Accountants are trained to make sure that a not-for-profit entity’s financial information is accurate. But if the intended audience—be it managers, donors, or funders—is not equipped to receive that information, the message may be lost. Using data visualizations can help cut through the clutter. Data visualization can convey essential information in a way that is compelling and memorable, and inspires others to action.

When it comes to presenting complex financial and quantitative information to a variety of users, mastering the art of charts can be an insightful way to capture attention, increase comprehension, and improve reporting.

The Power of Visualizing Data

The human brain is quick to recognize patterns and divergences among simple shapes—that’s why charts exist. They can make numbers very easy for people to understand. Data visualization is more than charts and graphs, it is about presenting relevant information in a clear and engaging manner. Good visualizations transform complex data into accessible information that can educate a diverse audience. Graphics help people receive and understand information quickly, especially quantitative information and comparisons; they can help us to raise an alarm, trumpet a success, or recommend an action. The following are some core concepts and essential elements to consider when creating effective data visualizations:

Understand the audience.

Visualizations should be tailored to the audience. Whether they are funders, board members, internal staff, or the general public, consider audience members’ level of familiarity with quantitative information. Make the visualizations accessible and engaging for them.

Determine the story.

The data tells a story, and graphics play a crucial role in illustrating that story for the reader. Visualizations should be aligned with the overarching message that is to be conveyed. Whether they are highlighting trends, showcasing comparisons, or emphasizing specific data points, graphics should contribute cohesively to the overall story being told.

Use graphics strategically.

Graphics, in this context, refer to data visualizations. They are powerful tools for comparing and presenting quantitative information. There are two main types of graphics: static and dynamic. Static visuals are suitable for specific stories because they minimize reader effort, whereas dynamic visuals encourage interactivity and exploration.

Static visualizations, are great for embedding in a PDF or being printed in hard copy. They can tell a specific story and minimize reader effort. What you see is what you get—but if the point is to tell a timely, specific story, then this is a positive attribute, because it avoids distraction.

Dynamic visualizations, on the other hand, are more open to interpretation. They reward interactivity by incorporating drill-downs, filters, and links. Instead of being sized for a specific type of delivery, they are designed to be somewhat adaptable to various viewing conditions including computers, tablets, and phones.

Strategic use of static and dynamic graphics helps convey the message.

Make the message easy to receive.

Using consistent, standard elements in graphics makes the message easy to understand. Standard elements should include a brief headline, interpretation, the graph itself, credit, and source, as shown in Exhibit 1. Optional elements include additional notes and a legend, used judiciously to enhance clarity without overwhelming the audience.

  • ▪ Headline. It should be brief, punchy, direct, just like a newspaper headline; it prepares the reader’s focus for the rest of the graphic. It is a succinct message that gets straight to the point.
  • ▪ Interpretation. This explains and elaborates the headline; if readers go no further than the interpretation, they should already know what the graph is illustrating, and maybe even imagine what the graph will look like. This is expanded messaging that orients the reader and fills out the story.
  • ▪ Graphic. The graph itself, or what might conventionally be referred to as “the chart,” the actual visualization of quantitative data.
  • ▪ Credit. This identifies who prepared the graphic.
  • ▪ Source. The origin of the data being visualized.

Exhibit 1

Elements of a Chart

Although the first three elements tell the story, the last two are much less prominent visually, but they remain essential to build confidence, trust, and credibility with the reader.

Be deliberate in design.

Graphics should be kept simple and focused to avoid overwhelming the audience. Deliberately choose elements that enhance understanding and engagement; every element of the design helps or hurts. Once an optimal design is found, the structure of a graphic can remain the same and be adapted for different audiences or be used to highlight new information. Repetition of a format across different graphics will familiarize the reader and help them to understand new graphics quickly and focus on the story being told.

Types of Graphics

Different types of data call for different types of visual representations. Choosing the right graphic format enhances clarity and makes your data more accessible. Familiarize yourself with various types of graphics and select the one that best conveys the information to be shared and the story to be told.

Two main types of graphics, static and dynamic, were introduced above. Static visualizations tell a specific story, minimize reader effort, avoid distraction, and are sized for a specific delivery format. Dynamic visualizations are open to interpretation; reward interactivity; offer drill-downs, filters, and links; and are built to be adaptable.

Exhibit 2 shows a form of bar chart used in both static and dynamic presentation. Bar and column charts are everywhere. They are easily the most common type of chart, and for good reason: they provide a straightforward and intuitive way to compare quantitative data across categories. Variations of bar charts include thermometer charts, stacked charts, heatmaps, and pie charts. Bar charts are simple, and simple is powerful; the longer the bar, the greater the magnitude.

Exhibit 2

Static vs. Dynamic Charts

Choosing the Right Chart

To determine which type of chart to use, one should consider the nature of the data and the message to be conveyed. In nonprofit accounting and financial management, there is rarely a need for anything other than a bar chart or line chart. Instead of going into the likes of scatter plots, histograms, box-and-whiskers, and others that you’ll rarely (if ever) need, the rest of this article will look at some of the most common varieties of bar charts with examples drawn from a not-for-profit context.

Bar charts and column charts compare quantitative data across categories; this makes them effective for showcasing magnitude differences. They are simple and thus a powerful tool for communication to a broad audience.

Bar Charts in Disguise: Thermometer, Stacked, Heatmap, and Pie.

Exhibit 3 shows a thermometer chart, one example of what can be thought of as a bar chart in disguise. Thermometer charts are useful for illustrating explicit comparisons—a quick visual impact on performance against set targets or past results.

Exhibit 3

Thermometer Chart

Stacked charts (Exhibit 4) are often used for showing proportions; they are particularly useful for visualizing data comparing parts of a whole. Heatmaps (Exhibit 5) overlay data onto a map to enable geographical comparisons; they are useful when data is tied to specific locations like states or countries.

Exhibit 4

Stacked Chart

Exhibit 5

Heatmap

Another example of a bar chart in disguise is the pie chart (Exhibit 6). These are used to represent data for straightforward comparisons of magnitude. They represent data as a fraction of a whole, communicating the relative proportions of different categories.

Exhibit 6

Pie Chart

Exhibit 7

Line Chart

Exhibit 8

Sankey Diagram

Sometimes, a conventional bar chart or even these bar charts in disguise are not the right choice for the data to be presented. The most common reason is that the picture to be presented is about patterns, trends, and change. In this case, the categories in what could otherwise be a bar chart have a specific order or sequence; the individual magnitudes of the categories are not as important as the pattern of change or flow from each category to the next. Charts to consider for visualizing this type of story include line charts and Sankey diagrams.

Line charts are used to emphasize trends and patterns over time. They are useful for showing change and growth over time and help users focus on the overall trajectory of the data.

Sankey diagrams are effective for displaying the flow of funds, a category of data of particular interest to not-for-profit organizations. They are useful for presenting budgets or financial flows. Sankey diagrams can provide a detailed breakdown of revenue sources and expense uses.

Making the Picture Clear

The art of data visualization and storytelling graphics is a powerful tool for the effective communication of financial information. It is only when accountants brush aside the distractions that the true picture becomes clear; this is the goal of every visualization. The value is in the information and in a wide variety of users being able to quickly understand what is most important. By understanding their audience, embracing standard practices, and choosing the right type of chart, accountants can unlock the potential of financial data and paint a clear and engaging picture.

Asha Vyas is a training content specialist at Your Part-Time Controller, LLC, a national firm with more than 30 years of experience building stronger nonprofits. For more information, visit www.yptc.com.