How financial data shapes charities

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It is no secret that charities are home to more data than ever before. With the advent of digital fundraising in particular, charities have a much clearer idea of who their donors are, how often they donate, the amounts they donate, and when they are likely to lapse in support. This information, when looked at together, can help organisations create better donor journeys, boost their fundraising efforts, and ultimately, fund more services as a result.  

But, in order to extract these insights, the data must first be accessible and coherent. It must be easy to find, brought together outside of departmental siloes, and cleaned to ensure its reliability, removing any errors or missing data that might negatively impact the path charities choose to take when making decisions that affect the future of their organisation.  

Ensuring financial data is of the highest quality to make informed decisions is no mean feat. How can charities use this data to become more efficient, automated, consistent, and productive, particularly without breaking the bank or adopting overly complicated technology?  

This is the question that our recent webinar, in partnership with financial software providers Sage Intacct, sought to answer. Drawing from real-world examples and expert insights, the webinar explored five major pitfalls charities must avoid when pulling together data so they can get a fuller understanding of their challenges and meet evolving demands.  

Below, we explore three of the key learnings from the webinar, including how to safeguard sensitive information when transferring data between systems and how to set achievable goals when managing charity finances. 

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Using charity data effectively: what we’ve learned 

Understand where you are and where you want to be 

One of the biggest challenges when managing charity finances is setting realistic expectations. Charities must set goals, but they must also recognise that there may be no simple way to achieve them. Detailed analysis will help them discover the best way to achieve their goals, but over time, strategies may change and different challenges may arise, as we saw with the cost-of-living crisis.  

It is vital, therefore, that charities document everything, from the financial position they are in now to the financial position they want to be in in the future, including the tools needed at each stage. This can help charities set realistic and achievable goals, continually monitor progress in real-time to identify potential areas of concern, and set clear expectations of where they expect to be at any given time in their journey towards their goal, keeping them on the right path and allowing them to deviate as and when they need to. 

Be mindful of more than just the money 

One of the biggest benefits of financial management technology is that organisations can bring data together from multiple sources to get a better understanding of how their charity operates and what it needs to achieve its goals. Combining financial and non-monetary data gives charities deeper insights helping them to be more strategic. 

For example, does the number of newsletter sign ups correlate to the number of new donors? Are donations coming in from a social media platform and if not, is it worth putting your efforts into fundraising via that channel? Looking at both financial and non-financial metrics helps charities to spot trends year-on-year, or even week-by-week, allowing them to innovate and improve quickly and effectively.  

Prioritise your data security when transferring it between systems 

Charities have a duty to ensure that the data they house is protected and secure against unauthorised access and cyber threats. When integrating data from multiple sources, charities must therefore take into account how each application or tool extracts and sends data between systems, and make sure this process is carried out securely.  

The most common form of data integration, according to Duncan Wyeth, Partner Manager at Vision33, is export/import, typically using data files in a CSV or Excel format. Wyeth advises looking at transfer methodology between systems, ensuring that their files are being transferred using SFTP (Secure File Transfer Protocol) servers, as opposed to general FTP servers. Files are uploaded to these servers, usually in the cloud where they are read from there to another system. 

Even if those servers are secure, Wyeth recommends deleting data from those servers once it has been used. “A good integration system will be able to read a file from an SFTP server and once it’s processed that file, delete the file, or at least, move it to a secure or more secure environment.” 

Charities can find additional tips on keeping data secure between tools, and much more, by watching the full webinar here.