According to Giving USA, charitable contributions in 2020 exceeded $470 billion, 70 percent of which came from individuals.  Individuals deciding to donate to a particular organization may be considering factors beyond the organization’s particular mission, however compelling it may be. Misleading GoFundMe campaigns, FTC crackdowns on deceptive charities, and poorly run organizations are some of the reasons for increased scrutiny. One more reason is concern over how not-for-profit and charitable organizations handle donor personal information.

According to some reports, a third of donors perform research before donating. To assist these donors, several third-party rating sites, such as Charity Navigator, the Wise Giving Alliance, and CharityWatch, do much of the legwork for donors. They collect large amounts of data about these organizations, such as financial position, use of donated funds, corporate governance, transparency, and other practices. They obtain most of that data from the organizations’ Forms 990 and websites, where many organizations publish privacy policies.

Rating sites such as Charity Navigator base their ratings on comprehensive methodologies. A significant component of Charity Navigator’s rating, for example, relates to accountability and transparency, made up of 17 categories. A review of an organization’s website informs five of those 17 categories, namely (i) board members listed, (ii) key staff listed, (iii) audited financials published, (iv) Form 990 published, and (v) privacy policy content. Charity Navigator explains why it considers website privacy policies and which policies receive the highest rating:

Donors can be reluctant to contribute to a charity when their name, address, or other basic information may become part of donor lists that are exchanged or sold, resulting in an influx of charitable solicitations from other organizations. Our analysts check the charity’s website to see if the organization has a donor privacy policy in place and what it does and does not cover.  Privacy policies are assigned to one of the following categories:

Yes: This charity has a written donor privacy policy published on its website, which states unambiguously that (1) it will not share or sell a donor’s information with anyone else, nor send donor mailings on behalf of other organizations or (2) it will only share or sell personal information once the donor has given the charity specific permission to do so.

Opt-out: The charity has a written privacy policy published on its website which enables donors to tell the charity to remove their names and contact information from lists the charity shares or sells. How a donor can have themselves removed from a list differs from one charity to the next, but any and all opt-out policies require donors to take specific action.

No: This charity either does not have a written donor privacy policy in place or the existing policy does not meet our criteria for protecting contributors’ personal information.

The privacy policy must be specific to donor information. A general website policy which references “visitor” or “user” personal information is insufficient. A policy that refers to donor information collected on the website is also not sufficient as the policy must be comprehensive and applicable to both online and offline donors. The existence of a privacy policy of any type does not prohibit the charity itself from contacting the donor for informational, educational, or solicitation purposes.

Regulatory compliance obligations for websites have expanded in recent years, with privacy policies among the requirements. Even a website compliant with applicable regulation, however, may not derive an optimal score with Charity Navigator. For example, in many cases, website privacy statements need only apply to data collected on the website, not elsewhere at the organization. Also, website regulations do not require donors be specifically addressed. The point reduction for non-conforming privacy policies is relatively small for Charity Navigator, but can have an impact. Rating company CharityWatch reports on privacy policies “as an informational benchmark” but does not factor that information into its ratings.

The extent to which donors might direct their charitable dollars away from organizations without optimal ratings on privacy is unclear. At the same time, quickly posting a privacy policy to enhance a third-party rating in the hope of driving additional donors is probably not a prudent response. Not-for-profit, charitable organizations want to be sure their website privacy policies are compliant and consistent with their practices involving data, while also positioning them well to maximize donations in support of their mission. Drafting and maintaining these policies takes considerable care and attention.

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Photo of Joseph J. Lazzarotti Joseph J. Lazzarotti

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP)…

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the International Association of Privacy Professionals. Trained as an employee benefits lawyer, focused on compliance, Joe also is a member of the firm’s Employee Benefits practice group.

In short, his practice focuses on the matrix of laws governing the privacy, security, and management of data, as well as the impact and regulation of social media. He also counsels companies on compliance, fiduciary, taxation, and administrative matters with respect to employee benefit plans.

Privacy and cybersecurity experience – Joe counsels multinational, national and regional companies in all industries on the broad array of laws, regulations, best practices, and preventive safeguards. The following are examples of areas of focus in his practice:

  • Advising health care providers, business associates, and group health plan sponsors concerning HIPAA/HITECH compliance, including risk assessments, policies and procedures, incident response plan development, vendor assessment and management programs, and training.
  • Coached hundreds of companies through the investigation, remediation, notification, and overall response to data breaches of all kinds – PHI, PII, payment card, etc.
  • Helping organizations address questions about the application, implementation, and overall compliance with European Union’s General Data Protection Regulation (GDPR) and, in particular, its implications in the U.S., together with preparing for the California Consumer Privacy Act.
  • Working with organizations to develop and implement video, audio, and data-driven monitoring and surveillance programs. For instance, in the transportation and related industries, Joe has worked with numerous clients on fleet management programs involving the use of telematics, dash-cams, event data recorders (EDR), and related technologies. He also has advised many clients in the use of biometrics including with regard to consent, data security, and retention issues under BIPA and other laws.
  • Assisting clients with growing state data security mandates to safeguard personal information, including steering clients through detailed risk assessments and converting those assessments into practical “best practice” risk management solutions, including written information security programs (WISPs). Related work includes compliance advice concerning FTC Act, Regulation S-P, GLBA, and New York Reg. 500.
  • Advising clients about best practices for electronic communications, including in social media, as well as when communicating under a “bring your own device” (BYOD) or “company owned personally enabled device” (COPE) environment.
  • Conducting various levels of privacy and data security training for executives and employees
  • Supports organizations through mergers, acquisitions, and reorganizations with regard to the handling of employee and customer data, and the safeguarding of that data during the transaction.
  • Representing organizations in matters involving inquiries into privacy and data security compliance before federal and state agencies including the HHS Office of Civil Rights, Federal Trade Commission, and various state Attorneys General.

Benefits counseling experience – Joe’s work in the benefits counseling area covers many areas of employee benefits law. Below are some examples of that work:

  • As part of the Firm’s Health Care Reform Team, he advises employers and plan sponsors regarding the establishment, administration and operation of fully insured and self-funded health and welfare plans to comply with ERISA, IRC, ACA/PPACA, HIPAA, COBRA, ADA, GINA, and other related laws.
  • Guiding clients through the selection of plan service providers, along with negotiating service agreements with vendors to address plan compliance and operations, while leveraging data security experience to ensure plan data is safeguarded.
  • Counsels plan sponsors on day-to-day compliance and administrative issues affecting plans.
  • Assists in the design and drafting of benefit plan documents, including severance and fringe benefit plans.
  • Advises plan sponsors concerning employee benefit plan operation, administration and correcting errors in operation.

Joe speaks and writes regularly on current employee benefits and data privacy and cybersecurity topics and his work has been published in leading business and legal journals and media outlets, such as The Washington Post, Inside Counsel, Bloomberg, The National Law Journal, Financial Times, Business Insurance, HR Magazine and NPR, as well as the ABA Journal, The American Lawyer, Law360, Bender’s Labor and Employment Bulletin, the Australian Privacy Law Bulletin and the Privacy, and Data Security Law Journal.

Joe served as a judicial law clerk for the Honorable Laura Denvir Stith on the Missouri Court of Appeals.