Here is a breakdown of the terms that nonprofits working with data should know and understand (from the perspective of a nonprofit executive):
Database: An organized collection of data, stored and accessed electronically. Any program you use that stores and retrieves data has its own database which can range from very simple to extremely complex structures.
Reporting: Organizing desired data from a database into informational summaries to monitor how different areas of a business are performing.
Analysis: Inspecting, transforming, and modeling data with the goal of discovering useful information, such as competitive insights and business trends, that support strategic decision-making.
Data visualizations: Using data to create visual representations using charts and graphs. Visualizations help show comparisons or causality. They can make complex data more accessible, understandable, and usable.
Data warehouse: A data warehouse extracts data from one or more databases and can combine this data into an aggregate form suitable for organizational-wide data analysis. A database is designed to handle simple transactions, while a data warehouse is structured so that reporting and analytics from different data sources are fast and easy.
Big data: Refers to data sets that are large, unruly, and or come from multiple sources. Big data is typically more complex than traditional data-processing applications can manage and require specialized solutions. Nonprofits do not typically generate data this large.
Business intelligence (BI): The process of using data to gain knowledge about what is really happening at your organization in order to make better, more informed decisions. Business intelligence allows organizations to organize, analyze, report on, and visualize data. For more on business intelligence, refer to our article, "Business Intelligence for Nonprofits—Four Steps".
Now that I've broken down some of the most important terms surrounding data, let’s dig more into the different data solutions available for your organization.
Data Visualization Tools
As we defined the term above, data visualizations are the charts and graphs that make your data easier to understand. These visualizations can draw your attention quickly to any successes or issues with your campaigns or organizational strategies.
These dashboards are undeniably essential—they allow you to make sense of the large amounts of data that your organization collects. And at first glance, these beautiful charts and graphs of your data may appear to be all that you need.
However, data visualizations only scratch the surface of all the data, analysis, and insights that go into true business intelligence.
There is a lot of work behind the scenes to create those dashboards. And it takes a powerful system to do all of this work and produce accurate reports.
Business Intelligence Tools—Going Deeper With Your Data
A true business intelligence (BI) tool digs much deeper into your data than your average reporting or visualization tool. BI software does more than just display numbers and charts—it allows you to collect and analyze all of the data you need to make effective decisions.
Here are the main differences between business intelligence software and a simple reporting and visualization tool.
1. A business intelligence tool will allow you to pull and aggregate data from multiple sources so you have access to the bigger picture and can produce accurate visuals. This ensures that your reports include all relevant information and that you have the most comprehensive look at your organization’s data as possible.
2. BI tools also have capabilities that allow for deeper analysis of your data. Instead of just seeing the exact data presented in the dashboards, you can drill down and see the nitty-gritty details of the data behind the dashboards.
3. Business intelligence allows companies to be proactive (instead of reactive) by having access to real-time data. Organizations can set alerts and notifications of KPIs and metrics so that they can act as soon as possible. With standard reporting tools, it requires hours—if not days—to compile and enter in the data you need. By then, it’s too late to plan ahead and organizations have to then react to the issues. On the other hand, with a BI tool, managers are able to see any downward (or upward) trend in real time and can allocate resources to proactively avert any serious problems.
Business Intelligence is an active journey that requires deliberate focus and planning. Every organization has databases and acquires tons of data, but those organizations that harness the power of their data to glean new insights and take actions based on the data are the ones that rise to the top.
If you’re interested in further reading, we recommend:
Bringing Business Intelligence to Your Organization
If you’re a Raiser’s Edge™, Galaxy®, or Siriusware user, JCA Answers is your business intelligence tool. JCA Answers combines a powerfully optimized data warehouse with easy to use data visualizations to allow your organization to dig deeper and find more questions.
Looking for more nonprofit data insights? Download the Fundraiser's Guide to Data Analysis.
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