By Anne Wallestad, president & CEO
A proposed change in IRS rules would require some nonprofits to collect their donors’ social security numbers. Because BoardSource believes this would have damaging impact on nonprofits, I submitted the following comment to the IRS in opposition to the proposal. My comment, as well as comments submitted by hundreds of other nonprofit leaders, can be viewed here.
As the president and CEO of BoardSource, the leading organization dedicated to strengthening nonprofit board leadership and governance, I am very concerned about this proposed regulation which invites nonprofit organizations to begin collecting social security numbers from their donors.
In a time where identity theft and data hacking present a real threat to all organizations and companies, nonprofit organizations should be actively discouraged from collecting social security numbers from donors, which opens both nonprofits and their donors up to unnecessary risks. Nonprofit organizations -- the vast majority of which have budgets of less than $1,000,000 -- are often not in a position to make expensive investments in data security measures, making them extremely attractive targets to potential hackers and very vulnerable to the damaged reputation and legal liability associated with a potential breach.
Furthermore, given growing concern within the public about fraudulent or unethical nonprofit fundraising activities, inviting nonprofit organizations to begin asking donors and potential donors for their social security numbers will undoubtedly raise concerns and skepticism from many potential donors, and make it easier for fraudulent or unethical entities to access highly sensitive donor information under the guise of legitimate fundraising practices. This will increase the risks of fraud and theft from donors and make it more difficult for organizations to raise the necessary funds to support their important missions, thereby harming both donors and organizations in real and irreparable ways.
The work of the nonprofit sector relies on our ability to earn and maintain the trust and confidence of our donors and those we serve. Let us not erode that trust by creating unnecessary and dangerous ambiguity about the appropriateness of collecting our donors' social security numbers.