I had the opportunity a couple weeks ago to travel to Seattle and spend 2 days with leaders from the nonprofit data world. It was a great experience and I got to meet some amazing and very interesting people.

One of the things I walked away with was how data is treated in these organizations. Out of the group of 15 I was the only dedicated, organization wide analyst. Everyone else was split between IT managers and development directors. Now this makes some sense. Data are generally found in databases which are managed by IT and the development world has figured out some ways to utilize data in their work. Still I find it fascinating that out of this group of leading organizations, no one had moved to a dedicated analysis team.

I think having a dedicated team of analysts serving an organization is vastly superior for a few reasons.

1. Data analysis requires a unique set of skills. Data in and of itself is not useful. Data are the raw ingredients needed. Analysis and insight is the meal. You need someone who has been trained to turn the ingredients into the meal. You should hire someone with this special set of skills because the only thing worse than no analysis is bad analysis. Make sure you hire someone who knows what they are doing.
2. All programs can benefit from data. Data can inform organization wide strategy, programming, marketing, fundraising, human resources, any number of silos within the organization. By having a team that can bridge between these silos you will create a more cohesive organization and open yourself up to new insights.
3. Analysis is more than report generation and queries. I feel like when the "data" responsibilities are held by the IT department, the deliverables are reports. While reports are useful, they aren't analysis and it isn't always clear what one can do with them. I think this is why data often sits unused. By hiring analysts who can pull actionable insights out of the raw data you are more likely to utilize the data you have.

I'm obviously biased as someone who is trained as an analyst and leading organizational wide data strategy but I believe these things to my core. I fully believe this is the direction that the nonprofit sector needs to go in order to become data driven.

I find this to be a really interesting problem in the nonprofit sector. You could go to a charity rating website but you've heard that they aren't always what they claim to be, focusing on overhead and financials and not the impact of the organization. You could visit websites but some great organizations have bad marketing and some bad organizations have great marketing.

This problem of sorting nonprofits is one that needs to begin to be solved. Someone, something needs to come about that can help sort nonprofits and provide relevant and insightful information (beyond financials) for philanthropic donors. I have no idea how to fix this problem though.

A woman transferring money with her cell phone using M-PESA.

How do poor communities develop into more affluent ones? How do you make people not poor? The simplicity of the question might lead us to believe that there is a simple solution and yet no one is really sure of how exactly communities develop.

One group of economists has launched a charity, GiveDirectly, which is gaining a lot of traction in the philanthropic world. The idea is simple. If people are poor, what they probably need more than anything else is money. So let's just give it to them.

GiveDirectly gives people in rural Kenya money directly through their cellphone (which most people actually do have). Families get about $1,000 over the course of 10 months. An incredible sum given that most people are living on less than $1 a day.

The money has no conditions. There are no strings attached. People can use the money for booze and drugs or food and education. Early results are positive with many investing in more durable housing, food, and income generating opportunities. There have been some abuses like the village elder who funneled money to friends and family but GiveDirectly is developing new distribution models to avoid those kinds of abuses.

The idea of direct monetary transfers is a really interesting one. In one sense I wholly agree with the concept. If people are under resourced, they are by definition in need of resources. Why not solve that problem directly rather than indirectly through things like education, health, and other services?

For me this is really about the role of the nonprofit sector and helping people. It's one that I'm still wrestling through and discovering. Would you support an organization like GiveDirectly which acts as essentially a cash transfer between you and a poor person?

That said, I am a giver. I love to be generous and invest in the organizations and ideas that I believe are working. Here are a few of my tips.

Don't worry about overhead. The stupid 80-20 rule of nonprofits that declares any nonprofit with more than 20% overhead as inefficient is one of the dumbest ideas floating around. Some organizations by their nature require more overhead. Plus, I believe that sometimes you have to spend some money to get good work done. I don't care how much Tim Cook gets paid as long as my iPhone works.

Think in terms of what you're getting. Your gift should create some level of change in the world. You should be able to buy some solution to a social problem with your money, however small. Decide what problem you want to solve then find an organization that is solving it.

Be wary (but enjoy) the anecdote. Stories are great. They're sweet. They're moving. They're often lies. I'm not saying blatant lies but the "this isn't the norm" kind of lies. Any organization can find someone to get in front of a camera and say that the organization's program changed their life. The real question is, "does it change the lives of most of the people it engages?"

Give generously and don't worry too much. In the end, giving is just good to do. You might not ever get it exactly right or do things for all the logical and not emotional reasons. Don't sweat it too much. Just give generously.

We also wrapped up the first phase of our business intelligence overhaul. Before I scare you away with words like "Business Intelligence" all it really means organizing your data in such a way as to be able have disparate sources talk to one another. For example, we had a membership database where we had things about fees, membership type, etc and a database where we recorded every time someone swiped into one of our facilities. Now those two databases can interact such that I can now see when different membership types swipe into our facilities.

I think the idea of business intelligence is really important for the non-profit sector. It's a way of taking self reflection to the next stage and is the foundation of data driven thinking. Just as we must use data to ensure that our organizations are having an impact we can use data to ensure that we are operating healthy organizations. It's about more than financial health, its about staffing, marketing, and operations.

Data can change your organization but first it needs to get organized.

Why I do what I do has always been easier.

Since I was very young I have had a profound sense that the world is not as it should be. That there is hurt, pain, suffering, injustice and that I was made to do something about it. What I have chosen to do is to help those that are helping people, help them better. I do that by helping them understand what is working and what is not. Help them become better leaders. Help them make better decisions. But all of it goes back to my why.

The world is not as it should be and I should do something about it.

Lately though, I have been thinking about how to correct for that and it comes down to re-framing that contractual relationship. Instead of basing the relationship on services provided, base it on the outcome of those services. Then the funder isn't buying services for someone else, they are buying change; change that can be observed, measured, and accounted for.

Nonprofits still have something to sell and that something is change. Maybe you're selling changed high school graduation rates or changed obesity incidences or a changed community. Whatever it is, identify it and then sell it to people. That way the funder can still hold you accountable for creating that and they are no longer a third party in a transaction for someone else.

Just because you are nonprofit doesn't mean you can't sell. In fact, nonprofits can sell some of the most compelling products in the world. Funders just need to begin to see themselves as more as a donor who pays for services for someone else, they need to think about what they are getting in return.

First off, the skills it takes to run a nonprofit are very different than the skills it takes to become an entrepreneur and start a business. While some people might be able to do both successfully, I have rarely found this to be the case.

Secondly, I don't think there is anything inherently wrong with some members of society supporting the work of others. It actually seems quite efficient. I believe that in an efficient society every member should play to their strengths. And if you can add the most value to society by running a highly efficient and impactful nonprofit, then you should do that. If you are best used to create wealth, then do that.

I do think that the conversation over how nonprofits can operate with financial excellency must be engaged but I'm not sure the solution is asking excellent nonprofits to start mediocre businesses.

Transitions Global is a leading aftercare provider for survivors of sex trafficking in Cambodia.

In many ways the nonprofit sector is built upon empathy. It generally draws people high in their ability to feel and engage in the pain of others and who have a desire to help alleviate that pain. Given this driving force I find that many nonprofit leaders are hesitant to apply rigorous thinking and quantitative analysis to their work. "It can't be quantified," they often say.

So I am always excited when I come across organizations that buck that trend.

I was able to spend this weekend with some of the most empathic people doing some of the most emotional work; caring for the survivors of sex trafficking. The speakers at The Restoration Movement conference pushed their peers to pursue excellence in a field that is sometimes driven by good intentions and little else.

Transitions Global hosted the conference and its founder, James Pond, shared how his organization is using Measurement and Evaluation to ensure that their girls are receiving the highest care. Not many of his peers would have been driven to apply such rigorous methodology to such complex work but Transitions Global continues to push the boundary, working with technology companies to design aftercare specific case management software and reaching out to academics to develop ways to track the recovery of the girls in their program.

No matter what your work, you should strive for excellence and excellence cannot be achieved without measurement. You can never improve what you do not evaluate.

To learn more about Transitions Global and their work, click here.

I have been working on a couple projects around the YMCA to help us improve some of our operations. One of the first things I do when starting these projects is identify the defects. If I am there to help fix a broken process, I need to be able to identify what's broken.

The nonprofit sector exists because of brokenness. Things are not as they should be thus we exist to change them. Yet we aren't always great at identifying the defects we hope to change. Failing schools are defects. Homelessness is a defect. People dying from preventable disease. Defect.

Once we identify what a defect is, we can track it. We can measure it. We can count how often it happens.

Then we act. We intervene. We change the process and decrease defects.

What defects do you exist to change?

This is exactly like the nonprofit world. Donors are like grandma, giving us what we think we want but sometimes they're just wrong.

As leaders in the nonprofit sector, we must always be hyper aware of this nuance. We must go out of our way to ensure that what we are supplying is being demanded, and at the expense we are incurring providing it.

Then there are pull systems. In pull supply systems a product is only made when it is about to be consumed or when it is needed to be consumed. Think a vending machine that is restocked as it sells out of product.

The goal of business is to become pull type systems where a product isn't made until a consumer demands it. The nonprofit sector though, is inherently a push system. Services are provided regardless of their quality or need. Since the product has been paid for by a third party, the organization pushes out its intervention regardless of whether there is demand for it or not.

This is a fundamental distortion in the nonprofit sector. Those who demand services and those who pay for them are two separate entities. In and of itself this is not necessarily a problem, it just creates an environment where the two are not aligned and a service is provided regardless of its demand.

Are you pushing out services or allowing them to pulled?

Today though my outlook has changed.

No I don't want to be any less smart but I want to always try and surround myself with people smarter than me. I'm not changing, my reference point is.

This has been a powerful change for me. I used to feel that to prove myself I had to hit a home run every time I stepped up to the plate. What I realized though was that if that was occurring, I'm not playing in the right league. Failure is a necessary ingredient of success.

Are you playing in the right league?

It might be odd that a nonprofit professional would attend a training most commonly found in manufacturing but the concepts translate well to the sector. The nonprofit sector has products, they might not be widgets but the sector certainly organized around producing results.

Instead of widgets, nonprofits manufacture life, environmental, or social change. They can always learn to do so more efficiently and with greater accuracy. Lean Six Sigma provides great statistical and data analytic tools and methodologies to help.

I'm very much looking forward to applying these concepts to many upcoming exciting projects. If you'd like to learn more or have us come in and examine your organizational processes, don't hesitate to contact us.

There is much discussion about the polarization of politics in America. With Mitt Romney's selection of the conservative Paul Ryan as his running-mate, I would imagine the discussion to increase in the coming weeks. In fact The Economist posted an article just yesterday on the subject, asking have Americans become more polarized or do they just have more polarized political options.

This is a very interesting political choice. Which came first; polarized Americans or polarized politicians? I am of the belief that politicians will do everything that they can to remain within office. In the American political system that means collecting votes. So I also believe that if there were the opportunity for a politician to collect more votes and remain in office by moving to the center then they would do so.

The obvious conclusion then is that Americans have become more polarized.

That is not the only conclusions however. It very well could be that American voters have become more polarized. If the average American is disengaged from politics then for a politician to remain in power they must play to those that do in fact vote, the party idealists.

I think that the reason we are seeing more polarized and ideological politicians is not necessarily because Americans have become so split ideologically (though I think there is evidence we have) but because many Americans don't engage in politics anymore. They have become disenchanted and disengaged, allowing the party extremists to control the political process for all.

When I heard that from a friend of mine this weekend I was shocked and it gave me some empathy for the social sector. It's not too far behind the curve but it still is need of a lot of evidence. Just as we could apply the scientific method to medicine we can apply it to the social sector. We can study what works to fight poverty, homelessness, or summer learning loss. In fact, we NEED to!

Our world's problems require os to focus on what works. To do that we need evidence.

Now, I don't necessary disagree with the conclusion but the evidence that he is citing doesn't support it. Couldn't it be that as violence increases we send more food aid?

What we need our businesses that alter the market. That find ways to profitably provide goods and services that solve problems. That's social enterprise. We need more of that, not just generosity.

This tool is very versatile and can be applied to many areas of the nonprofit and business worlds from predicting the demand for a product in the market to trying to learn what after-school programs best prepared youth for college completion. Regression analysis is just one of the tools we use here at Means Well Does Good.

Take providing primary school education in impoverished nations. A nonprofit might educate 100 people but 50 of those might have been educated by the government anyway, had the nonprofit been there. So while they will taute having helped 100 people, in reality all they helped was 50.

Thinking through these consequences is hugely valuable when thinking about the impact of your organization and the incentives you create to other stakeholders.