Nonprofits, Data Privacy and Capitol Hill

Are you following the discussions on consumer data privacy and big data? If you aren’t, and you are in the fundraising business, then you should.

Whether the issue is identity theft, hackers getting millions of credit card records, or the NSA monitoring everything from email to phone calls, consumer data privacy is getting lots of attention.

Especially on Capitol Hill.

A few months back, we provided an update on steps taken by Senator Rockefeller’s Senate Committee on Commerce, Science and Transportation to expand its investigation into the data brokerage industry. Data brokers deal in “big data” – the acquisition, aggregation, and sale of data about people and organizations. Where does it comes from, how is it stored and organized, who wants it and why, and so on.

This past May, however, was an exceptionally busy month for consumer data privacy.

May in Washington, DC

First, on May 1, the White House released a report on big data and privacy that includes background information on the subject and policy recommendations going forward.

On May 27th, the Federal Trade Commission released a report about data broker practices, with recommendations focusing on greater transparency for consumers.

Finally on May 31st, Washington Post Editorial Board published an opinion piece advocating on the side of consumer rights. The Post continues to follow this issue with great interest.

That’s three institutions that should get our attention.

The common thread

The common thread is the pursuit of greater transparency on behalf of the consumer. In particular, the Post’s Editorial Board calls for greater transparency for consumers when it comes to data. For example, consumers by law have access to credit reports used in making financial decisions about the consumer. It’s time for consumers to have access to the collection of data used by marketers, argues the Post.

Is big data bad?

Certainly not. Data is aggregated, analyzed and put to all sorts of good uses. Data is the way that an organization or institution understands its customer or consumer. People know people – but organizations know data.

So whether it’s our local government using data to improve traffic patterns or study crime, or it’s a business that wants to understand how to produce a better product or deliver a better experience to the consumer, there are many ways that data aggregation, mining and analysis are benefiting us.

That said, consumer data privacy rights are important. The more informed we are about what is happening around big data, the better we will make decisions about our privacy, and that of our consumers or donors. Hmmm … did I say “donors”?

What about donors?

To our nonprofit professional colleagues, always remember that when you hear “consumer data”, you should think “donor data” – they are one in the same. Data warehouses that capture and store consumer data include donations, nonprofit board service, participation in fundraising walks, and any number of additional statistics related to the third sector.

What to do?

Nonprofits rely on consumer data, data aggregation, and data brokers. We work hard to learn more about our donors and constituents, and what we learn, we store as data. So we need to understand how potential changes in government policy and the law may impact us down the road … how it may impact our access to data, or require changes in our own data management polices.

Our best advice is for every nonprofit to invest in its own capacity to learn about its donors and prospective donors, to capture that data, and to keep it clean and current. Don’t miss opportunities to better engage with your constituents, learn more about them, and develop long term relationships. You’ll be more successful when you aren’t just focused on acquiring a donation today.

Remember, your people know donors as people, but your organization only knows them through the data that you acquire and keep. If you are struggling to figure out how to use better data to build better donor relationships, please let us know. We’d love to help.

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