Home Blog & Media Demystifying the Common Data Model for Nonprofits: how to power efficient operations with a common framework

Demystifying the Common Data Model for Nonprofits: how to power efficient operations with a common framework

January 14, 2021

Share this Post


Jeroen Figee

Industries Product Director

Exploring the Common Data Model for nonprofits – a common framework for efficient operations that removes the stress from implementing new key systems

“[Leading nonprofits] are more likely to target the modernization of business systems as a key initiative,” according to a 2020 Aberdeen report, Modernizing Finance Operations: How Non-Profits Can Prepare for Future Success.

With the movement to the cloud and modernization at the top of the priority list, the task of implementing and adopting new systems can be daunting. Onboarding new solutions is a challenge at the best of times, but a total overhaul of the basis on which your infrastructure runs brings the potential for major disruption.

The Common Data Model (CDM) aims to take some of the stress out of implementing, maintaining, and integrating key systems for nonprofits. Creating a single framework through which systems can be linked in a cohesive ecosystem to promote greater visibility, efficiency, and a more integrated employee experience.

Standardizing processes and increasing efficiency across the organization is a top priority for most nonprofits. Still, it can be challenging to streamline operations when key systems like Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), logistics, and grant management don’t speak the same language.

In the past, many of these technologies were developed for other industries and had to be shoe-horned to meet nonprofits’ needs. Multiple key systems focused on different goals often result in a technology ecosystem that isn’t fully integrated or that requires time-consuming synching processes and IT support.

Even once systems are configured to the functional needs of each department, and the data can be pulled for analysis, you often can’t follow the whole story because fields are not mapped, and data doesn’t match up across the organization. This translates to lost time as data is moved between departments of the organization via tedious re-entry, checking for errors, or “translating” between various systems that might, for example, consider data on different time periods or using other measurements.

Nonprofits are experts on the old need to do more with less. Enter the Common Data Model – a collaboration between Microsoft Tech for Social Impact and Nethope members and supporting technology vendors to define a common data framework for developing solutions for the nonprofit industry. Under this framework, any compliant technology will be much more seamlessly interoperable. Helping nonprofits implement technology ecosystems that already fit their needs instead of relying on post-purchase customization and complicated integration that takes time and resources, which are better spent in service of the mission.

The model is a standardized definition of common data elements for all nonprofits. It includes all objects and attributes the sector uses to operate and is the first built specifically with and for the nonprofit sector. It includes direct input from many of the world’s leading nonprofits, institutional donors, and private foundations to ensure that it meets all necessary stakeholders’ needs.

The CDM is a living and evolving model a nonprofit’s entire data landscape, and there will be more iterations and project areas to come. The most recent project has been to define a standard data definition for Frontline Humanitarian Logistics.

To understand how it works, think of your technology ecosystem like your smartphone. Each app (or key system) serves a different function, but you can easily add or remove them depending on your needs at the touch of a button. One crucial element that you can share across apps is your contacts. Social media messaging apps give you access to the same contacts stored in your email or phone apps because they are mapped according to a common model, even though each app may call it something different (“people,” “contacts,” or “friends”). The mapping allows easy integration to access and interact with the same data in whatever format is most appropriate without fancy commands and IT support.

Imagine how much administrative and compliance overhead you could eliminate with a connection like this between CRM and fundraising systems and your ERP to seamlessly share data on funder disbursements, restrictions, and payment receipts to your general ledger for financial reporting. Not only does seamless integration mean time savings because information flows automatically, but it also means you can see the impacts felt in one department on others more readily. For example, fluctuating revenue streams from COVID, or hiring or real estate needs, or the opportunity to ask funders to reduce grant restrictions. Up to the minute insights mean you can see opportunities and challenges and act on them more quickly than if you had to wait for data synching or reporting cycles.

We’re working with nonprofits and other solution providers on the CDM team to make sure we’re meeting nonprofits’ real needs. We’ve already modelled our ERP for nonprofits against this model so that organizations can implement our solutions to easily interact with other key systems in their operational ecosystems more quickly and to deliver better insights. Because it already includes the data elements needed, nonprofits can configure processes and structures according to their needs without lengthy (and costly!) customization to start seeing operational efficiency improvements sooner and redirect resources to programs delivering impact in the community.

And because the CDM is designed to evolve with the industry, new sector requirements, such as new IATI reporting standards, can be added as necessary to help technology companies develop purpose-built solutions that help nonprofits comply and report.

Discover how Unit4 and others are helping to develop the Common Data Model for nonprofits – and how the roadmap will help your organization consolidate and streamline your operational frameworks and put renewed energy and resources toward your mission.

Join our webinar on February 2 to learn more from those collaborating, including Oxfam International, GOAL Global, Unit4, and threshold.world, to define the CDM and discuss real-world examples of what it could mean for your nonprofit.

Check out our calendar for upcoming webinars