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AICPA Survey Points to Big Data, Increased Scrutiny as Big Concerns for CPAs

August 7th, 2014 No comments

Although “big data” has been sort of a buzzword in the business world, it’s becoming more and more of a concern for accountants, including those working in the nonprofit sector. In a past blog post we’ve discussed ways nonprofits can leverage big data, and it appears that the issue of analyzing electronic data is only going to become more important in the near future.

According to The 2014 AICPA Survey on International Trends, published July 30, 85% of CPAs in forensic and valuation services cited big data as their biggest concern going forward. This is a shift from past surveys, which typically placed hiring and retention as the top priority.

Data numbers and line graph

The second most pressing concern for respondents of the survey was increased complexity and scrutiny, coming from different sources such as judges and governing bodies.

Although accountants working for NFPs and NGOs were not included in the survey, these two issues—big data and increased complexity and scrutiny—are big concerns for the nonprofit sector. Peter Brinckerhoff, a former Executive Director of two regional nonprofits and author and internationally renowned lecturer on nonprofit management issues, has stated that transparency and accuracy are two of the most pressing issues for nonprofit financial management.

The Importance of Transparency for Nonprofits

In a whitepaper written for Serenic Software, Brinckerhoff states, “Transparency is no longer optional, either inside or outside the organization.”

Nonprofits, if anything, are under more scrutiny than private sector companies. As Brinkerhoff states, your financials are “on public display at many nonprofit watchdog websites, such as GuideStar and Charity Navigator.”

Reporting requirements are getting more complex, as well. Nonprofits work directly with auditors, and they need to stay on top of all state and federal requirements for reporting, including new requirements for IRS forms 990, 990N, and 990T.

“You might as well have a reporting system that facilitates this easily,” writes Brinkerhoff, “not one that you have to spend hours pulling numbers from.”

The Opportunities of Big Data for Nonprofits

Financial information is a huge part of big data, and making sense of it is a unique challenge that CFOs, board members, and accountants must grapple with.

Brinkerhoff writes, “You still can’t manage what you don’t measure, and like it or not, financial measurements are part of the mission outcome.”  Increasingly, the ability to measure and analyze big data will be crucial to a nonprofit’s financial goals and overall mission.

The biggest opportunity for big data is the potential to gather and analyze financial data in real time, and use it to make important organizational decisions.

Only advanced software solutions give your nonprofit organization the capability to both analyze big data and provide the necessary reporting for complete transparency.

 

Photo by: Tom

 

A Philanthropic Approach to Big Data

June 20th, 2014 No comments

There are over 1.5 million nonprofit organizations registered in the US alone, and the challenge of knowing which ones to support and which to avoid is tougher than ever. How do donors know where to put their money where it is most needed? And how can charities themselves spend the dollars they receive in the most effective way possible? Big data may hold the answers.

There is more than enough evidence to suggest that using data to enhance giving offers considerable potential, both from a monetary and charitable perspective. More plentiful, accurate and real-time information can help donors channel dollars to the organizations that are most effective, and it can help nonprofits identify the strategies and fundraising tactics that work best at fulfilling their missions.

But this buzzword has been on the scene for a while now. Why has big data not already revolutionized the industry? Unfortunately, in order to reach this new world in which passion meets results, there are certain challenges which first need to be overcome.

Data Relevance

Currently, many sources of big data are derived from platforms built for commercial purposes, meaning that donors looking to Facebook streams for data, for example, will learn about donors who use Facebook but may well miss the perspectives of those who don’t. Funding choices informed by skewed samples can easily result in irrelevant data if a large percentage of your potential donor base is not traditionally social media users. Foundations should therefore try and determine if the people they are trying to help are actually represented in the sample, and look elsewhere for more relevant data if not.

Vulnerability

Although data collected by nonprofits is no less vulnerable than that collected by companies, there is a certain level of trust in nonprofits that they need to protect for the long term. Nonprofits must take the utmost care to only do what they promise regarding people’s data, as misuse of it (now, or further down the line) will damage the organization’s trust and credibility.

Anonymous Giving

The benefits of altruism have long been proven to increase personal happiness and life satisfaction. Charitable giving is one way individuals like to use their private resources for public benefit, as and when they feel like it, without being subject to pressure from others.
In the age of big data, our generosity becomes one more type of data that others can use to “sell” to us; it is therefore crucial that your organization is able to assure a sense of anonymity to its donors.

Donor Intent

The donation of data for social good is on the rise, but as it does so the question of how to handle “donor intent” becomes paramount. As it stands currently, we are unable to define any standard of donor intent when it comes to digital resources; now is the time for nonprofits to develop data practices that match their long-term philanthropic missions.

What do you think the future holds as philanthropy gets further submerged into the world of big data? How are you managing the challenges you’ve been faced with so far? Talk to us in the comment box below!

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3 Ways Nonprofits Can Leverage Big Data

May 7th, 2014 No comments

Following Brandon’s recent post about Microsoft’s Cloud storage facility, “Microsoft Azure,”now seems the perfect time to write a post about how nonprofits can harness the value of big data. Still a buzzword across most industries; what does big data mean for your nonprofit? In this post we’ll look at three ways in which nonprofits can leverage big data for positive outcomes.

Big Data image

Big Data

Cultural shift

A big challenge faced by many organizations is getting people on board with social change. Building a case and going in armed with the facts will help you face this challenge head on. Your colleagues may only just be coming around to digital marketing and social media. Find out which of your marketing efforts are giving the best results, what your key findings are and how they impact your mission, and you can build the case for big data adoption. Start at the top – once senior management is behind you, it will be easier to convince others across your organization.
Read more…

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5 Trends for Nonprofits to Prepare for in 2014

January 15th, 2014 No comments

With 2013 behind us, we look at the emerging nonprofit sector trends for the year ahead. What should nonprofits be focusing on in 2014? We’ve listed five of the key trends below, all of which became apparent in 2013, and will be increased areas of importance this year. Read more…

Big Data and Nonprofits

July 29th, 2013 No comments

Big Data continues to be seen as having the potential to drive decisions and improve innovation and productivity, but what is it, and what does it mean to nonprofits? Big Data, quite simply, is large sets of data and collected from an array of sources; the Internet, CCTVs, GPS trackers, supermarket checkouts, mobile phones, Kindles, smart fridges etc. There are also many different types of data, including text, video, sensor data, financial transitions and photos. The prevalence of Big Data can be attributed to the widespread use of the Internet and smart phones. In fact, in the last two years 90% of the world’s data was created. The quantity of Big Data available and the velocity at which it is create makes the task of capturing, curating, storing and analysing this data effectively, difficult. Read more…

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