Data Governance: What It Is and Why You Need It - Part 1

By: Emily Walsh, Director

Data governance. If you work in the nonprofit technology sector, you’ve probably heard about data governance more and more over these past several years. Although data governance has been making waves in the corporate world for many years, it’s only during the past several years that nonprofits have hopped on the data governance train, seeing both the potential value it brings to governing big data used for analytics while also providing controls for addressing new data challenges and regulations, like GDPR.

In this first in a series of three posts focused on data governance, I will be clarifying: 1) what data governance is , 2) why it is important that your organization take the leap and get on the data governance train and 3) the typical components of a successful data governance program.

What is Data Governance?

Data governance is a collection of processes, roles, policies, standards, and metrics that ensure the appropriate and effective use of information within your organization. A data governance strategy and program establishes the processes and the framework that your team uses to ensure the quality and security of the data across your organization. Your data governance framework should also define roles and responsibilities: who can take what action, on what data, in what situations, using what methods? Your data governance program should cover the strategic, tactical, and operational roles and responsibilities for your team as they relate to one of your most important organizational assets: your data.

Why Data Governance Matters:

Data governance is increasingly critical as nonprofit organizations face new data privacy regulations and rely more and more on data analytics to help optimize their operations and drive strategic and data-informed business decision-making. There are many, many reasons why data governance is important, but two that everyone should be thinking about include:

1. Data Management & Maintenance: Without effective data governance, data inconsistencies in different systems across your organization might not get resolved. For example, designation or fund names may be formatted or listed differently in your CRM versus your accounting system. This could complicate integrating your financial transactions and could result in data integrity issues that affect your business intelligence (BI), reporting, and analytics efforts.

2. Data Usage and Compliance: Poor data governance can also impact regulatory compliance, which could cause problems if you need to adhere to new data privacy and protection laws, such as the EU's GDPR and the California Consumer Privacy Act (CCPA). A data governance program typically develops common data definitions and standard data formats that are applied in all of your business systems, boosting data consistency for compliance.

Components of a Strong Data Governance Program:

In most organizations, team members at various levels and in various roles are typically involved in the data governance process. Your data governance program should include members of your executive team, your data management professionals and IT staff, and any end users who are familiar with the functional/business uses of data within your organization. These team members work together to create the standards, policies, and processes for governing data.

When structuring your program, you should consider the following roles and components:

• Executive Sponsor: If your organization has a chief data officer (CDO), your executive sponsor could be that person - although in the nonprofit sector this is more likely your AVP or VP of Advancement Services or IT. Your executive sponsor should oversee the data governance program and have responsibility for its success or failure. This individual should be charged with securing executive support and investment in the program, playing a lead role in setting it up, monitoring its progress, and acting as an advocate for data governance internally.

• Data governance manager: In some cases, organizations appoint a data governance manager or lead specifically to run the DG program. In some large organizations, the DG manager might have a dedicated data governance office, but most nonprofits will likely have an interdisciplinary committee of staff (see below) who work on data governance just as a part of their broader job duties. The DG manager should coordinate data governance processes, lead meetings and training sessions, track program metrics, and manage communications.

• Data governance committee: Notably, the data governance manager doesn’t make policy or standards decisions - those decisions should be the responsibility of the data governance committee, which is usually made up of leaders who oversee key data functional areas. The committee approves the data governance policies and processes on things like data access and usage. The committee also resolves disputes that may arise, such as disagreements between different business units over data definitions, formats, limitations, and usage.

• Data stewards: Data stewards are your “boots on the ground” subject matter experts who oversee your data assets and keep things in order (think of your records management team, for example). Data stewards ensure that the policies and rules that have been created and approved by the data governance committee are implemented throughout your organizations and in the daily business practices.

Hopefully this gives you a good starting point for creating or revamping your own data governance program. Please contact us if you need advice or would like to learn more about setting up a data governance program!