Greater Giving has posted a few factoids that show just how important online donations have become to nonprofit fundraising. According to its report on ePhilanthropy…
- 60 percent of the dollars that were raised in the first weeks after the 2004 tsunami came from online donations.
- In two months, Barack Obama was able to raise $90 million — mostly in small donations online.
By accepting online donations, nonprofits can reach out to a wide audience of potential givers. So everything is peachy keen, right?
While ePhilanthropy can help your organization, you need to be prepared for your cyber risk exposure. Below, we’ll look at how nonprofits can minimize their cyber risks and what Cyber Liability Insurance offers for nonprofits.
Cyber Risks at Nonprofits: Why You Need to Protect Your Data
Why would criminals want to hack a nonprofit?
It might be helpful to talk about “hackers.” When people use the word “hacker,” it may bring to mind images of purple-haired cyber punks. In reality, hackers are just thieves looking to commit fraud. Any data that contains personal information about a user (whether it’s donor records or payment information) can be used to commit fraud.
Criminals might steal your records in order to:
- Apply for credit cards under a donor’s name.
- Make fraudulent transactions online.
- Commit other costly crimes.
When that happens, the nonprofit that allowed data to be stolen will have to bear the financial burden of cleaning up the mess.
How Much Does a Data Breach Cost for a Nonprofit?
When we talk about cyber risks, we’re talking first and foremost about a financial risk. Say your nonprofit offices experienced a devastating fire. You might not have the funds to rebuild, repair, and replace what you lost in the fire. Just as there are financial losses associated with fires, theft, and lawsuits, there are tremendous costs that come with cyber attacks.
After a data breach, you’d have to:
- Hire IT experts to repair your network.
- Pay for credit monitoring for your donors.
- Handle the PR mess that comes with a breach.
These costs add up quickly. According to Ponemon Institute’s 2014 Cost of Data Breach Study [PDF], when a small business is breached, each stolen or leaked record costs about $201. A small data breach of a few thousand records can rapidly cost tens or hundreds of thousands of dollars.
Cyber Liability Insurance for Nonprofits: Protection for Data Breaches
Criminals might target your organization hoping to break into your donor database or online payment system because of all the financial and personal data nonprofits retain. Even if your data is stored or hosted by another company, you can be liable when it’s stolen. Cyber Liability Insurance offers important cost certainty, protecting you from unexpected costs that can come with data breaches.
While online donations and ePhilanthropy have changed the nonprofit world for the better, don’t be caught off guard by the risks that come with accepting online giving.