The 501 S(c)ene

The latest view on not-for-profit accounting issues

Do You Have a Donor Privacy Policy?

As accumulating personal information such as names, addresses, and credit card numbers from donors and special event attendees becomes both easier and more useful due to the implementation of donor databases, nonprofits should consider implementing a donor privacy policy. A donor privacy policy can be a simple paragraph, or as detailed as the nonprofit chooses, but the type of policy will need to be determined. The organization may either have an explicit approval policy or an opt-out policy. An explicit approval policy communicates to donors that the organization will not sell or share their donor’s personal information without their permission, and gives the donor the option to allow the organization to use their information. An opt-out policy notifies donors that their information may be used by the organization unless the donor “opts-out”, and requests that the organization not sell or share their information.

Having a donor privacy policy can allow the nonprofit to communicate to their donors the importance that they place on protecting their donor’s information. Additionally, Charity watchdog organizations such as Charity Navigator are also monitoring whether nonprofits have a donor privacy policy. In the Charity Navigator scoring system, the existence or lack of a donor privacy policy will factor into the nonprofit’s “accountability and transparency” score. An example of a standard donor privacy policy can be seen on the Charity Navigator website.

By Paul Biggs