Donor Privacy in Online Donations

Is Stewardship of Donor Privacy a Value?

Attracting and maintaining donors is the lifeblood of smaller nonprofit organizations. We believe that nonprofit organizations have an obligation to donors to be stewards for their privacy. We also believe that it is a good business that your patrons know that you are looking out for them.

As we began to explore information for a blog post about donor management systems, one fact began to emerge. If a nonprofit does not maintain its database and secure it, then donor information is provided to a third party, with or without the knowledge of the donor.

Let’s explore why and how this happens. Best practices for online presence calls for a nonprofit to use its website as the centerpiece for nearly all communications. The site will almost always ask for viewers to sign up for a newsletter to be better informed about the nonprofit. This is true whether the viewer is someone seeking services, potential volunteers, and of course donors. The savvy nonprofit wants to know more about its viewers to customize its communications toward the viewer’s interests. This is recognized as a best practice toward building a relationship with your audience. Further, since approximately 70% of donors do not donate in consecutive years, the nonprofit seeks to engage the donor in making them feel closer to the organization and its mission. None of this is harmful by itself, but when the amount of work that is required is recognized, then the smaller nonprofit becomes dependent on volunteers to maintain and operate its database. Notice that we are saying database, as in singular, one, not a separate one for donors, or volunteers, or recipients of services.

And so, a shiny new object appears to solve the problem.

You read ads and speak with salespeople, and they tell you that all you need to do is subscribe to a firm specializing in donor management software. Most often this appears as SaaS or Software as a Service. The promise is that it will cost less than hiring someone, and it will not only get your campaign message in front of the right people, but it will also handle the administration of your data; keeping it up to date and even sending thank you letters acknowledging donations a donor can use for her tax deductions. For a few dollars more, most will also recommend that you merge your data with an email system which will handle all of your communications needs. All you have to do is fill out their forms with the information you have, and keep that information updated. What could be simpler? How intrusive could it be?

Shall we explore? You engage Brand X for your donor management system. Your Donor, Donor A also donates to another charity that uses Brand Y. Then Brand Y purchases Brand X. Now your donor information about two charities is available in one database. Theory, right?

Big Data for Predictive Modeling

In a relatively new book “Data Driven Nonprofit” by Steven McLaughlin, Blackbaud’s chief data analyst explains predictive modeling at the beginning of his book.

“Predictive modeling takes an organization’s data and combines it with external data to help predict what might happen in the future. The external data may consist of income, real estate holdings, private company ownership, stock transactions, being on board of a nonprofit, and donations made to other nonprofit organizations.” Or in other words: “A predictive model is able to look at not only your donor data but also external charitable giving data to recommend an optimal ask amount.” And he shares an astonishing data point: “The analysis revealed that an average upgrade capacity of $52 was possible for annual donors and a potential lift $1,197 existed for major donors.”

Except as noted above he does not go into additional detail as to what external data is used or about the methods of correlation and combination with it happens. What we do know is that Blackbaud has been on a shopping spree – buying up plenty of brands of donor management systems and integrating them into their big pile of data. Its division Target Analytics works for large nonprofits and provides data analytics and predictive analysis services.

To be able to come up with these data points, some very detailed information needs to be available not only from one organization but thousands of nonprofits. And to say that a particular donor profile could be $52 higher means individual personal information needed to be matched across agencies and databases.

Data transparency is hardly a topic the nonprofit community talks about except data about beneficiaries. Little information is known what big donor management SaaS providers are doing with your organization’s data and how they correlate them with 3rd party services.

Data Transparency and Donor Privacy

Does it do any harm? At the moment, we only have a few data points that are raising questions so few that there are not any real answers yet.

Given that many of you are now coming up for air after year-end-fundraising, it might be a good time to start reflecting on the edge of technology driven connection and human connection among your biggest asset the people that support the cause and are looking at you to change the world for the better.

If you keep your donor database close to your website, you can keep the data collected close to the vest, and you can report to your donors, what data is kept how and who has access to it. If your website includes or embeds a donation form, or other snippets from a 3rd party SaaS provider to collect information, the circle of who has access to which data can’t be controlled anymore.

We believe that a nonprofit organization has an obligation to its donors, volunteers, and recipients of services about how and where their personal information is kept. If you are providing information to an email service, they should know who you are providing it to and exactly what data you are providing. If you are providing historical financial information about donors, there is an even deeper responsibility. Donor Privacy is not a technology issue, per se.

Chime in. What do you think?

So now we’ve shared the problem. What do we do about it? We are not the first to think about this problem. We are certainly not the smartest people who have tried to think of simple solutions. However if we expand the term “we” to include you, our readers, then as a group we can perhaps come up with a solution, or at worst a working hypothesis.

Let us hear from you, and if you would like to use this forum to blog about your idea, we are open to discussion. We will publish responses to get this topic into an interactive forum for debate. After all, each of us is trying to make a positive difference