The Critical Role of Data in Solving Society’s Biggest Problems

While it’s easy to make the case for investing in efforts aimed at addressing some of society’s most pressing issues – from poverty and homelessness to global warming – measuring the positive social impact of those investments has proven to be a complex problem for both the grant-making organizations and the non-profits in which those investments are being channeled. Over the past few years, though, meaningful processes to define goals, collect and analyze data, and measure and communicate the impact of such investments have begun to be developed. 

Perhaps not surprisingly, the value of these processes (known collectively as Impact Measurement and Management, or IMM) depends, to a large extent, on an organization’s ability to effectively gather, analyze, and use impact data to drive systemic change, creating more sustainable organizations that are able to have an even greater impact on the societal problems they aim to solve.

Unfortunately, collecting that data and then converting it into actionable insights may be one of the messiest and most burdensome parts of the IMM process. Because countless shareholders require different types of data, grant-makers and non-profit organizations often find themselves pulled in all directions, unable to respond effectively to any of the demands for the kind of data that can be used to support the impact they are making. This situation is even worse for organizations hampered by limited resources to devote to IMM.

Such organizations must also consider not just what data they are collecting and how they are collecting that data, but also what to do with the data once it is collected. Investors often request data for their own reporting purposes, after which it is relegated to a “black box” never to be revisited again. Organizations compiling and sharing their data are left wondering what happened as a result of their efforts and whether any valuable insights were gained from the information they provided.

Finally, grant-makers, foundations, and non-profits alike often find themselves looking at data in a vacuum. Examining stand-alone numbers in an annual report without a baseline or a target, and without careful analysis to identify trends which can indicate progress over time, fails to provide and communicate valuable insights about what has been achieved to date and what needs to be done to improve decision-making and foster growth. 

Recognizing these issues, it is essential for all such organizations to adopt a best practices approach to IMM that focuses on five key activities.

  • Consider industry standards when defining metrics – Standardized metrics offer numerous benefits. Beyond enabling organizations to avoid reinventing the wheel, standardization encourages data aggregation and enables impact investors to compile industry benchmarks, providing an easy way to understand how their investments are making an impact.  
  • Strengthen and simplify data collection – Streamlining data collection by integrations wherever available, rather than making additional requests for information, allows data from disparate sources to be aggregated into one place. It is equally important to employ thoughtful surveys with individualized questions. Using both surveys and integrations allows all existing data to be collected in one place, providing visibility into that data and ease of analysis while minimizing requests for redundant information. It also enables future surveys to focus on bringing new, timely information into the platform where everything else now exists.
  • Incorporate industry benchmarks and public data – Publicly available data and industry benchmarks for factors such as diversity and representation enable organizations to communicate a more complete story about their work, particularly in comparison to their peers. Data points such as income levels, unemployment rates, and educational attainment at the zip code level, for example, should be incorporated to allow for a more complete story about the communities served to be analyzed and communicated.          
  • Incorporate real-life stories – Collecting, analyzing, and reporting qualitative data represents another essential component of IMM. Qualitative data captures the human-centered element of mission-driven work in a way that numbers alone simply can’t, elevating the voice of the constituents and communities that impact investments aim to serve. In short, real-life stories continue to be one of the best ways to understand impact.    
  • Track progress toward goals – Reporting and analyzing data without a baseline and a target, and without showing progress over time, fails to communicate valuable information about advances that have been made to date and the goals that organizations ultimately are aiming to achieve. Instead, organizations need to clearly enunciate the goals they are attempting to reach at the outset and then track their progress toward attaining those goals over time.

While collecting and analyzing meaningful data may often be a difficult and messy task, it is not impossible to do. Perhaps more importantly, the ability to collect and then leverage data plays a critical role in helping grant-making organizations, foundations, and non-profits to measure the actual impact they are making in driving systemic change and addressing the societal issues they aim to solve. The good news is that tools are beginning to be introduced that support simplification, acceleration, and standardization of such impact analysis, and ultimately successful completion of these IMM activities.

About the Author

Charles Sword is the Chief Revenue Officer at UpMetrics, a leading impact measurement and management software company that’s revolutionizing the way mission-driven organizations harness data to drive positive social outcomes. With a wealth of experience in business development and strategic planning, Charles is responsible for all aspects of market development for the company and is passionate about helping the world’s leading foundations, nonprofits and impact investors to drive accelerated social and environmental change. Mr. Sword has held leadership positions for multiple market-leading technology organizations including Blueprint, CAST, and iRise among others, and continues to hone his understanding of market dynamics and innovative strategies to unlock new opportunities and drive growth at UpMetrics.

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