Economic volatility and increased uncertainty have triggered a deep decline in donations to nonprofits, according to the Giving USA 2023 report.1 This drop has created a resource scarcity and increased funding competition among organizations. They are under added pressure to demonstrate quantifiable results, proving that their programs and services are making a material difference in the lives of those served.
In the commercial world, when companies don’t provide value and fail to succeed, they go broke. While there has been improvement within the nonprofit sector in terms of performance measurement, many organizations lack this level of structural accountability.2 They continue providing programs and services without producing rigorous data that expresses their value.
To prove tangible results, organizations must establish performance metrics, then collect and analyze data. This vital process allows them to measure their impact, communicate their value, and improve their strategies.
According to a study by Nonprofit Hub, 90% of nonprofits reported that they actively collect data, but nearly half of them are unsure about collection standards and how to use the data to support their work.3
Although there is no industry wide standard for this process, here are six core measures of data quality:4
Accuracy – The degree to which information is factual and up to date; it accurately reflects an event or situation. The more accurate the data, the more likely decisions based on the information will be effective.
Completeness – This fulfills expectations of comprehensiveness or the degree to which all data values are used to draw conclusions. Incomplete data are not the same as inaccurate data, as you can have a complete data set and the information still be incorrect.
Consistency – Whether data values stored for the same record across sources are free from contradiction and are identical in terms of meaning and value.5 Consistency refers to how similar measurements are taken in different circumstances. To achieve consistency, items are measured against multiple data sets and/or assessment of values or formats across records.
Integrity – Make sure that the data align with industry standards and are free of errors.
Timeliness – The degree to which data represent reality from the required point in time. Timeliness and accuracy are usually affected by the way data are collected. Old, outdated data can lead to inaccurate reporting and interpretation.6
Reliability – Also known as data observability, reliability is the degree to which the data can be trusted and used to make decisions. Reliable data can be combined with business intelligence to adjust processes, potentially leading to improved effectiveness and outcomes.
Nonprofit organizations can apply these four practices to help enhance data quality:
Use Ethical Collection Methods
One of the most important aspects of data collection is to respect the rights and privacy of the people from whom data are being collected.
- Obtain informed consent from the participants before collecting their data
- Explain the purpose, scope, and benefits of the data collection
- Avoid collecting sensitive or personal information that is not relevant or necessary
- Protect the confidentiality and anonymity of the participants
- Follow applicable laws and regulations regarding data protection and privacy
For example, a nonprofit organization that provides health services to low-income communities should confirm that it has the consent of their clients before collecting their medical records, and that it stores and uses their data securely and ethically.
Give Donors Control
Not all donors are equal; some are long-time givers, some have given only once, and some have committed years of future giving through endowments. Because of the great variety among givers, it’s important to give donors control over their own data. This means that organizations should:
- Allow donors to opt-in or opt-out of data collection and communication
- Provide donors with clear and easy ways to update, access, or delete their data
- Respect donor preferences and choices regarding how their data are used and shared
- Acknowledge and respond to donor feedback and concerns about data collection
For example, a nonprofit organization that relies on online donations should provide its donors with options to choose how often they want to receive emails from the nonprofit, and how (or if) they want their data to be shared with other organizations or third parties.
Build Profiles Through Interactions
A third best practice for collecting data is to build profiles of your donors through interactions. This means that you should:
- Collect relevant and meaningful data that can help you understand your donors’ interests, motivations, and behaviors
- Use multiple channels and methods to collect data, such as surveys, forms, events, social media, etc.
- Track and record every interaction with your donors, such as donations, communications, feedback, etc.
- Analyze and segment your donors based on their data, such as demographics, giving history, engagement level, etc.
For example, a nonprofit organization that runs an annual fundraising campaign should collect data from its donors through various sources, such as online forms, phone calls, social media posts, etc., and use this data to create donor profiles that can help it tailor its messages and appeals to different segments of its audience.
Keep Data Organized & Integrated
A fourth best practice for collecting data is to keep your data organized and integrated. This means that you should:
- Use a reliable and secure constituent relationship management (CRM) system to store and manage your data
- Make sure that your CRM system integrates with your other fundraising and marketing software, such as email, website, social media, etc.
- Maintain good data hygiene by cleaning, updating, and verifying your data regularly
- Establish clear roles and responsibilities for data collection and management within your organization
For example, a nonprofit organization that has multiple programs and departments can use a CRM system that integrates with its other software platforms, such as email marketing tools or event management software. This way it can avoid data duplication or inconsistency across different systems.
Creating and using reliable data can provide deep insights for your organization. Without it, you are left to operating on intuition or anecdotes, just hoping your decisions lead to positive outcomes.
Reliable data can help give your team confidence you are making intelligent decisions that lead to meaningful, measurable good for those you serve.
For more helpful information for nonprofits, see our related FORsights™ article, “Counting What Counts – Impact Measurement.” If you have any questions or need assistance, please reach out to a professional at FORVIS.
- 1“Giving USA: Total U.S. Charitable Giving Declined in 2022 to $499.33 Billion Following Two Years of Record Generosity,” philanthropy.iupui.edu, June 20, 2023.
- 2“Don’t Feed the Zombies,” ssir.org, March 28, 2023.
- 3“The State of Data in the Nonprofit Sector,” cdn2.hubspot.net.
- 4“Eight Dimensions of Data Quality,” cloverdx.com, July 11, 2022.
- 5“Data Quality Dimensions – 10 Metrics You Should Be Measuring,” dataladder.com, December 17, 2021.
- 6“The Six Dimensions of EHDI Data Quality Assessment,” cdc.gov.