Not-for-profits Data Choices

The choices not-for-profits
need to make about
collecting and using data
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The choices not-for-profits need to make about collecting and using data
The potential to access data
has definitely increased.
There is plenty of public
data around that can be
used – and members
and supporters, who
already trust commercial
organisations such as
Amazon, are usually very
ready to provide lots of data
about themselves.
Iain Pritchard, Adapta
Consulting
2 © Source Information Services Ltd 2014
2011
Introduction
Data is a bit like wind: there’s an almost unlimited supply of it. And the question is
through what method, how efficiently and for what reason you should harness it.
Let’s imagine that organisations are sailing boats. The wind helps them to get where
they’re going, but consideration needs to be given to how much is captured and how
efficiently it is converted into forward motion. For some (usually the biggest boats with
the richest owners) the response is to buy enormous sails and capture every bit of wind
they can, no matter whether they know what they’re going to do with it or whether they
even have the capability to do anything with it.
For not-for-profit organisations the challenge is a bit different: their main sail is quite small
and probably has holes in it, and their deck hands are inexperienced so they’re unable to
make the best use of the wind they’re already capturing. What’s more there’s a guy on the
dock trying to convince them to buy a new spinnaker (one of those big sails that billows
out at the front of a boat). It would be a simple decision – fix the main sail and train the
deck hands – but the spinnaker is new and shiny and captures more wind than the main
sail can, even if it didn’t have holes in it and the deck hands were well trained.
What should they do, given limited financial resources? Fix the main sail and train the
deck hands, or buy the new spinnaker? Make sure they’re making good use of the data
they do have, and the systems they have to capture it, or invest in capturing new data?
Buying the spinnaker
The fact is that the amount of data which is now available creates opportunities for
not-for-profits that simply weren’t available even five years ago. Harnessing that data
can mean increasing their ability to better understand their target population in order to
more effectively meet their needs, to engage more effectively with funders, or to assess
the impact of their activities. But is anyone actually making use of all this extra data?
Based on the number of times the example was mentioned, one big boat in the not-for-profit
world might well be Cancer Research UK with its Consumer Insight team. According
to Luba Kassova1, head of the team when speaking in a 2012 interview, “Our purpose is to
deliver high quality, objective and inspirational insights to support decision-making. We
partner with our internal stakeholders to develop new consumer-centric products and
to maximise value from existing products. We identify unmet consumer needs and help
Cancer Research UK to develop ideas in order to meet them. If the Consumer Insight team
did not exist, CRUK would not be able to target the right audiences, with the right products
and messages, through the best channels.” The team’s research has radically changed the
organisation’s way of thinking about some issues: “We showed that the target audience
who purchase from retail stores are very different from the conventional ideas of who we
thought they were” continues Kassova. “We also found that there was a significant profile
overlap between the target audiences who were buying and those who were donating
stock. This led to the organisation changing its approach to the kind of stock it needed to
get for CRUK’s shops.”
The opportunity, then, is clear. And yet the harsh reality is that the reason the CRUK
example crops up again and again is because it’s the exception. Most not-for-profit
organisations aren’t making use of all the additional data that’s now available to them.
The wind blows by unharnessed.
1 Quotes taken from interview with research and business intelligence organisation MRS; https://www.mrs.org.uk/article/item/5

Fixing the main sail and training the
deck hands
No doubt one reason is that the opportunity is being missed is that organisations
are struggling to make good use of what they’ve already got. In December 2013, we
surveyed members of the UK not-for-profit sector and 96% told us that they could make
better use of the data they already have access to.
Many told us that their organisations do not have single accurate sources of data about
organisational effectiveness, marketing effectiveness, service users or projects,
members or supporters, employees and even finances.
Percentage of respondents who say they do not have a single accurate source of:
Data about effectiveness of your organisation
Data about effectiveness of marketing campaigns
Data about service users or projects
Data about members or supporters
Data about employees
Data about finances
19%
32%
31%
65%
58%
55%
We delved deeper and asked survey respondents about signs that processes aren’t as
efficient or effective as they might be. From their responses it is clear that there are
plenty of opportunities out there to make better use of what they’ve got. A full 98%
of organisations have processes in place that require the use of Microsoft Excel and
92% use Excel as a standard reporting tool. This is a sign that organisations either
don’t have the right technology in place or don’t know how to use that technology to
deliver the reports that they need.
© Source Information Services Ltd 2014 3

Thinking about your organisation’s use of data, do you see signs of any of the following:
57%
60%
59%
57%
59%
54%
55%
31%
48%
35%
28%
67%
24%
24%
19%
18%
14%
17%
Processes that require the use of Excel
Excel used as standard default reporting tool
Identical data entered in more than one place
A temporary fix to a process has become permanent
Difficulty in producing reports that require
data from different systems
Conflicting data or reports
Decisions being made without sufficient data
Difficulty in understanding data or reports
from different parts of the organisation
No integration between front and back office
Happens in places Happens often
Mirroring the lack of single accurate records, 87% of organisations are entering
data in more than one place, 80% have difficulty producing reports that require data
from different systems, 78% have conflicting data or reports, 69% have difficulty in
understanding data or reports from different parts of the organisation and 66% see
examples of no integration between front and back office. Given these challenges we
should perhaps be surprised that only 72% of organisations believe that decisions are
being made without sufficient data.
Doing both
It’s worth being clear that the choice between the two options (fix what you’ve got
or invest in something new) is, of course, essentially a false one. Although most
organisations will feel they have to make a choice, the reality is that the boat will
move forward fastest when it fixes its main sail, trains its deck hands and buys the
new spinnaker. Each of these complements each other, and a failure to do any one
of them means, quite plainly, that the boat isn’t being sailed properly. Failing to work
out how to make better use of existing data (to use what you’ve got) may necessarily
be the priority, but if it’s not allied to an investment in harnessing and using new data
then even a charitable view would say that half the opportunity is being missed. A less
charitable view would say that half the job is being done.
Starting with what’s likely to be the highest priority though, what’s stopping people
from fixing what they’ve got?

System complexity
Our research in 2013 with 230 mid-sized organisations in the UK found that the average
organisation had 7 systems for finance, planning and business intelligence, 6 in the front
office, 4 in each of procurement and HR, and 4 for document management. And looking
at the results for not-for-profit organisations, the average not-for-profit is not so far
behind. Adding to the problem is poor integration: according to 84% of not-for-profits, at
least some systems haven’t been well integrated with others.
Whether profit-focused or not, the issues this complexity causes are very similar.
According to Mark Hill at Hitachi Consulting, “The most significant issue is that most
organisations with complex systems find it difficult to view accurate organisation-wide
information; decisions are being made without real insight into the facts.”
Quite often the issues arise because systems are implemented over time and 97% of
respondents agreed this was the case in their organisation. Often there has been no
overarching plan for the organisation (60%) and individual systems have been chosen
without considering the bigger picture (50%).
Thinking about the following functions, approximately how many different systems/solutions does your
organisation use?
1%
10%
4%
1%
2%
2%
7%
5%
6%
15%
71%
45%
39%
51%
61%
37%
49%
52%
27%
More than 20 11-20 6-10 5 or fewer 1
Thinking about your organisation’s use of data, do you see signs of any of the following:
42%
37%
70%
61%
18%
13%
10%
27%
23%
CRM and marketing
Document management
Human resources
Procurement
Finance, planning and business intelligence
1%
2%
1%
2%
2%
Solutions were implemented over time – not all at once
Some systems, on implementation, haven’t been well integrated with others
There was no over-arching plan for the entire organisation
We have chosen individual systems without considering the bigger picture
Agree Strongly agree

But it’s not just the technology
Consultants at a recent roundtable highlighted an issue they see again and again in
mid-sized organisations: organisations buying the best technology but failing to reap the
rewards due not paying enough attention to the people and processes. Dennis Horner
at BDO summed up the sentiments of the group when he said: “It’s rather like putting
a Formula One engine into an old Fiesta driven by someone with no race training – and
then wondering why you’re not winning any races.”
“In some ways the easy part is the technology,” said Duncan Hare at Experienced
Management Consultants. “But before implementing any new technology, organisations
really need to ask if they know how the part of the business it fits into should look, and if
the relevant processes are actually adding value. There’s no point spending good money
automating something that doesn’t really need to happen in the first place. It sounds
obvious but it happens all the time.”
“A real issue is getting people to stop doing what they were previously doing,” added
Stewart Johns at Prederi. “Our natural instinct is to carry on doing what we were doing
before, but organisations need to be quite aggressive in ensuring that unnecessary
manual work has been stopped. In an organisation I was working with, the technology
had been put in place to automate a process but I discovered that the people who used
to do the process were now using that time to check that the system was producing the
correct result!”
Which brings us neatly to the subject of people. “There are two aspects to this,” said
Parry Jenkins at B2E Consulting. “There’s the very practical detailed training that is
required to use any new technology and then the cultural aspect, getting people’s buy in
to a new system. The time required for both is often seriously under-estimated.”

What is stopping organisations from
fixing the problem?
We asked not-for-profits what prevents them from improving the way in which they
collect and analyse data – whether from the perspective of making more of existing
data or new data sources.
The majority of respondents recognise that the benefits are significant enough (only
35% disagreed with this statement) but a lack of time and resources get in the way:
organisations don’t have the spare capacity to make changes (81%) because of
the demands of day-to-day challenges or because they are too busy making other
changes (72%), and they don’t have spare money either (71%). Iain Pritchard at Adapta
highlighted the challenges, “Organisations in this sector are remarkable for being able
to punch above their weight; they often have a huge impact in comparison to the funding
they receive. But sometimes charities do take on more than they are capable of and try
to do too much at the same time. In addition, many not-for-profits have an organisational
culture that supports extensive consultation and whilst this does have important
benefits it also means that change can be glacial. Also, charities especially are often
uncomfortable spending money on the back office; they’re embarrassed about spending
on areas other than delivery – it’s seen as unnecessary expenditure. In a way, people in
fund-raising expect to be ill-equipped.”
Do any of these factors prevent your organisation from improving the way in which data is collected and analysed?
41%
55%
56%
46%
44%
44%
43%
31%
44%
33%
27%
5%
8%
3%
31%
14%
11%
10%
8%
6%
25%
15%
We don’t have the spare capacity to make changes
We are too busy making other changes
We don’t have the money to invest
We don’t have skills or expertise in generating insights
from complex data
We operate in silos and don’t share data
We don’t have the skills or expertise to make changes
The benefits are not understood
We don’t know what our options are
Senior leaders in the organisations are not interested
The benefits are not significant enough
Our IT leader is focused on fixing day-to-day issues
Somewhat of a barrier Significant barrier

In the experience of Anthony Flack at IndigoBlue Consultancy Limited, technology
is simply not a high enough priority for many organisations and is not seen as a key
component of delivering the organisation’s vision. “If I ask the CEO what the IT manager is
working on, he typically won’t know. And if I ask the IT manager if his work is relevant to
the organisation’s strategy, he won’t know. In my experience, senior leaders quite often
just want technology to be no trouble. It’s only when it breaks that they do something.”
Part of the challenge is finding the right person to head IT. Anthony Flack notes: “Often,
the IT Manager is not part of the top team and the reality is that they are sometimes
not strong enough to be on the top team. This does not help an organisation align the
provision of technology to support business objectives. They might be an expert in some
specific aspect of technology but they’re often not looking at the bigger picture. It is
quite typical to find someone strong in networks or servers but lacking with respect to
how to support the critical business systems.”
As the survey respondents recognised, many not-for-profits don’t have the necessary
skills lower down the organisation either: 60% acknowledged that they don’t have skills
or expertise in generating insights from complex data. According to Anthony Flack,
“The not-for-profit sector hasn’t got the expertise to make best use of data – from both
a technical and end-user point of view. If I compare the situation with my experience
working in a bank, people in the bank knew what to do with numbers, albeit they would
look at too many. In the not-for-profit sector, those skills are seldom found except maybe
in finance – but then finance is only taking a certain perspective. At the moment the
approach is to collect and store everything. But, what do you actually need to know?
What will make a difference?”
And as not-for-profits consider novel analysis of new data sources, the capability
challenge becomes even more of an issue. A recent report from Booz Allen2 argues that
a Data Science team should have domain expertise (to provide understanding of the
reality in which the problem exists), computer science (to provide the environment in
which data products are created) and mathematics (to provide the theoretical structure
in which problems are examined). And, if that’s not enough, Data Scientists need
curiosity, creativity, focus and attention to detail. Finding this combination of skills and
aptitudes is difficult enough for private companies but, for not-for-profits with limited
budgets, the task is almost herculean.
“Capability is a big issue,” said Tim Power at Booz & Company. “People often come up
through service delivery and programme management. Not-for-profits are typically very
good at delivering against their core mission but they’re often not as strong in areas
such as analytics. Further, people with strong analytics skills can typically earn a lot
more in the private sector, making recruiting difficult. Hence, not-for-profits can often
benefit from engaging external organisations to provide targeted help and solutions.”
2 The Field Guide to Data Science; Booz Allen

Advice from the experts
Commit to data and analysis from the top down
It’s clear, from talking to all our experts, that the organisations which are making the
most of data have a board which understands the potential benefits and is committed
to the cause. “This month,” says Luba Kassova at CRUK, “the Consumer Insight team is
presenting the latest supporter story to CRUK’s Executive Strategy Board – highlighting
the potential implications for the charity, be it strategic, organisational, or tactical.”
When was the last time your board talked about data: how to collect it, how to analyse it
or what it means?
According to Iain Pritchard at Adapta, “Even where organisations are doing data well,
there might not be anyone listening. Trustees and senior management teams are not as
interested as they should be and strategic decisions are not being led by data. Some
organisations have lots of clever and dedicated people doing the analysis but if you
could survey the senior management team you would find that other things are seen as
more important in making decisions.”
Have a technology strategy that supports the
organisation’s vision
Along with a commitment to data and analysis, boards need a very well thought through
technology strategy which very clearly supports the aims of the organisation. And they
need to be determined to make sure it gets delivered.
Focus on what will be reported
According to the experts, one of the best ways to motivate people around data is to give
examples of the reports and analysis they could have if the right systems were in place.
“Data is often a secondary concern – there is always something more pressing,” said
Tim Power at Booz & Company. “You have to make the data relevant to the end user so
that they can see the value. Mock up an example report to demonstrate what could be
done if you got the investment you’re looking for. And show the return on investment:
what impact might this data and analysis have, for example, on donor uplift?”
Ensure the right processes are in place
According to Ivan Wainewright at IT for Charities, the next step is ensuring that you
have the right processes in place. And simplicity is the watchword. “Organisations often
over-complicate something that is basic,” says Anthony Flack at IndigoBlue Consultancy
Limited. “For example, I was working with an organisation running training for members;
in terms of data and analysis, they needed to register members, check training had
happened, record it and be able to analyse the data. And somehow they’d ended up with
a 24-stage workflow.” And once organisations are clear about what ought to be done, by
whom and how, they can decide what this means in terms of systems.

Consider sharing with other organisations
But not everything needs necessarily to be done in-house. “What’s really interesting,”
commented Anthony Flack, “is that not-for-profit organisations seldom collaborate with
one another; they see one another as competition. Yet the reality is that they could save
a lot of money by collaborating in the back office and sharing back office services.” And
whilst it’s clear from our survey that some organisations are already doing this (35%),
the vast majority say that they are ‘definitely not interested’. Another interesting option
for organisations is to use cloud services: 28% already do (at least in some context) and
another 46% are considering the option.
Are you considering or do you already do any of the following:
Outsourcing some back office processes
(e.g. finance, payroll)
Using cloud services to collate and process data
35%
28%
46%
10%
26%
55%
Already do this Considering this Definitely not interested in this

Are there any quick wins?
Our interviewees were somewhat hesitant to focus on quick wins as they didn’t want to
dilute the message that a clear, top down vision and strategy, supported and enforced
by the leadership, is vital to success. However, when pushed, they did have a few
suggestions.
Bridge the obvious gaps
Sometimes it’s very obvious that two systems ought to be integrated to make life easier
and data more accurate, and the gap can be bridged quickly and inexpensively. “For
example,” said Anthony Flack, “the CRM system and the direct mailing tool may not
be integrated and the direct mail people are using an Excel spreadsheet. It’s manual
interventions such as this that lead to out-of-date and contradictory data.”
Clear log jams
Often there are obvious processes that are causing real headaches but could be easily
fixed. “It might be a log jam in processing direct debits or standing orders,” said Iain
Pritchard at Adapta. “Often there are simple solutions that allow these processes to
be carried out more efficiently. A typical barrier is that ‘we’ve always done them that
way’ but the reality is that technology has moved on. Get some experts in – from other
organisations, suppliers or consultants – and you will suddenly see lots of quick wins.”
Train people to use the technology you
already have
Training was mentioned again and again as a potential quick win. Quite often, a lot of
training happens when a new system is implemented but then there is very little further
down the road. “Simply training people to make best use of what is there already can be
a really significant quick win for an organisation,” commented Ivan Wainewright at IT
for Charities.
Review reporting
Ivan Wainewright also highlighted a potential quick win with respect to reporting.
“Sometimes there’s a fundamental issue, such as a lack of data or systems to analyse that
data, stopping people from getting the reports they need. But sometimes it’s just a case
of users not being able to articulate what it is that they need or not being heard by the
technology people. If attention is focused on reporting, many organisations will discover
that they could be getting more of what they need from the data they already have.”
Should you use consultants?
Not surprisingly, all of our interviewees recommended that whichever way
organisations decide to approach the issue, they should seek outside help. And it would
appear that many are already doing so: 41% of respondents have used consultants
to both review current processes and current technology. However, over a third of
respondents claim they are definitely not interested in using consultants. Why?

Using consultants to review current processes
Using consultants to review current technology
41%
41%
24%
25%
35%
34%
Already do this Considering this Definitely not interested in this
We decided to compare the results of our not-for-profit survey with a 2013 survey where
we asked exactly the same question (with one exception in terms of responses) of
the private sector. Two answers are top for all types of organisations: consultants are
simply too expensive and we have the experience and knowledge that we need in house.
However, for not-for-profits, the focus is much more heavily weighted towards the cost
barrier and they’re less confident that they have the experience and knowledge they need
in house. There’s a very clear challenge here for consultants who need to demonstrate
that they can add enough value to ensure that it is absolutely the right thing to do for not-for-
profits to spend funders’ or members’ money on consulting services.
0%
41%
32%
24%
24%
20%
14%
0%
16%
41%
32%
29%
62%
66%
Consultants are simply too expensive
We have the experience and knowledge
that we need in house
We believe that consultants
don’t add enough value
We have not had a positive experience
of using consultants
Consultants don’t understand our sector
My organisation is culturally averse
to using consultants
We don’t know how to find
suitable consultants
Not-for-profit Private

Top priorities
4%
24%
24%
20%
15%
13%
12%
44%
40%
39%
65%
Organisation’s top three priorities:
Increasing supporter or member numbers
Finding additional funding
Improving quality of service provision
Retaining supporters or members
Increasing the scope of what we offer
Increasing contributions from existing supporters
Reducing costs
Recruiting people with the right skills
Ensuring we meet all regulations (reporting & compliance)
Improving our public image (PR)
Maintaining staffing levels
Respondents told us what they see as their organisation’s top priorities and what
is immediately clear is how important the collection, analysis and use of data is to
achieving those goals. Take the top four: increasing supporter or member numbers,
finding additional funding, improving quality of service provision and retaining
supporters of members. None of these are likely to be achieved without data; all of them
are much easier to achieve with very effective use of data.
But for many organisations, the opportunities to do more with data are no doubt
somewhat overwhelming. Should they be making use of the many new sources of data
and employing data scientists to delve deep? Or should they just focus on getting the
basics right?
The advice from the experts is that, even for organisations that feel unable to do both to
the fullest degree, the choice doesn’t have to be as stark as it might seem. So long as an
overall plan is in place and the organisation is committed to making it work, it’s actually
okay to do a bit of both, to return to our analogy, to patch up the main sail a bit, train the
deck hands in some of the basics, and find a way to hire, rather than buy, the spinnaker.
But they say that that the plan and the commitment are vital: senior leaders in not-for-profit
organisations can’t afford to ignore data and how it is used any more than sailors
can ignore the wind – it’s the key to future success.

Methodology
Survey
We ran an online survey in December 2013 and collected 289 responses representing a
wide range of organisations in the UK not-for-profit sector.
Respondent’s level of responsibility
20%
19%
1% 1%
31%
28%
Top management team or board
Senior manager (but not top team)
Manager
Employee
Volunteer
Trustee
62%
Respondent’s organisation
26%
3% 3%
6%
Charity
Membership organisation
Arts or heritage organisation
Association
Educational organisation

Interviewees
We interviewed four consultants in January 2014 about the specific challenges of the not-for-profit sector:
Iain Pritchard Partner Adapta Consulting
Anthony Flack Senior Consultant IndigoBlue Consultancy Limited
Tim Power Principal Booz & Company
Ivan Wainewright Independent Database/CRM Consultant IT for Charities
and Project Manager
In addition, we have used material from interviews and a roundtable we carried out in 2013 with:
Duncan Hare CEO Experienced Management Consultants
Mark Hill Vice President Hitachi Consulting
Dennis Horner Partner BDO
Parry Jenkins Principal B2E Consulting
Stewart Johns Managing Director Central Public Services Prederi

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Not-for-profits Data Choices

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