Importance of Data Protection for Nonprofit Organizations

Like its for-profit counterparts, nonprofit organizations must protect the privacy and personal information of its donors, staff, clients, and volunteers to avoid costly lawsuits, regulatory fines, and reputational damage. Strict data protection policies may also foster trust and confidence among stakeholders, to ensure ongoing support and engagement. Moreover, sensitive information safeguards may prevent disruptions to operations and maintain the integrity of the organization's mission.

Initial Assessment

Types of Risks:

• Cybercriminals: Hacking IT networks to steal data for identity theft or fraud.
• Dishonest Employees/Contractors: Inappropriate access to sensitive data like credit card numbers or HR records.

Review Practices:

• Assess current operating practices to understand how personal data is collected, used, disclosed, and retained.
• Identify risks such as retaining unnecessary data, inadequate access restrictions, and improper storage or disposal of data.

Enhanced Efforts

Cybersecurity Measures:

• Educate staff about phishing scams and other fraud techniques.
• Use robust cybersecurity software and update it regularly.

Encryption:

• Employ HTTPS and SSL/TLS encryption protocols when collecting, storing, or transferring sensitive data.

Data Collection:

• Collect only necessary data and review analytics software to ensure data collection is essential.
• Disclose data collection practices and enable visitors to opt out.

Data Disposal:

• Establish a policy for data retention and disposal.
• Shred paper records and use reliable software to erase digital records according to the organization’s document retention policy.

Donor Policy:

• Post a privacy policy on the website and solicitation materials.
• Explicitly state that donor information will not be sold or traded without consent.
• Offer supporters a simple method to opt out.

Compliance and Costs

Legal Compliance:

• Consult legal counsel to ensure compliance with state-specific and international data collection laws.
• Consider other regulatory requirements applicable to the organization. For example, nonprofit healthcare organizations must comply with HIPAA regulations.

Financial Risks:

• Irresponsible handling of private information may lead to regulatory fines, litigation, and loss of donor support.

Nonprofits must prioritize data privacy to protect their stakeholders and avoid severe financial consequences. Implementation of robust cybersecurity measures, proper data collection and disposal practices, and clear donor policies are essential steps in safeguarding to safeguard sensitive information.

If you would like to learn more about data protection or have questions about implementing these changes in your organization, contact our office.