Non-profit’s Trade Secrets

TVScreenShotIn a recent situation, the Red Cross maintained the confidentiality of what it deemed its trade secrets but may have damaged its image in the process.

Because much of the non-profit world takes a very different view and shares a great deal with others, this example stands out.

Now when one Googles “Red Cross”, several stories are about this issue.  The stories generally paint the Red Cross in a poor light.

Following Hurricane Sandy, the New York State’s Attorney General requested information as to how the Red Cross spent relief donations.

ProPublica, an independent, non-profit newsroom that produces journalism in the public interest, filed a public records request for the information the Red Cross provided to the New York AG (see link to article below).

After 0bjection by the Red Cross that its response to the New York AG was confidential and should be protected as “trade secrets”, the AG declined to release the information other than a small portion deemed not confidential.

In this and in other recent court cases, non-profit organizations have been granted confidentiality for information such as donor lists, operating procedures and internal strategies.

An article by Orrick’s Trade Secrets Group on JDSupra, the online legal magazine, highlights some key considerations on this issue.

“Two take-aways from these cases:

First, charities, non-profits, and publicly-funded entities should not ignore the opportunities they may have to protect their hard-earned donor lists and (maybe) other proprietary information as trade secrets.

Second, these types of organizations should consider their unique public relations concerns before claiming trade secret protection.”

The Red Cross is a big organization that gets donations from the broad, uniformed public so this issue is not likely to have much impact on it but for other non-profits, this is an issue to consider.

Copy and paste the link below to go to the Orrick article on JDSupra.

http://www.jdsupra.com/legalnews/donate-dont-tell-the-red-cross-says-i-82718/

Copy and paste the link to the ProPublica article.

http://www.propublica.org/article/red-cross-how-we-spent-sandy-money-is-a-trade-secret