IT Support, Security & Managed IT Services Blog - iCorps

Nonprofit Risk Management: Tackling Regulatory Shifts with an MSP/MSSP

Written by Jeffery Lauria | 8/12/25 2:00 PM

Nonprofits across the United States face an increasingly complex web of government regulations and cybersecurity laws. These regulations, implemented at both the federal and state levels, have a direct impact on how nonprofits gather, manage, and safeguard sensitive information. They also outline the procedures for reporting breaches and ensuring compliance. Keeping up with these changes is crucial for maintaining mission continuity, preserving donor trust, and providing legal protection.

How Regulatory Compliance and Rule Changes Affect Nonprofits

New laws on cybersecurity and data privacy are transforming how nonprofits function, affecting everything from donor confidence to eligibility for funding. Here's how these rule changes could affect your business:

1. Fragment and Evolving Landscape

Remote work will be less about location and more about flexibility. Employees will demand seamless access to resources from any device, anywhere, at any time. This shift requires IT infrastructure to support a diverse, distributed workforce while maintaining security and efficiency.

2. Heightened Compliance Burden

Nonprofits operating in multiple states must adhere to the strictest applicable laws, which often means meeting the highest standards across all locations. New federal regulations, such as the Corporate Transparency Act (CTA), have added complexity by requiring nonprofits to submit Beneficial Ownership Information (BOI) reports to FinCEN. These reports have strict deadlines, and failure to comply can result in significant penalties. Additionally, nonprofits that spend $1,000,000 or more in federal funds are required to undergo a federal "Single Audit." Furthermore, all nonprofits must comply with Generally Accepted Accounting Principles (GAAP) as well as the specific audit regulations of their respective states.

3. Donor and Stakeholder Trust at Stake

Nonprofits manage sensitive information about donors, beneficiaries, and finances. Breaches or compliance failures can result in fines, loss of tax-exempt status, and most importantly, the erosion of donor trust and community reputation.

4. Funding and Grant Requirements

Many government and private grants now require evidence of cybersecurity controls and adherence to relevant laws and regulations. Failure to comply can jeopardize future funding opportunities.

What Nonprofits Can Do to Stay Ahead

Maintaining compliance in a changing regulatory environment doesn’t have to be daunting. With the right strategies, nonprofits can transform compliance from a burden into an advantage. Here are practical steps to keep your organization secure and compliant:

1. Build a Culture of Compliance and Security

Leadership must champion security, set clear objectives, allocate resources effectively, and regularly review and update policies to ensure ongoing effectiveness and efficiency. Make cybersecurity and compliance part of the organization's DNA, not just an IT project.

2. Conduct Regular Risk Assessments

Identify and inventory all sensitive data, evaluate potential threats, and systematically assess vulnerabilities. Prioritize risks and address them in an organized manner.

3. Implement and Document Security Policies

Develop comprehensive policies covering data protection, password management, incident response, and remote work. Maintain audit-ready documentation to satisfy state, federal, and grantor requirements.

4. Train Staff and Volunteers

Provide ongoing cybersecurity training for all staff and volunteers, including simulated phishing exercises and incident response drills, to ensure a comprehensive approach to cybersecurity. Tailor training for leadership and privileged users who face elevated risks.

5. Establish and Test Incident Response Plans

Prepare for breaches by establishing clear response procedures, communication plans, and conducting regular tabletop exercises to ensure readiness and preparedness.

6. Leverage the Right Technology and Controls

Use encryption, multi-factor authentication (MFA), secure backups, and continuous monitoring to protect sensitive data. Regularly patch and update all systems to mitigate vulnerabilities.

7. Partner with an MSP or MSSP

  • MSP (Managed Service Provider): Offers broad IT management, including baseline cybersecurity, patch management, and help desk support—ideal for nonprofits needing general IT support and basic security services.

  • MSSP (Managed Security Service Provider): Specializes in advanced cybersecurity, including 24/7 monitoring, threat detection, compliance management, and incident response. Essential for nonprofits with complex compliance requirements, high-risk data, or limited in-house security expertise.

How an MSP or MSSP Helps:

  • Guides nonprofits through state and federal compliance requirements, helping to develop policies, conduct risk assessments, and prepare for audits.

  • Provides ongoing monitoring, rapid incident response, and regular staff training to maintain the organization's security and compliance.

  • Assists with documentation, reporting, and technology upgrades to meet evolving legal standards.

More About iCorps

iCorps Technologies is a leading provider of managed IT and cybersecurity services for organizations nationwide. With decades of experience helping nonprofits and businesses build resilient, compliant, and secure technology environments, iCorps delivers tailored solutions to meet the unique regulatory and operational challenges facing the nonprofit sector.

Contact us to see how we can help your nonprofit today.