Nonprofits already know that big data can open up a swath of fundraising, marketing and management opportunities. But for all the expectation, it's important to remember that even the best data has its limits. Any org looking to leverage and apply data should immediately lose the following assumptions:
1. Your data is complete and accurate.
Your team can probably tell you about the enormous upkeep a simple contact and address databases requires. About 15 percent of households change address year-to-year and a whopping 70 percent of business addresses turn over in that same time frame. Imagine blowing your database up 10 or 100 times. That's a lot of room for error. As statistician Kaiser Fung put it when addressing the fallout from inaccuracies in Google Flu Trends:
"… the availability of data for most measurable units and the sheer volume of data generated is unprecedented, but more data creates more false leads and blind alleys, complicating the search for meaningful, predictable structure…"
This doesn't mean your data is unusable. It just means you need to be hyper-vigilant about data hygiene, cleaning your databases once every year or two, and certainly before any major analysis.
2. Your data tells the whole story.
We've already written about the importance of thinking about your data analysis in the context of your relationships, but it's about more than reaching out to donors before you use their information. Data, especially data from one set or one analysis, can only ever give you part of the story. To return to Google Flu Trends, data scientists found that, while Google's forecasts overestimated the number of flu cases, had those results been combined with data from the CDC, the predictions would have been much more accurate. The point is, your data can tell a number of different stories, but it's merely one narrator. To leverage data effectively, you must approach it in the context of additional studies, conversations and observations.
3. Bigger data is better.
Big data is costly—prohibitively so for some organizations. So why not think slightly smaller? In a 2013 article for Harvard Business Review, Guidestar's Jacob Harold talked about the benefit of "medium data" for nonprofits—information on groups and communities that doesn't require the same digital and human resources to parse:
"Medium data is simply organized storytelling—and if there’s one thing nonprofits do well, it’s tell stories about the need in our communities. "
Before you approach data collection and analysis, assess your information requirements. What does your story need to support it? Can you achieve the same ends without burying yourself and your colleagues in data? As a bonus, being savvy with your data needs can help you hone your message before it too becomes bloated and unwieldy.
The takeaway: Nonprofit leaders can and should embrace the big data revolution, but approach it with eyes wide open. Recognize data for what it is—a valuable tool, but also one of many.
The preceding is a guest post by Josh Mait, Chief Marketing Officer at Relationship Science LLC (RelSci). He is responsible for guiding the overall marketing strategy and its application across all communication channels for the 2013 launch of the ultimate business development tool.