Is Your Nonprofit Safeguarding Personal Data?

Protecting the personal information of your donors, employees, clients, and volunteers isn’t just good practice—it’s essential. Failing to do so can leave your organization vulnerable to legal action, financial penalties, and damage to your reputation.

Start With a Risk Review

There are two primary dangers when it comes to mishandling personal data. The first involves external threats, such as hackers breaching your systems to commit identity theft or fraud. The second comes from within—staff or contractors with inappropriate access to confidential details, like donor payment info or personnel records. Both require serious attention. And depending on your services, you may need to go even further to protect sensitive data.

Begin by conducting a detailed review of your data management practices. Involve your HR and IT departments to help identify any weaknesses. Key questions to consider include:

• Are you storing old or unnecessary personal information?

• Is access to private data (like financial records or health details) appropriately limited?

• Are both physical and digital records being stored securely and disposed of correctly?

This kind of review can reveal critical gaps that need addressing.

Strengthening Data Security

Invest in reliable cybersecurity tools and make sure they are kept up to date. Regularly educate your team on how to recognize phishing attempts and other tactics cybercriminals use. In addition to these basics, consider the following steps:

Use encryption: Sensitive data should always be encrypted—whether it’s being collected, stored, or transmitted. Protocols like HTTPS and SSL/TLS help ensure data remains secure.

Limit data collection: Don’t gather more information than necessary. If your tools collect extensive user data by default, review whether it’s truly needed. Use anonymous or aggregated data when possible, and let users opt out where applicable.

Establish clear retention policies: Define how long data will be kept and how it will be securely destroyed when no longer needed. Physical documents should be shredded, and digital data should be wiped using trusted software tools. The AICPA recommends keeping data only as long as necessary for its intended purpose.

Be transparent with donors: Make sure your privacy policy is easy to find on your website and fundraising materials. Clearly state that you won’t share or sell donor information without permission. Even if it’s legally permissible, providing an opt-out option builds trust.

Stay compliant: Depending on where you operate and the type of data you collect, legal guidance may be necessary. Nonprofits in the healthcare space, for example, must also comply with HIPAA regulations.

What’s at Stake?

Neglecting data privacy can lead to serious consequences—from fines and lawsuits to a loss of donor trust. Taking proactive steps to secure personal information is not only a legal obligation but a key part of maintaining your nonprofit’s credibility and support. Reach out to us if you’d like help reviewing your data protection strategy.