Crossing the Digital Divide

By Charles Sword

We’ve been hearing about the digital divide – the gap between those who have access to the Internet, computers, and skills and those who don’t – since the early 1990s when computer access became integral to getting work done. Today, though, organizations of all kinds are experiencing a new and, in some ways, even more imposing threat: the data divide.

The data divide is loosely defined as the gap between those who can effectively collect, store, mine, and leverage immense volumes of data and those who cannot. The data divide, however, goes deeper than that. It also encompasses the growing disparity between the expanding use of data to create commercial value by data “haves” – primarily for-profit organizations (especially big businesses) – and the comparatively weak use of data to solve social and environmental challenges by the data “have nots,” found primarily in the philanthropic sector.

No one doubts the importance of data in today’s economy. According to the latest estimates by Exploding Topics, 328.77 billion gigabytes of data are being created every day, with video responsible for nearly 54 percent of all global data traffic. Almost 250 million emails are sent every minute. And even more startling: 90 percent of the world’s data was generated in just the past two years.

Clearly, data is the heart and soul of commerce today. In 2021 alone, just three industry sectors – banking, manufacturing, and professional services – were responsible for spending more than $215 billion on big data and analytics. Canadian businesses invest more than $40 billion annually in gathering, processing, and utilizing data, while the value of Canadian data assets is now estimated to exceed $200 billion.

This, however, is where the data divide becomes apparent. According to estimates by IBM, two-thirds of all nonprofits lack the expertise to use data analytics in their work. A recent study by the Nonprofit Hub and EveryAction, meanwhile, shows that only 5 percent of nonprofits use data to support every decision made, while nearly half of the nonprofit executives surveyed either don’t know or weren’t sure how their respective organizations were collecting data.

The reasons data isn’t being harnessed by nonprofits and foundations range from inaccessible data to a lack of technical talent to insufficient technology resources. Regardless of the cause, operating without essential data has the potential to negatively impact everything from delivery of necessary services to advance charitable and humanitarian causes to the ability to demonstrate to funding sources how the work being done is having an impact.

In short, the organizations that are best positioned to make a difference are typically the least able to pay for the technology, training, and capacity building initiatives needed to help them address the wide range of societal issues. All too often, the operations run by these nonprofits must rely on outdated systems with limited, purpose-built technology and resources that are incapable of collecting, analyzing, and utilizing data to measure outcomes and effectively convey the impact they are having.

For-profits, for their part, are increasingly demonstrating a commitment to driving positive societal change. A recent report by Accenture, for example, found that three in five for-profit organizations are using AI and more than half are employing data analytics to reduce emissions.

But while many corporations are stepping up to take on various causes, doing so will almost inevitably be a secondary objective to turning a profit.

While that emphasis on revenue is unlikely to change in the corporate world, it may point to a different way in which nonprofits can avail themselves of the advantages data technology provides. By taking a page from the way in which for-profit businesses use data to build capacity and drive impact, the foundations supporting nonprofits can avail themselves of the tools, talent, and financial resources needed to build data-driven ecosystems designed to accelerate learning, measurement, and evaluation, and ultimately drive impact. The businesses, on the other hand, can realize increased opportunities to link such partnerships with their existing environmental, social, and governance (ESG) investment initiatives.

To get a better idea of how such a collaboration might work, let’s examine the recent example provided by a nonprofit which was experiencing profound fundraising challenges in the wake of the pandemic and ongoing concerns about a recession. Like so many other nonprofits, this organization was dealing with major gaps in its impact data which affected its ability to fundraise effectively. Even the data that had been collected was not always clean. Without reliable data, the nonprofit was left without a viable strategy for managing and measuring the impact of its various programs. This left it at a loss for how to convey its story effectively to prospective funders and foundations, with fundraising goals the inevitable victim.

Through a capacity-building grant from a foundation, however, the nonprofit was able to improve its technology and become more intentional about data collection and analyses. This allowed it to identify and capture key metrics which provided essential demographic information for its fundraising efforts. It also deployed ongoing data collection methodologies and dashboard updates to provide real-time reporting on the impact of its programs on key target audiences. Perhaps most importantly, the organization was able to use its data to more effectively convey the story of the impact its efforts were having, which ultimately helped it to improve its fundraising initiatives and continue providing quality programs.

Bottom line, the world can be a better place if nonprofits and other organizations that are mission-driven can also become more data-driven. To get there, though, both non-profit and for-profit organizations need to have a willingness to change their standard organizational structures and the way in which they think about technology.

Charles Sword is the Chief Revenue Officer at UpMetrics, a leading impact measurement and management software company that’s revolutionizing the way mission-driven organizations harness data to drive positive social outcomes. With a wealth of experience in business development and strategic planning, Charles is responsible for all aspects of market development for the company and is passionate about helping the world’s leading foundations, nonprofits and impact investors to drive accelerated social and environmental change. Mr. Sword has held leadership positions for multiple market-leading technology organizations including Blueprint, CAST, and iRise among others, and continues to hone his understanding of market dynamics and innovative strategies to unlock new opportunities and drive growth at UpMetrics.