The effects of a data breach can be disastrous for any company, but especially for a nonprofit organization, not only because of the harm to the affected individuals, including those served by the organization, but also the crippling effect it could have on day-to-day operations of an organization with limited resources. A security incident can also damage the organization’s reputation and ability to raise funds. Mitigating a data breach – which could include hiring network forensics investigators, retaining legal counsel, and sending breach notification letters to every person whose data may have been compromised – can get expensive quickly. Moreover, an organization’s own unintentional release of sensitive information could have consequences as serious as a security breach caused by a scammer.

Nonprofit organizations often collect personal information from a variety of sources such as donors, employees, volunteers, and the people who benefit from their services. This information is diverse and might include credit card and personal contact information of donors, financial and health information about the people served by the organization, and payroll and other employment information of its employees. The information collected and retained by nonprofit organizations is exactly the type of data cyber criminals pursue. Yet, often due to the nonprofit model, limited resources that could be used to proactively address cybersecurity threats may be allocated elsewhere. Even if resources are dedicated to cybersecurity, cyber criminals may perceive nonprofits as “soft targets.”

Unfortunately, an organization’s nonprofit status does not shield it from enforcement actions by government regulators such as the Federal Trade Commission (FTC) and the U.S. Department of Health and Human Services Office for Civil Rights (OCR), when the organization fails to safeguard the privacy and security of personally identifiable information it maintains. To help small organizations with their efforts to safeguard data, on October 25, 2018, the FTC released an alert with new cybersecurity resources specifically for nonprofits and small businesses. The FTC resources, available at FTC.gov/Cybersecurity, aim to help organizations protect the information they collect about people. The resources include to-the-point downloadable materials, on-line quizzes, and links to additional resources covering a number of topics, including:

  • Implementing cybersecurity basics such as setting automatic updates for operating systems, web browsers, and apps; regularly making secure back-ups of important files; and ensuring routers are not using outdated encryption.
  • How to identify, avoid, and address ransomware and phishing attacks.
  • Monitoring vendors who have access to the organization’s data to make sure that they are securing their own computers and networks.
  • Implementing physical security to protect equipment, devices, and even paper files.
  • Securing remote access so when employees or vendors need to connect to the organization’s network remotely there are security measures in place as well as guidance for staff on using those measures.
  • Understanding the National Institute for Standards and Technology (NIST) Cybersecurity Framework so nonprofits and small businesses can better manage and reduce the cybersecurity risks to their networks and data.

Related on-line materials provided by the FTC, Protecting Personal Information: A Guide for Business, provide guidance on developing a data security plan based on five key principles:

(1) know what personal information is stored on the computers;

(2) retain only the data that is necessary;

(3) protect the information that is kept;

(4) properly dispose of the data when it is no longer needed; and

(5) create a plan to respond to security incidents before a breach occurs.

Additionally, with a focus on HIPAA, the U.S. Department of Health and Human Services has prepared on-line Cyber Security Guidance Material.

Due to the nature and volume of personal information nonprofit organizations routinely handle, it is critical that they focus on protecting against cybersecurity threats as they continue to serve their communities. The FTC resources offer organizations with limited data security budgets tools to understand and prepare for such threats. Readers of this update are encouraged to share these resources with nonprofit organizations with which they are involved.

Akerman attorneys are available to provide guidance to nonprofit organizations wishing to reduce their legal exposure from cybersecurity threats.

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Photo of Elizabeth F. Hodge Elizabeth F. Hodge

A former president of the Florida Academy of Healthcare Attorneys, Betsy Hodge concentrates her practice on compliance and regulatory issues affecting health care providers and payers and employer-sponsored health plans. Betsy has significant experience with HIPAA and the HITECH Act and assists covered entities and business associates in complying with these laws through the development of policies and procedures, workforce training, analysis and notification of breaches, and assisting with government audits and investigations.  In addition, she counsels her clients on regulatory issues, including state and federal fraud and abuse laws.

 

Photo of Paul L. Kobak Paul L. Kobak

Paul Kobak litigates complex business cases in state and federal courts throughout Florida. He has experience handling a variety of matters, including shareholder disputes, violations of the federal Computer Fraud and Abuse Act, and breaches of a range of business contracts, including employment agreements, real estate agreements, and equipment leasing agreements. Paul also has substantial experience litigating intellectual property claims, including trademark infringement, copyright piracy and infringement, and false advertising.