How Data Can Change Philanthropy for the Better
Similar to John D. Rockefeller in the last century, business leaders like Bill and Melinda Gates, Warren Buffet are leading a new age in philanthropy to help combat some of the world’s most pressing obstacles.
However, one major difference for philanthropists in 2021 is the amount of data to help them decide where they need to provide financial impact and how to measure the progress of their investments. Many philanthropists are expected to give back in a faster and much bolder way. Data-Driven philanthropy is one way to live up to those expectations.
While many philanthropists may struggle to adopt new data-driven approaches, designing their strategies with the help of data can lead to more effective and efficient solutions. However, questions surround what organizations need to learn and how they will learn it, but also which technologies make sense to integrate into their strategies and which don’t, along with the relevance and effectiveness of the selected activities and interventions.
All for One, One for Big Data
Data pioneers are now helping to assist philanthropists in their quest to make the most impact. John and Laura Arnold are two experts who fund studies where they treat philanthropy like R&D. Without intricate data sets, it’s impossible to understand the real problem or what the best solutions hold.
Today, there are various approaches to using data to better inform philanthropy. Some start from scratch and build basic strategies to use data, while others use advanced analytics. Others may combine this process with new technologies like artificial intelligence or machine learning. However, building data takes time, so philanthropists need to ensure that their capabilities to harness such data are a strong match for their mission and become even more explicit about what they want to achieve through their organizations.
There are several strategies that can help grow data-driven strategies for both philanthropic organizations, including:
Bring clarity to your mission and what you want to achieve
Assess the structured or unstructured data you already have access to and consider how to best use it
Understand the types of data sets that can potentially strengthen the value of pushing your mission forward
Consider using other potential additional data sources and how it might help you achieve your goals in a more efficient and effective way
Strategize how to build capacity to utilize data for the long-term
Access or collect granular-level data through a combination of surveys, text method services, Internet of Things (IoT) devices, focus groups and field experiments
Test the quality of your data with comparable insights and samples
Consider automating your data collection and analyzing your data sets with the appropriate methods and tools
Review your findings and examine and integrate actionable items to improve your intervention
Collect feedback from stakeholders and design a feedback process for your future initiatives. If you collect real-time data, you can also create more agile, real-time processes
Think about the specific context your philanthropic organization focuses on and how to prioritize actionable items
Ensure a systematic data culture and level up whenever possible
Data expertise doesn’t need to be developed within your organization. If it’s not possible to build in-house, connect with data developers and other service providers who want to step into the social sector. Philanthropists may also want to consider collaborating with a wide range of stakeholders who share a collective focus to design more capable interventions. This can help philanthropists gain guidance and fast-track their learning.
The Opportunities and Challenges
Data is crucial for today’s philanthropic organizations to succeed because it allows philanthropists to better grasp their beneficiaries’ needs and carry out more effective campaigns and improve impact with transparency. Data-based decisions allow philanthropists to get the most out of their charitable investments and grants.
Of course, philanthropists should be aware that data can be biased and lead to wrong conclusions. Bias can be introduced at any process of the data process, including collection, analysis and conclusion. Philanthropists should consider what data is transferable to the specific context of their organization and constantly question any bias that is affecting their data.
A common mistake amongst philanthropists is how they build a data strategy. Often, they center it around a funding source or impact washing — when a company or fund makes impact-focused claims without any demonstrative positive social or environmental impact. Philanthropists should be wary of this as it could waste resources and make them deviate from their true goal.
The Data Revolution
Philanthropists should focus on strengthening their current technology and data infrastructures. They can start by using the available data to drive solutions and make the world a better place. In a complex world, data should be top of mind and a central foundation for every philanthropist’s organization to bring about true social change.