Cybersecurity Basics: Protecting Donor and Program Data to Build Funder Trust

In the digital age, a grant proposal is no longer just a financial request; it’s a statement of organizational health. And increasingly, one of the most significant factors in a funder’s due diligence is a question that often goes unasked but is always considered: Is this nonprofit secure?

Funders are acutely aware of the rising prevalence of data breaches. They understand that a cyberattack on a grantee can lead to severe consequences: compromised donor lists, leaked beneficiary information, reputational damage, and the misuse of their grant dollars to recover from the incident.

When you demonstrate a commitment to cybersecurity, you are demonstrating responsible stewardship—a cornerstone of funder trust. The good news is that you don’t need a large IT budget to implement the fundamental protections that mitigate risk and impress grant committees.

Here are the basic, non-negotiable steps every nonprofit must take to protect data and build funder confidence.

1. The Multi-Factor Mandate: End the Password Problem

The vast majority of cyber breaches start with compromised passwords. If a funder sees that your organization is relying solely on basic passwords, it signals a significant security gap.

• The Basic Step: Implement Multi-Factor Authentication (MFA) for all critical accounts—especially email, your CRM, and banking portals. MFA requires a second verification step (like a code from a phone app) in addition to the password.
• The Funder Benefit: MFA is the single most effective security measure against unauthorized access. Mentioning its mandatory use in your “Risk Management” section shows you are taking proactive steps to protect your digital assets.

2. Segmented Access: Only Give Keys to Those Who Need Them

Your accounting intern does not need access to the mental health records of your beneficiaries. Giving everyone “all-access” privileges dramatically increases your risk profile.

• The Basic Step: Adopt a “Principle of Least Privilege.” Restrict access to sensitive data (like donor financial details, personal client information, and HR files) only to the individuals who absolutely need it for their job.
• The Funder Benefit: This demonstrates that you have clear internal controls for data handling. Funders want assurance that their grant-funded program data is not being indiscriminately shared across the organization.

3. The Backup Requirement: Protecting Against Ransomware

Ransomware—where criminals encrypt your data and demand payment for its release—is a growing threat to nonprofits. If you can’t restore your data, your programs stop, and the funder’s investment vanishes.

• The Basic Step: Implement the 3-2-1 Backup Rule:
  • 3 copies of your data (the original plus two backups).
  • 2 different storage types (e.g., cloud and external drive).
  • 1 copy stored off-site (or offline/air-gapped from your network).
• The Funder Benefit: Having a robust, tested recovery plan signals resilience. You are essentially telling the funder, “If we are attacked, we can be back up and running within hours, and your investment is safe.”

4. Staff Training: Closing the “Human Firewall” Gap

Technology is only as secure as the people using it. Most successful cyberattacks use social engineering (like phishing emails) to trick staff members into giving away credentials.

• The Basic Step: Conduct mandatory, quarterly cybersecurity awareness training for all staff and board members. Focus on identifying phishing emails, the dangers of clicking unknown links, and organizational policies for handling sensitive data.
• The Funder Benefit: Demonstrating a recurring, organization-wide commitment to security training proves that it is a cultural priority, not just an IT afterthought.

The Grant Advantage: Making Security Explicit

Don’t assume funders know you’re secure—tell them.

In the Organizational Capacity or Risk Management section of your next proposal, include a concise statement that outlines your commitment:

“Our organization prioritizes the integrity of donor and beneficiary data. We maintain a clear data management policy that includes mandatory Multi-Factor Authentication for all critical systems, follows the Principle of Least Privilege for data access, and utilizes a tested 3-2-1 backup strategy to ensure organizational resilience.”

This simple statement moves cybersecurity from a tacit expectation to a concrete competitive advantage, distinguishing your organization as a responsible, resilient, and trustworthy partner.

Is your organization’s security posture strong enough to earn a funder’s confidence? Let us audit your basic cybersecurity practices and help you develop a clear, low-cost plan to protect your data and boost your grant-winning potential.