Recent trends show that the sector is increasingly leaning on technology. In 2024, India’s non-profit technology spending market was valued at over $10 billion, indicating a significant uptake of digital tools. With nonprofits accounting for nearly 2% of India’s GDP and employing thousands at various levels, the urgency for structured, data-driven decision-making has never been greater.

For many years, nonprofits have depended on static dashboards and manual data reporting. While these approaches are familiar and budget-friendly, they often lack scalability and real-time capabilities, which can leave organisations on the back foot rather than being in a proactive mode. By integrating real-time analytics, nonprofits can dynamically monitor their impact and make informed decisions as challenges arise.

Data analytics empowers nonprofits to detect patterns and trends, enabling them to adjust their strategies for improved engagement. For example, examining the type of employment opportunities received by students undertaking skilling programs can help a nonprofit determine whether intervention is required to improve the employability rate through the introduction of a certain skill that employers demand. Additionally, analysing donor behaviour can make fundraising strategies more focused. For example, if data indicates that donors from a particular region or a particular time of the year have a higher propensity to contribute towards non-profit initiatives, additional resources can be deployed to engage with potential donors from that region or at that time of the year.

Data analytics provides insights into employment trends, reasons for rejections, and skill demands for non-profits collaborating with corporate partners. If data reveals that men are receiving a disproportionate number of job offers compared to women, organisations can respond by creating gender-inclusive training programmes. Similarly, feedback from employer partners can be evaluated to identify gaps in candidate readiness, thereby enhancing placement rates.

Despite its benefits, implementing AI-driven analytics presents notable challenges. Key obstacles include the high implementation costs and the necessity for skilled personnel to oversee data-driven systems.

Upskilling current employees or recruiting data specialists can be effective solutions. However, many organisations find incorporating technology into their fundamental operations challenging due to their historical dependence on traditional methods.

As non-profits become increasingly dependent on data, their ability to use analytics will be crucial for their long-term success. Organisations that prioritise data capabilities can boost internal efficiencies and improve their chances of securing funding and partnerships.

In the end, data has become the new currency in the non-profit sector. The pressing question is not whether organisations should utilise data, but how effectively they can harness it to create impact. Embracing advanced analytics is essential for nonprofits aiming to remain relevant, effective and sustainable.

This article is authored by Amar Gupta, operations director, NIIT Foundation, New Delhi.