There are over 1.5 million nonprofit organizations registered in the US alone, and the challenge of knowing which ones to support and which to avoid is tougher than ever. How do donors know where to put their money where it is most needed? And how can charities themselves spend the dollars they receive in the most effective way possible? Big data may hold the answers.
There is more than enough evidence to suggest that using data to enhance giving offers considerable potential, both from a monetary and charitable perspective. More plentiful, accurate and real-time information can help donors channel dollars to the organizations that are most effective, and it can help nonprofits identify the strategies and fundraising tactics that work best at fulfilling their missions.
But this buzzword has been on the scene for a while now. Why has big data not already revolutionized the industry? Unfortunately, in order to reach this new world in which passion meets results, there are certain challenges which first need to be overcome.
Currently, many sources of big data are derived from platforms built for commercial purposes, meaning that donors looking to Facebook streams for data, for example, will learn about donors who use Facebook but may well miss the perspectives of those who don’t. Funding choices informed by skewed samples can easily result in irrelevant data if a large percentage of your potential donor base is not traditionally social media users. Foundations should therefore try and determine if the people they are trying to help are actually represented in the sample, and look elsewhere for more relevant data if not.
Although data collected by nonprofits is no less vulnerable than that collected by companies, there is a certain level of trust in nonprofits that they need to protect for the long term. Nonprofits must take the utmost care to only do what they promise regarding people’s data, as misuse of it (now, or further down the line) will damage the organization’s trust and credibility.
The benefits of altruism have long been proven to increase personal happiness and life satisfaction. Charitable giving is one way individuals like to use their private resources for public benefit, as and when they feel like it, without being subject to pressure from others.
In the age of big data, our generosity becomes one more type of data that others can use to “sell” to us; it is therefore crucial that your organization is able to assure a sense of anonymity to its donors.
The donation of data for social good is on the rise, but as it does so the question of how to handle “donor intent” becomes paramount. As it stands currently, we are unable to define any standard of donor intent when it comes to digital resources; now is the time for nonprofits to develop data practices that match their long-term philanthropic missions.
What do you think the future holds as philanthropy gets further submerged into the world of big data? How are you managing the challenges you’ve been faced with so far? Talk to us in the comment box below!