforce’s Agentforce tool explains that these solutions can enhance donor engagement, volunteer management, and program outcomes tracking while saving staff time. However, your organization must consider how these tools use data and whether information you input into these platforms will be shared with any external entities.

Your data strategy should include policies for storing, accessing, and sharing data responsibly, helping you comply with legal regulations and protect your constituents. Name acceptable AI technology your team can use, outline standards for ethical AI usage, and clearly explain what types of data staff can and can’t feed to AI algorithms.

How to Build a Nonprofit Data Strategy

These basic steps can guide your efforts to develop a nonprofit data strategy:

1. Audit your current data and practices. Inventory your data sources and tools, and identify gaps and duplicate information.
2. Outline your goals. Align data collection and analysis with your nonprofit’s strategic priorities and broader organization goals to define success.
3. Assign tasks to staff members. Choose a team or individual to lead your data strategy work, ensuring cross-department input where necessary.
4. Create a data governance plan. Set detailed guidelines for data quality, who can access what data, and privacy standards.
5. Invest in tools and training. Evaluate your CRM or data warehouse solution to ensure it matches your needs, and, if it doesn’t, consider migrating to a new system. Provide staff with technology and data literacy training so everyone has the knowledge and resources to record and analyze data.
6. Start small and iterate. For nonprofits developing a data strategy for the first time, consider piloting your approach with one team or project and collecting and implementing their feedback before rolling out the plan to your entire team.

A strong data strategy should equip your nonprofit to work efficiently, maximize your impact, and reach more beneficiaries. If your nonprofit struggles to consolidate its data, is migrating to a new CRM, or simply wants input from an expert, consider working with a professional data and technology consultant to shape your data strategy.

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Author Bio

Karin Tracy, VP of Marketing at Fíonta, is a seasoned designer and marketer with a passion for serving nonprofit organizations and being a small part of bettering the world. She is a certified Pardot Consultant and Marketing Cloud Email Specialist, a fan of automation and reporting, a lover of animals, and devourer of popcorn.

At Fíonta, Karin drives marketing efforts for all internal and external projects. Her direct service work is focused primarily on marketing strategy and automation for Fíonta’s MCAE (Pardot) clients.