TechSoup@PND

Through an arrangement with TechSoup, PND is pleased to offer a series of articles about the effective use of technology by nonprofits.

The rise of the data-driven nonprofit

The rise of the data-driven nonprofit

In recent years, nonprofits of all sizes have seen the value in prioritizing a digital transformation and adopting data-driven decision-making. This sea change has impacted every aspect of the organization — from reliably forecasting fundraising, to optimizing marketing and communications, to tracking program success.

Even before the pandemic hit, organizations were seeing the return on their digital investments and improving every aspect of their operations with a digital-first mindset. During a year when the demand for nonprofit programs and services was greater than ever, organizations that already had a digital foundation in place were well equipped not only to succeed, but to thrive in the years to come.

The critical importance of digital to the long-term success of nonprofits is just one of the key findings in third edition of Salesforce.org's newly published Nonprofit Trends Report, which examines the degree to which technology impacts an organization's success metrics. The annual report uses the lens of "digital maturity" to offer insights into how nonprofits are overcoming challenges presented by COVID-19.

Digital maturity, as defined in the report, is an organization's ability to leverage data to inform decision-making, reach new audiences, personalize communications, and forecast fundraising income. The findings are based on input from eight hundred and sixty-seven nonprofit professionals from six countries across North America and Europe, and represent organizations varying in size from one employee to more than two hundred and fifty.

Digitally Mature Nonprofits Exceeded Goals During the Pandemic

The most eye-opening finding from the report? Organizations that ranked high for digital maturity were significantly more likely to have exceeded their goals, sucessfully adapted to the pandemic, had a more positive outlook with respect to the future, and been successful in mission-critical areas such as fundraising, marketing, and program delivery.

Even in the midst of a pandemic, high digital maturity organizations have confidence in their ability to fundraise. Eighty-five percent of those that ranked near the top for digital maturity were more likely to have met or exceeded fundraising goals, versus 66 percent of low digital maturity organizations.

For the Muscular Dystrophy Association (MDA), a nonprofit dedicated to transforming the lives of people living with muscular dystrophy, ALS, and 40+ related neuromuscular diseases, a digital infrastructure meant that it was able to continue critical fundraising efforts using an innovative new approach that saw it mount a virtual version of its famous MDA Telethon — and recoup some of the annual revenue lost at the beginning of the pandemic. The organization had help from a comprehensive digital infrastructure that provided a consolidated, near-real-time view of incoming donations across mutliple channels as well as social media activity throughout the telethon. It was the organization's strong digital foundation that enabled it to pull off a virtual event of this magnitude — one that raised critical funds for its mission of funding research, care, and advocacy.

Short-term fundraising goals are just a piece of the puzzle, and for many organizations the pandemic has created a lot of uncertainty around longer-term goals. The report shows just how big a role technology plays in projecting future fundraising streams during uncertain times.

Data-Driven Nonprofits Are More Confident in the Future

During periods of change, having the technology to navigate uncertainty is critical. So it probably comes as no surprise that nonprofits with the digital chops to forecast their likely long-term fundraising revenues are also pretty confident in their future.

The report details just how important data-driven infrastructure is to long-term success. High digital maturity nonprofits are better able to understand their environment, have more confidence in the future, and have stronger relationships with supporters and constituents.

Considering the premium placed on effective marketing and communications during the pandemic, building stronger relationships with supporters is especially important. Not surprisingly, high digital maturity organizations were considerably more confident compared to nonprofits overall when it came to the effectiveness of their communications, ability to personalize services, and engage volunteers. Indeed, nearly half (48 percent) of high digital maturity nonprofits said they were "likely" to gain support for their cause over the next six months, versus nearly one in five low digital maturity organizations.

What's more, high digital maturity organizations are 1.4 times more likely to be confident about their ability to engage audiences through digital channels (56 percent, versus 39 percent of nonprofits overall), and 1.2 times more likely to say they are better able to engage volunteers (58 percent of high digital maturity nonprofits, versus 47 percent of nonprofits overall). Because effective digital communications on the front end tends to smooth the way to successful program delivery on the back end, 71 percent of leading nonprofits said they had met or exceeded their goals for program delivery (compared to 44 percent of low digital maturity organizations).

Tech-Forward Organizations Adapted to the Pandemic Better

The pandemic has served to spotlight many urgent social issues since March and highlighted areas requiring focused innovation. The report found a similar  dynamic in the nonprofit sector and underscores the importance of digital infrastructure to the ability of organizations to adapt, grow, and maximize their impact.

With a strong digital infrastructure in place, leading nonprofits were better able to understand the changed environment, enabling them to pursue adaptive strategies in response to the pandemic. Thirty-four percent of organizations with high digital maturity strongly agreed that they were prepared with the technologies they needed to navigate changes to their operations, versus 6 percent of low digital maturity nonprofits.

Open Door Legal, a San Francisco-based nonprofit that offers legal aid to those who can't afford it, was minimally impacted by the pandemic because of the work it had done to digitize its operations three years ago. "Operationally, COVID has impacted us very little. We were already pretty much all in the cloud, with our documents digitized. We just sent people home and continued work as usual," said CEO Adrian Tirtanadi. "And because we've collected and digitized so much data through Salesforce, we can effectively show outcomes to our funders in compelling ways even during the pandemic."

The ability to move operations and programs online was another hallmark of organizations that successfully adapted to the crisis; indeed, 35 percent of organizations with high digital maturity said they were able to move their programs online, versus 18 percent of low digital maturity organizations. And when it comes to service delivery, 35 percent of high digital maturity nonprofits — compared to 16 percent of laggards — said they were able to expand or add new services for new audiences.

Across the board, digital maturity was a strong indicator of success for organizations that responded to our survey. Organizations that ranked high on the digital maturity scale were not only more likely to continue innovating, they were also more likely to effectively pivot their work during the pandemic. The high digital maturity marker also indicated how well organizations handled the crisis and how they adapted in the midst of change.

When we asked how nonprofits tackled the pandemic, moving to digital and investing more in technology were the top two changes cited, with 56 percent of respondents saying the pandemic had accelerated their move to digital program delivery and nearly half saying they had increased their spending on technology.

Nonprofits had already been buying in to the need to digitize their missions, ground their decision-making in data, and strengthen the tech foundations of their operations before the pandemic. But in the middle of a devastating public health emergency — and a technology revolution — what was once politely referred to as digital transformation has now become a digital imperative. Findings from our report underscore the fact that "digital imperative" is more than just a marketing catchphrase. Indeed, it is more important than ever that nonprofits invest in the digital tools needed to maximize their impact.

Interested in accelerating your organization's digital maturity? Download the full report, and watch this webinar on how going digital can help your organization advance its mission.

Katharine Bierce is senior lead, research content at Salesforce.org.