Most organizations providing relief after a natural disaster will tell you: if you want to help, the best thing to send is money to a verified service operating in the area. Having been to some of these hard-hit communities a couple of days after a major incident, I can verify the problems that can occur when hundreds of well-meaning, good samaritans send piles of tee-shirts instead of donating the funds for the relief organizations to buy needed items. Following Hurricane Sandy, for example, the bleachers of an ice rink - serving as the donation and assistance center for flooded-out Long Beach - were piled to the roof with bags of tee-shirts. The first couple of days they were distributed quickly, but after a week nearly all the residents' requests were for pants. The tee-shirts sat, untouched, for months until they could be donated elsewhere.
Let's be real, though: the same situation could come up when sending cash to an organization that isn't properly analyzing their participants' needs. Who's to say that if those same generous people each sent $50 instead, the organization wouldn't have bought thousands of tee-shirts anyway. After all, if they'd asked the local residents what they needed in the immediate aftermath - and looking at the distribution during the first few days - it would be logical to assume that's what the people wanted. After the first week, the shirts would still be piled in the bleachers with no funds left to get pants.
That's where real analysis could help both the organization and the community. Data collection (what, who, and how to ask), tacit needs determination (people say they need shirts, they may leave out they also need pants), trend recognition (needing shirts often leads to needing pants), and implementation (when to buy shirts vs. pants) are all products of professional analysis. While it rarely comes cheap, quality analytics could be the way we avoid spending thousands of dollars while still running around without a proper pair of pants.
Nearly every organization and public service program - for-profit, nonprofit, school, government office - collects data in some sense. Demographics, opinion surveys, annual impact questionnaires that take 45 minutes and still ask subjective questions about how you feel... we know it's being collected. But in a CRM company's recent survey of hundreds of nonprofits, less than half believed their data was being used to its full potential and only 5% said their major decisions were being driven by data. Ouch. So why don't more organizations have analysis?
One answer - really, the biggest answer - is cost. Nonprofits and community initiatives are often judged based on the proportion of funding spent on programs versus operations - i.e., any activity that doesn't in some way touch the service's recipient. This ratio is a determining factor in how the organization or program might be viewed in terms of charitable status, effectiveness, and efficiency, and that can have a serious effect on future donations. A poorly rated service could see itself losing status or even collapsing within a few years of a poor ratio rating.
Rightfully, quality support resources are thus very judicious about expenses for administration and fundraising, including detailed data collection and expert analysis. So, aside from gathering any information defined by taxes or grants, it can be hard for a medium-sized nonprofit to justify spending donated dollars - $25,000 to $50,000 or more - on the data process, and that's to say nothing of the little guys scrounging for every dollar. Putting an analyst on staff is generally out of reach for all but the big guns, and even in those cases the analyst is usually limited to that annual survey. No matter how you slice it, analytics is a fair chunk of change that would impact the operations ratio.
But there's some good news on the horizon. Recent research shows convincing evidence that this method of comparing overhead to programs as the primary means of measuring quality can be detrimental to an organization's ability to improve services. In fact, some experts debate if the metric should be used at all when looking at performance. More and more donors are starting to believe that impact needs to be measured, service improvements need to be encouraged, and participants need to be understood.
For example, look at a small nonprofit offering weekly goat yoga for recently deployed service members. (Author's side note: this organization may or may not exist, but if it was a thing while I was in the Army and I didn't know I'm going to be upset.) The overhead might be large: instructor, studio, mats, goats, hay to feed the goats, cleaning up after the goats, and so on. Even if the instructor and some of the other fees are put under programs instead of administrative, the ratio would still be rough. This makes it hard for the nonprofit to convince donors they should be given the funds to sustain, and nearly impossible to get donors to give enough that would allow them to grow.
But what if that nonprofit could show concrete evidence that after 6 sessions, participants showed stress levels below the national average of stress including the non-deployed? Or that 6 weeks after that last session, stress levels were still down compared to non-goat-yogis? And what if the organization found that if they offered a goat-shaped completion sticker to those who finish all 6 weeks, substantially more participants would be likely to stay and get these benefits of stress relief? Now the nonprofit can specifically ask donors for funding to design and get stickers, and to expand their operations, and to get more goats, and there is almost no need to examine the operations ratio because the nonprofit is clearly having an impact and listening and adapting to their clients. That is what makes a great program or service.
In fact, the benefits of quality, analyzed data can earn back the expense 10 fold, from optimizing programs and maximizing impact to increasing donor outreach and upping repeating donor contributions. Yes, the ratio has its place: it helps keep exorbitant salaries or other expenses from overtaking the programs, and encourages judicious spending. But it isn't what put pants on our legs or goats in our yoga studios - for that, we need data analytics.
Notes From The Nerd Desk is a monthly-ish Pathfinder Labs staff blog on data, analysis, research, numbers, computer things, gizmos, gadgets, and more related to military, veterans, and support services.