The key to a successful nonprofit organization? Better data.

As the end of 2022 nears, I want to share some observations from our work with nonprofits. The past two years have tested these organizations and their leaders at every turn. This situation begs the question. What have been the most significant challenges these organizations have faced in 2022?

In our discussions with nonprofit leaders and board members, many have reported an increased demand for their services. What these organizations are experiencing is consistent with findings from the 2022 Nonprofit Sector Survey. The survey shows that nearly 3/4 of nonprofits have experienced increased demand during the last year. At Bridge Builder Strategies, we have witnessed this with many of the groups we work with.

While organizations have succeeded in meeting the demand, many nonprofit leaders question the sustainability of this going forward. In addition to increased demand, many report staffing, funding, and data competency issues as the most significant challenges to sustainability. These challenges inhibit a nonprofit's ability to execute at a sustainable level while continuing to meet growing demand.

With these challenges, nonprofit leaders and their board members will have to do more to support their organizations. They can help by focusing their organization on leveraging data to maximize impact. This skill is essential because foundations have been granting more support to organizations that can demonstrate their impact. First-party data can help an organization understand opportunities to maximize impact, take advantage of opportunities, and minimize costs.

That said, it is incumbent upon the organization's leaders and staff to consider what data they need and how it can be collected. Data quality can make or break an organization's capacity to leverage this asset and make better decisions. High-quality data empowers a team to take the initiative to improve outcomes.

Nonprofits provide critical services in our communities. Today these organizations, along with strong nonprofit board member leadership, are needed more than ever. Strong leadership, clear strategic plans, and high-quality first-party data will only strengthen nonprofits' decision-making and impact in 2023 and beyond.