Today the U.S. Supreme Court is considering whether or not to uphold Vermont’s law against selling prescription info to data mining companies. It’s a privacy issue with parallels to nonprofit fundraising – or is it? SCOTUSblog has a wonderfully readable account of the case.

In Vermont, when drug stores fill a doctor’s prescription they are required to record the doctor’s name and address, the name, dosage and quantity of the drug, the date and place where the prescription was filled, and the patient’s age and gender — but not patient name and address. Drug stores are required to keep this digital information and they make money selling it to data mining companies who sell it to the pharmaceutical industry who use it for marketing drugs. But the information is also available to insurance companies, medical research institutions, and law enforcement authorities. Vermont law keeps the information from the data mining companies, but not others.

So once again we have personal data, which many in the public perceive as being ill-used or over-used by huge corporations like big pharma, but which is also being used for important public benefits like disease tracking, clinical trials and law enforcement. Can we say no to one user and not another? Do we give up the benefits to keep the info completely private?

Although this case might seem far removed from the world of not-for-profit fundraising, it isn’t. Blackbaud is a huge corporation with the dominant market share of donor database software – Raiser’s Edge. And they are moving their customers online, which means Blackbaud holds the keys to your donor data. They conduct lots of useful fundraising industry research including their Index of Charitable Giving. Where do they get the info?

“Each month, we draw actual giving statistics from the databases of thousands of participating organizations using a variety of fundraising systems to determine how much revenue was raised in the prior month.”

I’m not sure if that means that they use their clients’ data with permission or whether they collect data from clients and non-clients. Does it matter? Nonprofits are providing their donor information to Blackbaud for research – but stripped of identifying information. Is it restricted to freely available research studies or do they also use it for commercial purposes? Does that matter?

In March of 2010 I wrote about Google’s use of “data dust”. I suggested we should be able to use our own “donor dust” to help create a better experience for our donors. But it makes me uncomfortable to think of the possibility of Blackbaud sweeping up our collective donor dust and then reselling it for profit or using it for their own marketing.

The question shares many similarities with  the prescription drug case in Vermont. There will be good and meaningful uses for following fundraising trends gleaned from a corporation’s clients’ donor data, but is it legal and is it ethical?