Giving Compass' Take:

• In this Stanford Social Innovation Review post, author Kathleen Kelly Janus explores how nonprofit organizations can do a better job with their data.

• From clarity on outcomes to more honesty, this advice covers a broad range of impact measurement. How might orgs turn these principles into practices?

• Here's more on using data to collaborate and be a true community partner.

During a five-year research project I conducted about what makes organizations successful, I learned a shocking statistic: While 75 percent of nonprofits collect data, only 6 percent feel they are using it effectively. To me, this means that while there is a data feeding frenzy happening in the nonprofit sector, the vast majority of nonprofits have failed to develop a data culture — that is, a deep, organization-wide comfort level with using metrics to maximize social impact.

Organizations can improve their data cultures in at least four ways:

  1. Be clear about outputs vs. outcomes: One of the most important lessons I learned in my research is that organizations must do a better job of distinguishing between outputs (how many people are participating in their programs) and outcomes (how their programs are actually changing lives for the better).
  2. Get creative about metrics: If organizations want to uncover true indications of whether their programs are making a difference, they need to get creative about how they measure.
  3. Measure in a mission-driven way: For some organizations, staying true to your mission may mean recognizing the limitations of our data-hungry nonprofit sector.
  4. Be honest with data: If organizations are going to collect data, they also need to be ready to be honest about what that data is telling them.

Ultimately, for organizations to get the most out of their data, they need funders to support data-driven cultures through unrestricted grants that pay for impact measurement; capacity-building support to help develop better systems for tracking data; and the patient, long-term capital that organizations need to ensure that they can be honest with their data without worrying that their funding will get pulled if it doesn’t tell them what they want to see.

Some of the most important practices of successful startups can’t be measured—things like believing in people and building trusting relationships. But figuring out what we can measure and measuring it effectively is essential to the success of organizations that want to achieve impact.

Read the full article about improving data culture by Kathleen Kelly Janus at Stanford Social Innovation Review.