The Hidden Cost of Dirty Data (And Why it Matters Now)

Don't let dirty data drain resources! Learn about the hidden costs and how to fix problems now.

The Hidden Cost of Dirty Data (And Why it Matters Now)

You want to know when most nonprofits tackle dirty data?

When they need to migrate it to new software.

Because CharityEngine is often that new software, we have a lot of conversations about how dirty data sets nonprofits back. It can easily cause delays, lost revenue, and poor donor experiences (which lead to attrition).

It’s not only important to migrate clean data. Rather, data health is mission-critical at all times, regardless of your nonprofit’s size, mission, or revenue. Data decays at a rate of 30% per year, meaning there’s no time to waste in getting it cleaned up.

In this article, we will share some surprising consequences of data that’s less than pristine…and give all nonprofits actionable tips to clean and maintain your data.

Why Clean Data Should Always be a Priority

Obviously, having the wrong email address for a donor is a problem, as is paying for direct mail that is returned to your organization.

But the truth is that problems with your data can reach many more tentacles into your nonprofit than you realize. And with recent studies showing that charitable giving is growing, you’ll (hopefully) have more and more data flowing into your CRM.

It’s About More Than Accuracy

Successful fundraising relies on a nonprofit creating an emotional connection with a donor. Part of creating that emotional connection is establishing trust, professional respect, and the personal attention that shows a donor how much they matter.

Relying on incorrect data for donor communications can erode that goodwill. Even addressing communications to a couple when the husband recently died can be enough to make a donor decide to withhold future support.

On the other hand, sending a personal note to the widow because you had accurate data in your CRM might mean she’s a donor for life.

The Donor Experience is on the Line

Mismatched names or duplicate asks can offend your donors. If you don’t have accurate information on past giving, your smart ask threads on donation forms can be way off base.

Creating a personalized donor journey requires accurate, enriched data. Every donor must feel as though you know who they are and that you are grateful for their support. Ensuring each experience is personalized is ideal, and that’s impossible if you can’t trust your data.

Your Bottom Line is at Risk

Sending direct mail that gets returned can cost you, but sending emails to bad inboxes can land you in spam jail. Your campaigns will not get the results you forecast if you don’t really know how many of your donors and prospects are viable.

And consider the signals you track for major opportunities. Dirty data might mask corporate or major gift givers that would, if asked, contribute in a big way.

Everything You Do Depends on Clean Data

Effective fundraisers rely on AI, automation, and personalization. Every modern CRM tool needs reliable data to function!

It’s easy to think a few duplicate records aren’t a big deal. But dirty data affects every aspect of your fundraising, forecasting, and donor relationships. It’s non-negotiable!

Dirty Data Diagnostic Checklist for Nonprofits

What if you have no idea if your data is clean? Here are ten warning signs it’s time to get out the Swiffer!

  1. High email bounce rates tell you that you have a large number of outdated or incorrect email addresses.
  2. Duplicate records mean you need to dedupe your data—your CRM vendor can help.
  3. Inconsistent naming conventions, such as using “Rd.” instead of “Road,” can make sorting and filtering data (segmenting for personalized communications) difficult.
  4. Missing key data fields make it impossible to know if you have a complete data set for segmentation and personalization, even pulling lists.
  5. Conflicting contact information will almost certainly lead to communication errors.
  6. Records with no engagement are ones that should be deleted. You don’t want them marking your emails as spam, and if they haven’t engaged with your nonprofit in years, you can sunset the records.
  7. Using manual workarounds to get data is a red flag. Technology must make your life easier, not require thinking outside the box to pull a report.
  8. KPIs tell a sad story, meaning open rates, click rates, bounces, response rates are all underperforming. You’re either targeting the wrong people or the right people with bad data.
  9. Data silos across teams often means that each team maintains their own lists. Without centralized data, you’ll likely end up with fragmentation and duplication.
  10. Problems pulling reports because data is missing or doesn’t add up means the data that’s being pulled isn’t complete or accurate.

If you read that list and recognized yourself or your team, it’s time to think about some strategies to clean up that data and keep it healthy.

Strategies to Get—and Maintain—Clean Data

Let’s start with broad, best-practices strategies and then get more granular.

Make it a Culture, Not a Project

Everyone must buy into it and remain committed. Embed data quality checks into your workflows and staff training. Empower someone on every team to ensure they’re deduping and checking the accuracy of what comes in. Encourage everyone to flag anomalies on an ongoing basis.

Create a Data Governance Policy

It’s critical to have a “source of truth” – is it Dr. or Doctor? Do you spell out states or use abbreviations? Document your naming conventions, required fields, and rules for deleting or merging records.

Schedule Regular Checkups

Whether it’s monthly or quarterly, review your data to clean, dedupe, and validate. Reach out to your CRM vendor for tools that can help. Then use the CRM to run reports highlighting anything you need to address.

Use Form Validation

Set rules on your forms to prevent fraudulent data from coming into your system. You can require fields, like zip codes, and use email format validation to ensure it’s a real person. Add auto-complete to reduce the chance that someone keys in their address with a typo.

Try Progressive Profiling

Instead of having a lot of fields on your form, ask for more information over time – for example, you need to know some things for a donation. But the next time you reach out, ask where they work to see if the company participates in matching gifts. Ask if they’d like to volunteer. Build your database over multiple touches; you get more responses because the forms are shorter and more accurate.

Use the Dashboard Tools in your CRM

Create a data health dashboard that tracks key data metrics, such as the percentage of records missing emails, the number of duplicates, or the bounce rates. Keep track of email metrics to identify unengaged contacts; try a re-engagement campaign or let them go.

Centralize Data Entry with Permissions

Limit who can create and edit records by defining permissions and using roles in your CRM. While everyone on your team can edit a few fields, one power user (or a small group) controls the cleanliness of the data.

Use Merge Rules with AI or Smart Logic

Implement automatic merging of duplicates using fuzzy logic rather than exact matches. If there’s an “Anne” and an “Ann” at the same address with the same email and phone number, it’s likely a duplicate. But always have a human check the list of merges before overwriting records, or you could have a bigger mess on your hands.

Record Contact Sources

The original source of a contact record is valuable data. You can identify campaigns or channels that need more oversight, as well as double down on the campaigns and channels that give you valid contacts.

Building a Data-Driven Future for Your Nonprofit

Clean, centralized, accurate data isn’t just about avoiding errors. Rather, it informs your reporting and outreach and can help you build lasting donor relationships, boost campaign performance, and unlock insights to power your efforts.

Investing in data hygiene now means your nonprofit will be in the ideal position to personalize donor experiences, adapt quickly, and effortlessly scale your efforts as you grow.

Don’t wait for a tech migration to get cleaned up! Now is the best time to get started.

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