Success for non-profit organisations today comes down to fine margins. Being able to spot a signal within the noise of all the data pinging around an organisation is critical to identifying an issue that might affect performance or compliance with donor requirements.
With highly complex information flows, non-profits are potentially managing multiple, unique local disaster situations while trying to deliver supplies and support in the most streamlined, responsible manner. Success – or failure – may come down to one unexpected or hard-to-spot data point.
Analysing and acting on data is key to non-profits’ survival
For example, one charity that analysed the same project that had been implemented with two indigenous communities in the same region. It wanted to understand what contributed to achieving the desired goals. The difference came down to one data point – namely, that the successful project was supported by a local religious leader.
The difficulty is that spotting these signals relies on the IT systems non-profits are using, and they are not fit for purpose. A study of international bodies conducted with IDC revealed that 39% find financial reporting cumbersome while nearly half (45%) were still using manual processes for policy, legal and compliance workflows. Given that financial growth and fundraising was also named as the top strategic priority, it is crucial they improve how their IT systems identify trends in data.
Funding gap
With the US announcing further withdrawals from United Nations and non-UN bodies, after its disbandment of USAID last year, non-profits and non-governmental organisations face a growing funding gap. That makes managing, analysing and acting on data fundamental to their survival. If their financial systems are not performing, they will struggle to demonstrate accountability and transparency to donors.
The ability to report the impact of programmes – which is fundamental to fundraising – requires an integrated, holistic view of data across central and remote business processes to spot signals that could improve performance and ensure accountability.
For example, one medical charity has built up a body of scientific data to predict potential malaria outbreaks. It routinely takes the temperature of individuals attending its clinics, and an average temperature increase of two degrees among a community triggers the charity’s distribution of malaria vaccines to suppress any outbreak before it becomes problematic. Clearly, the ability to observe data in real time (which requires having the right framework and structures to make such discovery possible) significantly improves the efficiency and impact of its programmes.
INPAS will simplify the task of spotting important signals
INPAS initiative
One industry initiative to encourage the standardisation of such frameworks is being led by the International Non-Profit Reporting Foundation (INPRF). It is promoting an International Non-Profit Accounting Standard (INPAS) – the sector’s first international accounting standard – to streamline the preparation of annual audited accounts and grant reports.
INPAS is already in use by 11 organisations, and the goal is to accelerate its adoption worldwide. A universally accepted standard will help to overcome the complexity of dealing with multiple reporting requirements from different countries and donors and also simplify the task of spotting important signals.
Impact data
Along with risk and oversight, the top operational challenges revealed in the IDC study include limited technology adoption and integration, siloed information, data quality issues and inadequate performance observability and accountability. Overcoming these challenges is important because donors want to know, not just how the productivity or performance of a programme has increased, but also how that programme has impacted its target group.
Take a homeless charity. It could use a leading indicator to show the number of meals it serves per day has risen from 500 to 700. A more meaningful measure, though, would be to show the number of homeless people it is helping through a drug rehabilitation course, or into full-time work or education.
It needs the right data embedded into a robust framework
Such information can be found in core business applications if they are turned into a system of record by integrating the right data. Using the example of the homeless charity, an impact indicator may require access to patient records at a drug rehabilitation clinic to see if an individual has successfully completed a recovery programme. Or it could require information from a government body to track an individual’s progress through a training scheme. Integrating such information with data from core applications can help organisations identify trends and improve how they report success.
Observability
The finance team should play a leading role in overseeing this data integration process. First and foremost, the team must create a culture where data is treated as a precious asset. Observability should become the watchword: if you can observe it, you can analyse it, and if you can do that then you can make decisions that may change someone’s life for the better.
However, the ability to observe trends and anomalies needs the right data embedded into a robust framework. It requires the creation of a logical framework that decides what data the organisation must be accountable for and what it must be able to measure. Getting this right is the fundamental difference between having access to data and being able to present actionable information.
