Collecting demographic data: Nonprofits value transparency but need support

Candid began collecting demographic data from nonprofit organizations in July 2019, encouraging them to share information on their leadership, staff, and board members on their nonprofit profiles. In February 2023, Candid launched Demographics via Candid, an initiative to empower nonprofits to share their demographic data just one time through their profiles, where it can be accessed and reused by funders and other stakeholders. With nearly 54,000 organizations sharing demographic data with Candid as of March 2023, Candid engaged Viewpoint Consulting to conduct research to better understand how it could improve its systems, services, and support for nonprofits. 

Through a combination of survey responses from over 1,500 organizations and interviews with 16 nonprofit leaders, our study sought to answer key questions including: How were nonprofits collecting and sharing demographic data in general and with Candid nonprofit profiles specifically? What supports could help reduce the burden on nonprofits and increase engagement with this data via Candid?  

Sharing data to boost transparency, public image, and fundraising

Our research found that while many nonprofits wanted to be transparent about the demographic makeup of their leadership, staff, and board, they struggled to dedicate the capacity to do so effectively. 

More than two-thirds (72%) of respondents said they provided demographic data to at least one funder or other entity (including Candid) in the past 12 months. The most cited motivation to share this data in their profiles was to secure the “legitimacy” of a Candid Seal of Transparency (70%), which they felt would increase their visibility and enhance their “public image” and, in turn, enhance their ability to raise funds. 

Among organizations that did not share demographic data, 65% were unaware that this section of their profile was incomplete. Clearly, raising awareness of Demographics via Candid and the value of sharing this data is essential to increasing engagement. Among respondents who were aware that their profiles lacked demographic information, the primary reason cited was lack of time (31%), followed by data privacy, security, and legal concerns (28%); impact on public perception or future funding (19%); and lack of internal capabilities (knowledge or systems) to collect data (12%). 

More resources, staff time, and support needed 

Regardless of whether they shared demographic data, 20% of all respondents said that the most significant support needed was more resources, largely related to the staff capacity to collect and share it, whether via Candid or through other mechanisms. 

It is not surprising that nonprofits across the spectrum face limited resources to do their core work, let alone collecting and sharing demographic data. Still, not only are 72% of organizations sharing their data, but 65% found engaging with demographic data in general burdensome, and only 39% obtained the data through a formal process. This means that, while most nonprofits are deploying this data—whether because it is required or because they feel that transparency will increase their visibility to supporters—it is a taxing process that may yield data that is not entirely accurate. Any effort to streamline processes and reduce the burden for organizations should also improve the quality of the data shared. 

The good news is that, beyond the need for more resources to build their data collection capacity, most respondents felt that the process of sharing data via Candid was easy and straightforward. Some respondents cited a need for data collection tools (13%) and guidance on good data collection strategies (10%), which, to some extent, Candid already provides. 

Transparency that works in both directions

Respondents also surfaced several incentives that would increase their willingness and ability to share demographic data via Candid. At the top of the list was evidence of how sharing this data will increase their visibility to potential funders and supporters. Research has shown that earning a Seal of Transparency can increase a nonprofit’s ability to attract and reach potential supporters.  

Importantly, nonprofits value transparency—but transparency that works in both directions. While 57% of respondents cited increased visibility and exposure to potential donors or funding partners as an incentive to share data, nearly as many noted that clear explanations of why this data is important and beneficial to nonprofits (53%) and how it will be used and accessed (50%) would increase their willingness to share it.  

Strengthening support, visibility, and efficiency

These findings are also relevant for funders and donors. If those requesting the data can better align their systems, minimize numerous idiosyncratic requests, communicate the value they place on transparency, and explain how the data they request will be used, more nonprofits will be motivated to share it. Our findings suggest that if more funders request demographic data to be provided in a standard way, through a common platform, the more they will reduce the burden on those providing it while ensuring richer and more accurate data. 

Given that so many nonprofits value the legitimacy and visibility Candid Seals of Transparency offer, expanding awareness across the sector should help increase engagement in sharing data via Candid. Promoting existing tools for sound data collection, advocating for alignment, and facilitating the flow of data to inform giving and research will support Candid’s commitment to realizing a transparent and informed social sector that is efficient, effective, and equitable. 

Join us on May 29 for a discussion about this research featuring Kelly Brown, founder and CEO of Viewpoint Consulting, and Cesar Del Valle, director of partnerships at Candid. Together, they’ll explore the details of the findings, offering invaluable insights for the sector as a whole. Register for the webinar “The nonprofit experience: Insights on demographic data collection.”