If you work for a grant-making organization, you obviously want the non-profits who receive your dollars to succeed in helping you achieve your goals. There’s at least one way to do this: give them more money! But as we know in the non-profit sector, many times the challenges aren’t merely financial. Specifically, countless organizations have a desperate need for specialized expertise in areas outside of their core competencies – which, in the midst of fighting for social change, can be a challenge for grantees to find time to seek out.
For this reason, many foundations connect grantees with valuable consulting services to inform their strategic planning, board development, and fundraising. As essential as these areas are, though, we’ve found that relatively few grant-making organizations are considering another domain that’s more important than ever, but where a majority of grantees still lack critical expertise: developing a data and analytics strategy that improves strategic decision-making, and that strengthens how non-profits measure impact.
Optimizing the use of data is one of the most effective pathways to creating sustainable change. Yet many grantees are unlikely to seek out this kind of support on their own. This gap is where grant-making organizations can make all the difference.
Enhanced data also reduces the perverse incentives that can come when organizations focus on easy-to-measure metrics
Why should foundations actively support grantees’ ability to make systematic use of data?
It’s possible that some foundation executives may see data and analytics support as “small potatoes”, compared to other well-known priorities like strategic planning. Others may think that grantees should secure these services themselves. But to us, there are at least four big reasons why foundations should consider the services of an external consultancy to help grantees make more informed, data-driven decisions:
- Non-profits will get timely, actionable data that helps them improve their effectiveness. As one example, let’s take a sphere in which digital data and analytics is game-changing for many groups: online fundraising from individual donors. A strong data analytics architecture gives organizations the information they need to strategically optimize use of different communication channels to maximize giving behaviors, and to strengthen long-term relationship-building with their top donors. In addition to supporting fundraising, enhanced digital metrics help non-profits do important things like tailor their websites to meet the actual needs of their constituents (rather than the organizational hierarchy of their organizations), strengthen their digital advocacy efforts, and feed into data dashboards that improve executive decision-making.
- Foundations will get more useful data from their grantees. Consider this hypothetical example: Instead of reporting on page views, a think-tank that spends $50,000 on a white paper can tell its funder how many online users read the full report. This metric (called scroll depth) isn’t yet pervasive, but a digital consultant can unlock it and make it easily trackable. Likewise, digital experts can help non-profits quantify how many folks in policymakers’ offices downloaded a report—and, of these, how many took a follow-up action like requesting information or speaking with an expert. This specificity gives funders much stronger evidence of the impact of their grant making. Enhanced data also reduces the perverse incentives that can come when organizations focus on easy-to-measure metrics (like page views) that reward sheer quantity of outreach, rather than quality and depth of engagement among those who actually matter.
- It’s more efficient for a foundation to connect grantees with strategic data and analytics services—and much less efficient for grantees to secure them for themselves. We’re not just talking about cost-efficiency for grantees (though this is absolutely true), but also about the hassle and energy that individual organizations otherwise expend in securing trusted analytics support. Not to mention the fact that many executives simply don’t know where to turn for this support in the first place!
- Many non-profits don’t yet understand the concrete benefits that come from highly skilled analytics support. While non-profit executives are highly skilled in their specific subject areas, digital analytics may not yet be second nature to many of them. As a result, there’s usually considerable value in a short engagement from an outside expert, who can partner with them to create organization-specific analytics strategies that make their jobs easier (and their organizations more data-driven).
How can foundations offer this kind of support to grantees?
One good place to start is by commissioning an Analytics Health Check for all grantees. Designed to be quick, affordable, and turnkey for participating non-profits, this diagnostic health check assesses the value provided by the current analytics tools they use, and shares high-impact opportunities for improvement based on where they are. Through this process, we find that many organizations don’t need to spend additional time and money on sophisticated data solutions. Rather, a handful of basic tips to maximize the accuracy and utility of what they already have may be just what the doctor ordered!
For the subset of grantees that have significant needs, along with the capacity and motivation to make deeper use of data solutions, a follow-up strategic analytics framework can chart the course for radically improved data capabilities.