Trust, Transparency and Impact: Why Data Governance Matters for NFPs

Yet many are operating with legacy systems, under-resourced teams, and the persistent belief that “we’re too small to worry about this” or “we’re too small to do anything about this.” 

But in the eyes of regulators, funders, and the public, no organisation is too small to be responsible for data. 

The Australian Institute of Company Directors (AICD) makes it clear in its Data Foundations for Boards paper: data governance is a board-level responsibility, no matter your sector or size. And for NFPs, data governance is as important for trust, transparency, and delivering to your mission as it is for risk and compliance. 

• You trade on trust. 
  Your stakeholders – donors, funders, volunteers, beneficiaries – share personal and sometimes deeply sensitive information with you. A single data breach, even unintentional, can have devastating consequences for the individuals involved and the communities you serve. 
• You operate under scrutiny. 
  The NFP sector is tightly regulated, and funding is often contingent on outcomes. Impact reporting must be grounded in data that’s reliable, consistent, and ethically managed. Ultimately, data governance supports credibility for NFPs. 
• You carry more risk with fewer resources. 
  Unlike corporates, NFPs may not have a CIO or internal compliance team. Yet you’re still accountable under the Privacy Act and, increasingly, through growing expectations of ethical data use. That gap between responsibility and resourcing must be closed, not necessarily with headcount, but with clarity, culture, and external support. 

The AICD outlines five key principles of data governance that every NFP should apply.

1. Treat data as a strategic asset: Don’t just collect data – know what data you’re collecting, why it matters, and how it supports outcomes. 

2. Define clear data governance accountability: Every organisation needs someone responsible for overseeing how data is used and protected. 

3. Manage the data lifecycle and associated risks: What data do you collect? Where does it live? Who has access to it? Do we still need to hold this data? Understand your exposure and put controls in place across the full lifecycle. 

4. Empower a data-driven culture: Leaders must foster a culture that values and uses data to inform decisions. Ask for data, invest in basic literacy, and celebrate smart, responsible use. 

5. Plan for incidents: Have a simple, tested plan for handling data breaches. Communicate clearly with those affected, take responsibility, and use each incident as a chance to rebuild trust and strengthen your systems. 

The AICD encourages boards to shift how they think about data. Not as a tech issue, but a strategic and ethical one. For NFPs, that means:

• Embedding data conversations into governance and strategic planning 
• Ensuring the board actively supports (and doesn’t stall) technology upgrades 
• Valuing digital literacy as part of leadership capability 
• Treating data stewardship as an extension of your duty of care 

• Sensitive by nature: You handle data related to health, lived experience, criminal justice, income, housing instability. 
• Often collected with trust: Clients share information in moments of need or crisis. Mishandling that trust can fracture relationships and cause harm. 
• Dispersed responsibility: With lean teams and cross-functional roles, responsibility may fall to volunteers or generalists, increasing the risk of inconsistency or error. 
• Heavily relied upon: Data is often central to proving impact, measuring program effectiveness and securing funding. Without governance, its reliability and value are compromised. 

Good governance means not only protecting data but ensuring it serves the people it represents fairly, transparently, and safely. 

Transformational change happens when boards and leaders create a culture where data is valued, protected, used well, and not hoarded or neglected. That doesn’t mean everyone becomes a data expert overnight, rather: 

• Asking better questions 
• Backing the people responsible 
• Funding systems with care 
• And taking responsibility when something goes wrong 

As an NFP leader or director, you already understand what it means to safeguard vulnerable people and communities. Data governance is an extension of that mission – it’s how you build credibility, protect the data of others, and amplify your impact.

Read more about our IT Solutions for NFPs. Or talk to us about developing a fit-for-purpose Data Governance Framework and the simple controls that can make all the difference.