5 Donor Privacy Considerations Your Nonprofit Needs to Know

Imagine your nonprofit launches a highly successful capital campaign, only to have a cyber breach expose your donors’ personal information. Building donor trust and earning long-term support can take months or even years of dedicated engagement efforts, and an incident like a data breach can ruin all of that progress.

Protecting donor privacy is a critical part of cultivating lasting relationships with the people who impact your mission. In this guide, we will cover five essential considerations for safeguarding donor privacy while building trust and credibility.

1. Understand the Legal Landscape and Evolving Regulations

Donor privacy laws have evolved over the years, striking a balance between accountability and privacy. Beginning with the landmark 1958 Supreme Court case NAACP v. Alabama, which recognized the right to keep donor lists confidential, to the more recent Americans for Prosperity v. Bonta (2021), nonprofits must navigate an increasingly complex legal environment.

Here are some ways nonprofits can stay ahead of ever-changing regulations:

• Monitor nonprofit compliance resources, such as the National Council of Nonprofits
• Regularly review the websites of state charity regulators and data protection organizations
• Subscribe to newsletters or alerts on privacy law updates
• Attend webinars and conferences focused on nonprofit compliance or donor security

Schedule annual reviews of your privacy policy or update it when new regulations emerge. Always involve legal counsel when laws change significantly.

2. Securely Manage Donor Data

Donor privacy revolves around where and how data is stored. From your constituent relationship management (CRM) system to your payment platform, every touchpoint provides an opportunity to protect sensitive information.

Start with maintaining good data hygiene. According to NPOInfo, this process involves correcting errors and redundancies to ensure your database is accurate and consistent. For example, you may need to sort through your donor records to remove outdated information, correct errors, and establish consistent formatting.

Set internal guidelines for how different teams should manage and interact with donor data, such as:

• Implementing secure payment processing to protect donors’ financial information

• Setting role-based access controls for staff to limit who can view and modify donor information

• Regularly auditing systems to ensure ongoing security and adherence to best practices

As part of your role-based access, consider how each team interacts with donor data to set individualized guidelines. Institute a process for requesting exceptions, such as a data access form that team members can fill out to explain their need for certain data points, and your nonprofit’s leadership can either approve or deny their request.

For example, you may restrict prospect research insights to your major gift officers, since they’ll need this information for their donor cultivation efforts. However, your event coordinator may request access to a list of prospective major donors, their contact information, and their preferred method of communication on a one-time basis to invite high-value prospects to an upcoming gala.

3. Commit to Transparent Donor Communication

Privacy is about more than compliance. Openly sharing how your organization uses donor information is critical to securing donors’ trust and ensuring they feel informed and respected. To foster transparency, implement these practices:

• Use clear privacy policy language that avoids jargon and explains how your nonprofit collects, stores, and uses data. Display this policy on your nonprofit’s main communication channels, like your website, to make sure donors can’t miss it.

• Offer opt-in preferences for communications, allowing donors to control the types of communications they receive. For example, nonprofits must acquire permission before they can text donors.

• Make it easy for donors to opt out of cookies when browsing your website, and concisely describe what this means for their privacy.

• Detail your data sharing process in a clear-cut disclaimer so donors understand which vendors or partners can access their data.

Consider running an annual “privacy check-in” campaign, giving donors a chance to update preferences and reinforcing that their data control is a priority. This proactive approach reinforces that your nonprofit values donor data privacy, building long-term support trust.

4. Vendor and Third-Party Risk Management

Every platform and vendor that touches donor data, like fundraising software or an external bookkeeper, must prioritize data security just as your team does. While many vendors have the right safeguards in place, you still have a responsibility to vet these third parties before sharing donors’ personal information with them.

Here’s a checklist to help vet vendors:

• Review security certifications to ensure they meet industry standards.

• Confirm compliance with relevant privacy laws, including state and federal requirements.

• Require signed data protection agreements to formalize expectations and set standards.

Set a recurring cadence for reviewing your vendor risk register, like twice a year, to verify ongoing compliance. Update vendor agreements as necessary to ensure ongoing compliance.

5. Preparing for and Responding to a Data Breach

Instead of waiting for a data breach to happen, plan how you will handle one in advance. A proactive approach can help you minimize damage and rebound quickly if one does occur.

Your plan should include:

• Pre-written notification templates that communicate clearly with affected donors. This template should leave spaces to explain what happened, who is affected, what information was likely exposed, what your nonprofit is doing to resolve the issue, and if there is anything impacted donors can do at this time. If the data breach is relevant to your greater audience, create an announcement post to provide a statement and reassure your supporters.

• Legal counsel engagement, meaning you’ll have someone on standby to help navigate regulatory obligations and potential liabilities.

• Post-breach security audits to identify vulnerabilities and prevent future incidents. Learning from every mistake is critical, even if the data breach is minor or doesn’t affect donors.

A well-practiced breach plan can turn a potential PR disaster into an opportunity to demonstrate integrity and accountability to donors. Best of all, as CharityEngine explains, transparency proves to donors that your organization is responsibly stewarding their contributions and fosters long-term retention.

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Donor privacy is more than just a legal obligation. It builds trust, strengthens donor relationships, and protects your nonprofit’s reputation. Assess your current privacy practices, close any gaps before they become a problem, and prioritize transparency now.

The best thing you can do to protect donor data is partner with vendors committed to ethics, transparency, and security. Your donors—and your mission—deserve nothing less.