8 Ways Your Nonprofit Might Be Violating Data Protection Laws (Without Even Realizing It)

(Editor’s note: Kelsey Boudin is not a licensed attorney, but rather a strategic communications expert. His advice is to be understood from a digital marketing and fundraising perspective.)

Trust as a nonprofit organization is your most valuable asset. Donors trust you with their financial contributions. The beneficiaries of your nonprofit work trust you with their personal information – and sometimes even their lives! Funders trust you to be ethical, responsible and mission-driven.

But what if I told you that trust could be slipping through your fingers — without you even realizing it? Your nonprofit could be violating data protection laws and regulations.

The truth is, many nonprofits are unintentionally violating data and consumer protection laws, leaving themselves vulnerable to legal trouble, cyber threats and reputational damage. It could come in the form of what types of data (and how much) you collect about donors and digital media followers. It could also involve leaving that data vulnerable via weak systems and protocols.

In today’s tech-driven world, that’s a risk your nonprofit mission and brand simply cannot afford.

So, let’s talk about the most common data protection missteps that could be putting your nonprofit in jeopardy — and how to fix them.

Is Your Nonprofit Organization Violating Data Protection Laws & Regulations?

1. You’re Not Getting Proper Consent

Collecting donor information or data from program recipients? You’d better have rock-solid consent procedures in place.

Many nonprofits still rely on vague opt-ins, pre-checked boxes or legalese-heavy privacy policies that nobody actually reads. But data protection laws like GDPR and CCPA demand explicit, informed consent for data collection.

Ask yourself:

• Are we making it crystal clear why we’re collecting data and how we’ll use it?
• Are we giving people the option to opt out?
• Are we keeping records of this consent?

If the answer to any of these is no, it’s time to rethink your approach. (And if you’re one of the many nonprofits beginning to use artificial intelligence for digital content creation and donor relations, your nonprofit would be wise to invest in a strong AI policy.)

2. You’re Collecting More Data Than You Actually Need

Just because you can collect information doesn’t mean you should.

It’s tempting to gather as much data as possible — after all, insights help drive fundraising and outreach. But the more you collect, the bigger the target you become for cybercriminals.

Follow the data minimization rule:

• Only collect what’s necessary to fulfill your nonprofit’s mission.
• Regularly audit your databases to remove outdated or unnecessary information.
• If you don’t need sensitive personal details (like Social Security numbers and bank info), don’t collect them, period.

The less data you have, the less risk you carry. That’s not just sound legal advice. It’s common sense.

3. You Have Weak Access Controls

Who on your team can access information on donors and program participants? If your answer is “everyone,” that’s a problem. Not everyone in your organization needs access to sensitive data. 

Without proper controls, one weak password or careless click could expose confidential information. Here’s how to tighten things up:

• Implement Role-Based Access Control (RBAC) so only authorized personnel can view certain data.
• Require Multi-Factor Authentication (MFA) for anyone accessing donor records.
• Regularly review and update access permissions. If someone leaves your organization, revoke their access immediately.

Think of your data like a vault. Only a select few should have the key.

4. You’re Not Encrypting Sensitive Data

Encryption isn’t just for big banks and tech giants — it’s a must for nonprofits, too. If you’re storing donor payment info, beneficiary records or even internal strategy documents without encryption, you’re leaving the door wide open for hackers.

So let’s shore that up, too: 

• Use HTTPS and SSL/TLS encryption to protect data in transit.
• Encrypt data at rest — especially anything stored on servers or cloud platforms.
• Don’t store sensitive information on physical devices like USBs unless it’s encrypted and password-protected.

Even if a hacker gets their hands on your data, encryption renders it useless to them.

5. Your Privacy Policy Is Outdated (or Nonexistent)

Most nonprofits write a privacy policy once and never look at it again. Big mistake. If your privacy policy still references MySpace or AOL, it’s time for an update.

Your privacy policy should:

• Clearly explain what data you collect, why and exactly how it’s protected.
• Be easy to find — no hiding it in fine print!
• Be reviewed at least once a year to reflect new regulations and technologies.

Privacy laws and best practices evolve constantly. If your policies don’t keep up, you’re not only out of compliance but also inadvertently misleading your supporters.

6. You’re Not Training Your Team on Data Security

Policies don’t mean a thing if your team isn’t following them. Cyber threats are more sophisticated than ever, and human error remains the number one cause of data breaches. That means every staff member, volunteer and contractor needs training on:

• How to recognize phishing attempts.
• Proper data handling and storage.
• Creating strong passwords and securing devices.

Make cybersecurity training a non-negotiable part of onboarding, and provide regular refreshers to keep security top of mind.

7. You Haven’t Vetted Your Third-Party Vendors

Think your data is safe just because you follow all the rules? Not if your vendors aren’t doing the same. Most nonprofits rely on third-party services for digital marketing, cloud storage or payment processing. If one of these vendors gets hacked, your nonprofit is on the hook for the damage.

Before trusting a vendor with your donor and program recipient data:

• Review their privacy policies and data protection measures.
• Ensure they comply with regulations like GDPR and CCPA.
• Have Data Processing Agreements (DPAs) in place that hold them accountable for safeguarding your data.

Remember, your security is only as strong as your weakest link. (And that weakest link might not even be someone on your team.)

8. You’re Not Paying Attention to Evolving Data Protection Regulations

Regulations like GDPR, CCPA and HIPAA exist for a reason. While their basic premises remain the same, technology evolves at a breakneck pace, requiring frequent updates to accommodate new realities. Ignoring them or failing to keep up is almost always costly.

Depending on where your nonprofit operates (or who you serve), you could be legally required to:

• Allow users to request and delete their data upon request.
• Notify authorities about a data breach IMMEDIATELY.
• Implement strict safeguards for medical or financial data.

Fines for noncompliance can reach MILLIONS OF DOLLARS – not to mention the loss of credibility and donor trust. If your nonprofit’s donors and grant funders learn that you play fast-and-loose with sensitive data, even by accident, say goodbye to funding forever. 

If you’re unsure whether your nonprofit is compliant, it’s time to get a data security audit.

Final Thoughts: Data Security Is a Trust Issue, So Don’t Violate Nonprofit Data Protection Laws

Let’s be real, nonprofits don’t always have the same resources as big corporations when it comes to cybersecurity. But that doesn’t mean data protection can take a back seat.

Every time a donor, volunteer or program participant shares their information with you, they’re trusting you to keep it safe. Violating that trust — whether by accident or negligence — can have serious consequences.

The good news? You can fix these mistakes:

• Conduct a data audit and identify weak spots.
• Update your policies and training programs.
•  Invest in secure technology and compliance tools.

Because at the end of the day, protecting data isn’t just about avoiding legal trouble — it’s about protecting your mission and the people who believe in it. So, is your nonprofit doing everything it can to stay compliant? If not, it’s time to make some changes before a data breach makes them for you.

If you have any questions, contact me directly at ke****@gr**************.org.

Kelsey Boudin

President and Founder, Grand River Agency
With over 19 years of diverse experience in print journalism, digital media marketing, and nonprofit administration, Kelsey Boudin founded Grand River Agency (formerly Southern Tier Communications Strategies) in 2020. The agency specializes in offering contract-based strategic communications, content marketing, grant proposals, website design, and public relations services to small businesses and nonprofits. Kelsey’s career spans roles as an editor, content creator, and grant writer, reflecting his expertise in leading successful digital marketing campaigns, securing funding, and executing various projects.

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