Donor Trust in the Age of Cyber Risk: Why Cybersecurity Is Essential for Nonprofit Impact

In today’s hyper-connected environment, nonprofits are more exposed to digital risk than ever before. Cybersecurity isn’t just about preventing data loss — it’s about preserving the very trust that enables them to serve.

Still, many nonprofits don't have basic cybersecurity policies in place. Without a strong cybersecurity strategy, even the most well-intentioned organizations can find their missions at risk.

Why Cybersecurity Matters to Nonprofits

The nonprofit sector is a growing target for cybercriminals. One breach can unravel years of credibility, jeopardizing donor confidence, grant eligibility, and operational continuity.

Here’s the reality:

• Limited budgets can mean outdated systems and overlooked patches.
• Staff and volunteers may lack proper training or access controls.
• Personally identifiable information of donors, clients, and partners is a prime target for exploitation.

So how do mission-driven organizations protect what they've built? By thinking of cybersecurity as a strategic enabler, not a cost center.

What Nonprofits Need to Be Talking About

Most cybersecurity guidance still treats risk like something to avoid. But the truth is: risk is constant. The opportunity lies in anticipating it, managing it, and designing systems around it.

1. Cybersecurity is an Issue of Donor Trust

Donors give because they believe in the cause and in your ability to steward both funds and data responsibly. A breach can damage years of relationship-building in an instant.

Consider these tips to handle donor data responsibly:

• Develop a formal data privacy policy and communicate it publicly
• Segment donor data and apply role-based access
• Regularly audit data retention and disposal practices

Include security updates and certifications in annual reports to reinforce donor trust.

2. Affordability Doesn't Mean Insecurity

Over 80% of the nation’s charitable nonprofits run on an annual operating budget of $500,000 or less. But that doesn’t mean cybersecurity is out of reach.

• Implement multi-factor authentication (MFA). Studies have shown that the use of MFA on your accounts can make you 99% less likely to be hacked.
• Low-cost penetration testing or phishing simulations can identify major weaknesses.
• Cloud-based data platforms offer built-in controls that replace piecemeal workarounds.

The key is to prioritize what matters most — and implement controls that scale.

According to a survey by TechSoup, nonprofits that have adopted digital tools report a range of benefits, including:

• Improved Efficiency (74%)
• Better Collaboration and Communication (68%)
• Increased Transparency and Accountability (53%)

3. The Human Element Can't Be Ignored

Most breaches start with a person: an accidental click, a reused password, a skipped update.

Nonprofits need a people-first approach to protection, including:

• Real-world, scenario-based training
• Clear policies that include volunteers and remote staff
• Encouraging a "report early" culture instead of shame-based responses

In a nonprofit, rotating staff, volunteers, and remote teams can lead to gaps in awareness. And when 95% of cybersecurity breaches involve human error, empowering people is the fastest path to protection.

4. Response Planning is Part of Responsible Governance

What would happen if a ransomware message appeared tomorrow? Who would you call? What systems would you check first?

Most nonprofits don’t have a formal incident response plan. That’s a major vulnerability. An incident response plan doesn’t have to be complicated. But it does have to be clear, current, and practiced.

• Outline key systems, responsibilities, and communication protocols
• Keep a contact list of trusted advisors and vendors
• Conduct an annual tabletop exercise

Our Work in Action

A nonprofit with access to data on millions of donors and stringent compliance requirements came to us to assess their cybersecurity risks and build a practical roadmap. Together, we created a Disaster Recovery Policy, which led to proactive protection that helped stop malicious actors from attacking.

What Proactive Cyber Risk Looks Like in Action

Healthcare on the Front Lines

A rural nonprofit health center needed to expand services while securing patient data and maintaining compliance. By centralizing operations and optimizing compliance structures, including accounting, cost reporting, and price transparency, they were able to reduce vulnerability, qualify for new funding, and respond faster to community needs.

Scaling with Security

A global humanitarian organization faced growing data complexity across regions and languages. Working with external advisors, they built a governance and resource management framework that included security by design. The result: scalable growth without sacrificing integrity.

A Call to Nonprofit Leaders

Nonprofit leaders must evolve the conversation around cybersecurity — from cost to capability, from technical to strategic.

Your donors, clients, and staff deserve a system that supports their trust.

At Eide Bailly, we help nonprofits:

• Build affordable, scalable cybersecurity programs
• Align compliance and internal controls with growth goals
• Educate leadership teams on risk and resilience
• Turn cyber risks into operational advantages

Let's secure your mission. Talk to our nonprofit team about cybersecurity readiness.

Frequently Asked Questions

What makes nonprofits a target for cyberattacks?

Nonprofits often manage sensitive donor, client, and employee data but operate with limited resources and security staff. This combination makes them attractive targets for cybercriminals seeking valuable information or financial gain, even from smaller organizations.

Why is cybersecurity a nonprofit board responsibility?

Cybersecurity oversight is part of a board’s fiduciary duty to protect organizational assets, including financial data, donor information, and systems that support mission delivery. While management handles daytoday controls, boards are responsible for ensuring cyber risk is identified, monitored, and addressed as part of overall governance.

How does cybersecurity affect donor trust?

Donors trust nonprofits to steward both their funds and their personal information responsibly. A data breach can undermine confidence, interrupt fundraising, and put grant funding or partnerships at risk. Strong cybersecurity practices help maintain transparency and protect the trust that nonprofits rely on to fulfill their mission.

What cybersecurity risks should nonprofit boards be aware of?

Nonprofit boards should understand common risks such as phishing attacks, ransomware, unauthorized access to financial systems, and data breaches involving donor or client information. These risks often intersect with financial reporting, compliance, and operational continuity, making them a governance concern—not just an IT issue.

How should cybersecurity connect to nonprofit financial oversight?

Cyber incidents can result in financial loss, regulatory penalties, operational disruptions, and damage to public trust. Boards should ensure cybersecurity risk is evaluated alongside financial controls, internal audits, and compliance efforts as part of a broader financial oversight framework.

What role does internal control play in nonprofit cybersecurity?

Internal controls help nonprofits manage access to systems and data, reduce the likelihood of errors or misuse, and ensure accountability. When integrated with cybersecurity practices, internal controls support accurate financial reporting and protect both digital and financial assets.

Do small nonprofits need cybersecurity governance?

Yes. Cybersecurity requirements scale with an organization’s size and complexity, but all nonprofits need fundamental safeguards. Boards of smaller nonprofits should still require basic controls, risk assessments, and reporting to ensure appropriate protection based on available resources.

How often should nonprofits assess cybersecurity risk?

Cyber risk should be reviewed regularly, not only after an incident. Boards benefit from periodic updates on cybersecurity posture, emerging risks, and any changes to systems or data usage that could impact organizational exposure.

How does cybersecurity support long-term nonprofit sustainability?

Strong cybersecurity reduces the likelihood of costly disruptions, protects mission critical systems, and reinforces stakeholder confidence. By treating cyber risk as part of governance and financial stewardship, nonprofits are better positioned for resilience and long-term impact.