Best Practices in Subrecipient Risk Assessments and Monitoring for Federal Grant Recipients
Subrecipient risk assessments and monitoring are critical aspects of federal grants management. These practices ensure that funds are used in...
Data quality is a critical factor for organizations of all sizes, and nonprofits are no exception. Poor data quality can lead to inaccurate business decisions, missed opportunities and even financial losses. Further, poor data quality can impact contributions negatively in several ways. It can obfuscate the nonprofit’s achievements year after year, which can erode donors’ trust or describe fewer accomplishments to its contributors. Poor data quality can lead to marketing campaigns that fail to appeal to first-time donors or are insufficient to recapture previous donors.
Why Data Quality is a Challenge
If data quality is a pervasive issue with real consequences, why have most organizations not solved it? This is the case because assessing and remediating data quality is fraught with challenges, such as:
Another challenge to data quality is defining what it means for data to be fit for purpose. That definition can change not only across different nonprofits, but within a single nonprofit’s departments as well. In general, high-quality data tends to be defined as:
What Can Be Done
Nonprofits can take one of three stances with regard to data quality:
The proactive remediation approach requires resources and should be taken if the perceived cost of data quality issues is greater than its remediation. In this vein, the approach should not treat all data as equal, but instead consider only the critical data of the entity.
What Questions to Ask
Nonprofits’ leadership should find out what they can about their data quality. Some questions leaders should ask include:
The answers to these questions may suggest that leadership devote resources toward not only the assessment and remediation of data quality issues, but in identifying the root cause of those issues and remediating them as well.
Parting Thoughts
Data quality is a critical component of good governance and effective oversight. Nonprofits need accurate and timely information to make informed decisions about their donors and strategy. Poor data quality can distort decision-making, lead to missed opportunities, lower fundraising outcomes and even cause compliance issues. Data quality is also important for risk management, as poor data quality can increase the risk of fraud and cyberattacks and create other business disruptions. Nonprofits should support data quality programs that identify the most critical data records, monitor those records for problems and address problems at the source when they occur.
Written by Jeff Lawton. © 2023 BDO USA, LLP. All rights reserved. www.bdo.com
Subrecipient risk assessments and monitoring are critical aspects of federal grants management. These practices ensure that funds are used in...
Data quality is a critical factor for organizations of all sizes, and nonprofits are no exception. Poor data quality can lead to inaccurate business...
By Dan Durst, MBA, and Gina McDonald, CPA