Research Update: Making Data-Driven Decisions

Casey Reas    Signal to Noise (5), 2013.

Casey Reas Signal to Noise (5), 2013.

We are surrounded by data. In 2012, NTEN partnered with Idealware to gauge the use of data by nonprofit organizations. Of the 398 organizations that responded, 99% reported tracking some sort of metrics, but far fewer indicated actually using those metrics to make strategic decisions. Among arts organizations, only 26% reported that their decision-making processes are generally informed by data.

So why should arts organizations use data to make decisions? Rick Lester, former CEO of TRG Arts, explains that data has replaced guess-work and opinion-based decisions with knowledge to remove ambiguity and create an “assumption-free climate.” Data-driven decisions are highly customizable and metrics can be crafted that are specific towards an organization’s goals. For example, perhaps your goal is to build a greater social media presence by increasing the number of Facebook fans by 40%. Analytic tools built into the site enable you to track the number among details about demographics and interactions. Data analysis provides observations that are quantifiable and measurable over a period of time. You can create a spreadsheet and track the number of fans on a weekly or even daily basis. From there, you can make monthly observations of the changes to recognize which strategies to continue or what tactics to change. You can also use your collection of metrics to compare your organization to others in the industry. Facebook publishes data about a page’s number of fans and a simple search enables you to benchmark your organization against others in your region or in your industry. This information can supplement annual reports and monitor the effectiveness of your online campaign.

Undoubtedly, the use of data is extremely valuable. But as the NTEN study discusses, numerous barriers exist in the nonprofit sector that keep organizations from using data effectively. These barriers include not knowing how to track measures, lacking sufficient technology to do that tracking, or not having time to conduct a data analysis. In the arts, it appears that while most organizations collect some form of information, many are still struggling to figure out what exactly to track, and more importantly, what to do with the data once gathered. What metrics are relevant for each department to make smart business decisions, whether they be about marketing or ticketing or development? How does an arts organization decide what metrics to use and why?

Does your organization use data analysis in the decision-making process? What do you feel are the most important metrics for arts organizations to measure? Share your comments below!