Careful with How You’re Using that Data!

The Twin Cities chapter of the Young Nonprofit Professionals Network (YNPN-TC) has a great website that features fairly frequent blog postings by guest authors. (Their social media output is pretty stellar too, by the way.) I’m a big fan of the blog, as it explores many interesting topics and advances some thought-provoking perspectives.

This afternoon they published a post outlining the differences between nonprofits and for-profits. Overall, it’s a really nice primer for the uninitiated! (Check it out here.) But I have to call out a point that caught my attention and reminded me of how important it is for us to be careful with how we use data to make a point.

Nonprofit employees earn just as much in wages as for-profit employees.

According to the most recent Minnesota Nonprofit Economy Report, the average weekly wages for for-profit employees in 2009 were $879. The average weekly wages for nonprofit employees in 2009 were $870. That about sums things up.

This excerpt is of course surprising at first because it says something that many people would dispute. What was more alarming to me, however, is how much detail is glossed over with his statement. When we dig into those details, we learn that the statement is actually kind of misleading.

Thankfully, the source of the statement is cited and linked! So we can go check it out and see what’s really going on. (I grabbed the charts from the source, and they are below. Click on them to see larger versions.) There are a few things that warrant discussion.

For one, the figures quoted in the paragraph are only for 2009. As you look farther back, the gap between for-profit and nonprofit pay widens considerably:
$872/wk vs. $818/wk in 2006;
$878/wk vs. $777/wk in 2003;
$867/wk vs. $716/wk in 2000.
Of course this is a good trend to see! We can certainly say that the pay gap between the for-profit and nonprofit sectors has been rapidly closing, and as of 2009 appeared to have all but disappeared. If this trend continues (or even if nonprofit wages simply keep pace with for-profit wages), the author’s statement is definitely valid. But it seems like a bit of a stretch to say something so broad based on data from one year.

There is another key point to make, and it is illustrated in the next chart of the Minnesota Nonprofit Economy Report: “Average Weekly Wages for Nonprofit Employees by Industry.” The chart breaks out wage figures between health care, education, social assistance, and arts/entertainment/recreation nonprofits, and it is very clear that there are substantial discrepancies between wages in these industries. For example in 2009, average health care wages ($979/wk) were more than double those of both social assistance ($458/wk) and arts/entertainment/recreation ($484/wk) nonprofits. Similarly, average wages in education ($748/wk) were more than 50% higher than these two industries. So we miss a lot of information if we talk about nonprofit wages without highlighting the differences between the industries within the sector.

This differentiation among nonprofit industries is also important to note because it makes clear the fact that, as of 2009, three of them still lag substantially the for-profit sector’s average weekly wage of $879/wk.

Finally, it’s important to consider who makes up the workforce in each of the nonprofit industries profiled in the report.

Doctors, of course, have a relatively high income. (The AMGA reports that, depending on specialty, most doctors earn well into the low/mid six-figure range.) Naturally, this will raise the average weekly wage among all employees in the healthcare group. I would venture a guess that this effect exists in the higher education industry as well. Professors in MN earn, on average, about $85,000 annually, according to the American Association of University Professors. (That $85,000 works out to $1,635/wk.) The remaining employees – fundraising professionals, program managers, volunteer coordinators, and various other administrative types – balance out the other side of the average with incomes below what is reported in the Minnesota Nonprofit Economy Report.

While a person could argue that the author’s statement is somewhat truthful, it’s hard to deny that it’s a bit misleading and is short on a few key details. (Which is too bad, because the article is pretty good otherwise!)

This highlights for me how important it is for us to take care with the data we use. It is becoming more and more readily available, but its utility diminishes greatly if we misuse it. Without careful consideration, we run the risk of giving false impressions (at best) or simply making outright false statements (at worst).

In my role at my current institution, I spend a lot of time immersed in data, and I often use it to illustrate various aspects of our fundraising activities. One of our frontline fundraisers has remained skeptical of data-supported arguments, largely because he has seen so many cases where people have manipulated data or just used it poorly. (More than once I’ve heard him repeat the quotation “There are three kinds of lies: lies, damned lies, and statistics.”) While this is unfortunate and regrettable, who can blame the guy? For me, his attitude drives home the fact that, when we use data to support an argument, we have an obligation to do so honestly and accurately.

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2 responses to “Careful with How You’re Using that Data!

  1. I completely agree Mark! A reader has to pay close attention when facts and figures are given. I find statistics are often correct, but as with your analysis on this article, it is up to the reader to interpret them.

    At our school district’s parent info night for instrumental music, they had a slide show before the meeting showcasing the wonderful things music does for the young brain. It was full of interesting statistics, but the one that gave me pause was something like: “62% of college music majors are accepted to medical school.” and “The next closest acceptance rate is 33% for bio-chemistry students.” This makes the reader leap to the conclusion their child should become a music major if they want to become a doctor. But the reader needs to think — how many music majors are actually applying to med school??? I would think it is a very small number and those that do are probably exceptional students in the first place — thus the high acceptance rate.

    So I say there are lies, damned lies, and misleading statistics.

    • Thanks for this insight, Amy!

      Your anecdote is one of those classic correlation/causation confusion situations. It’s a variation on the theme that students who participate in music (band or orchestra or choir) have higher GPAs than students who do not. Without it being explicitly stated, there’s that suggested conclusion that music programs make students smarter, when it could actually be the case that the students who do better in school happen to also participate in music!

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