April 10, 2014 From the President

Thinking About The Numbers in Philanthropy

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In our world today, numbers really matter. Businesses count them, the media report them, political leaders quote them. What about in philanthropy? What do numbers mean for donors and charities? And why does data matter?

Answering the last question first, data matters because without it we remain in a fog. We don’t know what is being given, by whom and for what?  Without data, the impact of philanthropy can only be murkily seen. And it is very hard to make good decisions about anything without good data. So what numbers are important? An obvious number that people focus on is the number of dollars given to charity every year in Canada. Statistics Canada recently issued a new number of $8.3 billion given by Canadians in 2012. This is actually a drop of 1.9% from 2011, according to StatsCan. What should we think about this? Are Canadians less generous than the year before?  Are we counting all the contributions that donors make? StatsCan itself notes that the data includes only gifts made to charities that were claimed with receipts on tax returns. In other words, there may be other donations that were not receipted or not claimed.  So a number about giving is not going to tell us much about philanthropy, except in the most aggregate terms.

Of course we know that data on the charitable sector in Canada in general is very poor. Much more data is available about the cement business, to pick only one example, than about charity and philanthropy, based on Statistics Canada data. So what about data that we can track for ourselves? What is the data that philanthropy needs, to make better decisions and, ultimately, to have more impact? Can we take advantage of new technologies for collecting and visualizing data, especially so-called “big” data? This is an important question about which there is much buzz in philanthropic circles. Lucy Bernholz, a consultant and teacher at Stanford University commented on the opportunities, and some of the dangers, of big data in a piece for the Wall Street Journal How Big Data Will Change The Face of Philanthropy.Her view is that better and faster information can help donors channel dollars to the organizations that are most effective. She holds out the vision that “foundations will be able to develop, assess and revise their giving strategies by pulling information from community surveys, organizational reports and an up-to-date “ticker” of other philanthropic giving.” This is exciting stuff and philanthropy will be challenged with floods of such data in this decade. But as Bernholz points out, more data also means that better data management practices are going to be crucial for foundations to protect privacy, security, and donor intent. Bernholz is a featured speaker at PFC’s fall conference in Halifax and will be addressing this question, among others.

A further and critical point about the meaning of numbers in philanthropy is made by Cindy Gibson in her excellent blog post Searching for Certitude in the Nuance of Numbers, Gibson notes that data is not a magic bullet. The key question for philanthropists, she says, is surely “data for what?” She notes that “collecting data—of all kinds—is one thing, but analyzing it is another and requires smart people to put it into context. What does it mean? And is it applicable in “real life?”… focusing on numbers to assess impact won’t do the trick. That’s because impact goes beyond outputs and outcomes to affect something bigger—whether they’re public policies or cultural practices”.

Should we be thinking harder about what it is we want to measure, to know what difference is being made? What does impact look like? How do we visualize it? And then, what data do we need to know we are getting to it? These are all questions that I am sure we will be putting front and center on our board tables over the next few years.

1 Comment

  • Jacques Castonguay
    on April 15, 2014 Reply

    Why philanthropy matters.

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