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Why Nonprofits Should Get Ready For Data Privacy & AI Compliance

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It is no secret that nonprofits are under pressure. With decreasing donations and an ever-growing demand for services, nonprofits struggle to keep up with their stakeholder expectations. At the same time, we are seeing rapid advancements in technology - particularly in artificial intelligence (AI) and machine learning. Nonprofits need to start paying more attention to these innovative technologies. However, many do not realize that they are also responsible for being compliant with global data privacy laws and AI ethics governance.

Nonprofits Face New Challenges in the Digital Economy

As the world becomes more digitized, nonprofits must adapt to new ways of working to protect the people they serve. One area that nonprofits need to pay attention to is data privacy compliance and AI ethics compliance. When nonprofits understand these regulatory risks and take steps to mitigate them, they avoid data breaches. They also respect people's privacy rights and promote human rights that these technologies impact.

Nonprofits face unique challenges regarding protecting personally identifiable information that data privacy regulations require. They also encounter several challenges in meeting international compliance with AI ethics governance principles. Unlike businesses, nonprofits typically do not have the same legal resources or expertise to focus on these legal compliance matters. This can make it challenging for nonprofits to comply with applicable data privacy laws and AI ethical frameworks. Major governance frameworks include those in the U.S., Canada, the European Union (GDPR), Brazil, South Africa, New Zealand, and China.

Reasons Why Nonprofits Need To Get Ready To Comply

1. Nonprofits will be subject to new data privacy laws and AI regulations

According to The Harvard Business Review, all organizations must proactively prepare for upcoming data privacy protection and AI regulations. Unfortunately, 90% of SMEs and nonprofits are not ready for compliance with such comprehensive legal and regulatory frameworks. This is because they lack time, money, staff, and automation. When nonprofits do not get ready to comply, they create enormous risks for their organizations. These risks include cybersecurity, operational, financial, compliance, and reputational risks. Those who violate these international laws may receive monetary or other penalties of up to a million dollars. Nonprofits need to mitigate the risks associated with these issues to ensure compliance with privacy and AI regulations. Your nonprofit must create opportunities now and take proactive steps to comply with current and emerging privacy and AI regulations globally.

2. Nonprofits are attractive targets for cybercriminals

Nonprofits collect a lot of personal data from donors, prospective donors, employees, volunteers, vendors, website visitors, and other stakeholders. This personal data could include sensitive information about a person's health, financial situation, or political views. If this data falls into the wrong hands, it could be used to exploit individuals or manipulate public opinion. A nonprofit's treasure trove of personal data makes it an attractive target for cybercriminals. The Blackbaud ransomware attack is a prime example of why nonprofits must be vigilant about privacy and AI ethics compliance. In this case, sensitive information about donors and beneficiaries was compromised. As a result, nonprofits lost the public's trust and experienced a decrease in donations. Your nonprofit must make it a top priority to protect personal data and ensure that it is being used responsibly.

3. Nonprofits must adopt AI tools that advance their mission

Nonprofits are increasingly adopting AI technologies. For example, they are using AI to better understand the needs of their constituents and target their resources more effectively. Nonprofits need to understand how they will use AI to ensure that it aligns with their mission and values. They need to be aware of the ethical and privacy impacts of AI on their stakeholders. Nonprofits also need to be aware of the potential risks associated with AI, such as algorithmic bias and discrimination. Another area of concern is the lack of transparency around how AI systems make decisions. Because these systems are often opaque, it can be difficult for nonprofits to ensure that they are complying with ethical principles. Your nonprofit can make sure that it is using these technologies responsibly by conducting privacy impact assessments and algorithmic impact assessments regularly.  

Tips On How Your Nonprofit Can Get Started

1. Educate your staff and volunteers about data privacy, information security, and responsible AI use

According to the Harvard Business Review, all organizations need to upskill their employees through privacy and AI ethics literacy programs. Why? Because privacy and AI ethics literacy are necessary to effectively mitigate a nonprofit's privacy and AI ethical risks. Organizations that undertake risk management processes for these governance challenges gain a competitive advantage in this digital, AI-driven economy. Make sure everyone on your team understands the importance of these issues and knows how to comply with your policies. Regular training can help reduce the chances of a data breach or AI ethics breach.

2. Implement privacy policies, practices, and procedures on data privacy, information security, and responsible AI use

When it comes to privacy and AI compliance, nonprofits must be extra careful. Not only do they have to collect data responsibly, but they also must ensure that it is used ethically. Be thoughtful about what data you collect and why. Collect only the data necessary to achieve your mission and ensure that it is accurate and up to date. You can help keep your beneficiaries safe and ensure that your nonprofit is reliably using technology.

3. Ensure that the data you collect is securely stored and accessed only by those who need it

Implement privacy and security measures such as encryption, user authentication, and physical security. Be transparent about the data you collect, its use, and with whom it is shared. Allow your beneficiaries to access and correct their own data. Consider adopting data protection principles when implementing innovative technologies. Respect user privacy by default. Allow your beneficiaries to opt-in to data collection, rather than assuming they are okay with it. Minimize the data you collect. Only collect the data that is necessary to achieve your mission. Keep your data always secure to avoid a data security breach.

4. Regularly review and update your privacy and responsible AI policies

The privacy of your beneficiaries should be of the utmost importance. Make sure that you have policies and procedures in place to protect their information. As the landscape of privacy and AI changes rapidly, your nonprofit must regularly review its policies to ensure that they are still up-to-date and effective. Regular updates will help you keep beneficiaries safe and ensure that your nonprofit is using technology responsibly. Consider using anonymized data whenever possible.

5. Use AI technology responsibly and be aware of the potential for bias

With the power of AI, comes great responsibility. Make sure that your nonprofit is using AI ethically and responsibly. Review your algorithms and data sets to ensure that they are not biased. AI is only as good as the data that it is trained on. If your data is biased, your AI will be biased as well. Be sure to check your data sets for any potential biases. If you find any bias, take steps to mitigate them by conducting algorithmic impact assessments. By taking these precautions, you can ensure that your nonprofit is using AI in a responsible and ethical manner.

Go Beyond Compliance For Positive Impact

Nonprofits need to get ready for data privacy, data security, and AI compliance. There are a lot of risks associated with collecting data and using AI technologies. However, there are also a lot of opportunities for nonprofits who want to stay ahead of the curve. Your nonprofit can proactively comply with privacy and AI ethics laws to maintain the trust and confidence of its donors, clients, and other stakeholders.

By getting ready to comply with comprehensive privacy and AI regulations, your nonprofit can leverage AI as a powerful tool for good and positively impact the world.


Josephine Yam is the CEO & Co-Founder of Skills4Good AI. Skills4Good AI is a one-stop platform for privacy & AI compliance designed for SMEs and nonprofits. Our Responsible AI Program provides organizations with a foundational AI ethics program for upskilling employees with AI ethics literacy, which we developed with top AI professors. We also help nonprofits comply with rapidly changing global privacy & AI regulations in a seamless and cost-effective way. We offer subscription packages for nonprofit privacy & AI compliance in the US, Canada, EU, Asia and Latin America.