Blackbaud Settles with FTC in Milestone Agreement Following Data Breach Incident

by | Feb 4, 2024

Education tech leader Blackbaud has settled with the U.S. Federal Trade Commission (FTC) following a major data breach that exposed the personal information of millions of consumers. The FTC has criticized Blackbaud for its inadequate security protocols, raising concerns about the company’s commitment to protecting sensitive data. This breach, which lasted over three months, has highlighted the importance of implementing proper cybersecurity measures and responding promptly to such incidents.

FTC Allegations:

The FTC claims that Blackbaud failed to use multi-factor authentication, leaving employee accounts vulnerable to exploitation. Additionally, the company allowed customers to store sensitive data in unencrypted fields, putting personal information at risk. The breach has emphasized the importance of promptly patching outdated software, as Blackbaud’s failure to do so allowed the hackers to go undetected for an extended period.

Reforming Cybersecurity Practices:

As part of the settlement, Blackbaud has agreed to implement stronger password policies, conduct regular security assessments, and promptly patch software vulnerabilities. The company has also pledged to improve its data retention policies by quickly deleting unnecessary customer information.

Controversy Over Ransom Payment:

The settlement has also addressed the issue of Blackbaud paying the attackers’ ransom of about $250,000. While the company may have believed this would prevent further harm, critics argue that it sets a dangerous precedent and encourages future cybercriminals.

The Importance of FTC Involvement:

The FTC’s involvement in holding Blackbaud accountable sends a clear message to companies that negligence in protecting customer data will not be tolerated. It emphasizes the need for strong security protocols, including multi-factor authentication, encryption of sensitive data, and prompt patching of vulnerabilities. Transparency and timely disclosure in the event of a breach are also crucial for maintaining customer trust.

Lessons Learned:

The Blackbaud breach serves as a warning for organizations that fail to prioritize cybersecurity. It highlights the importance of investing in strong security infrastructure to protect customer data. As consumers become more aware of the risks associated with data breaches, they expect companies to handle their personal information with care.

Cybersecurity as a Moral Imperative:

In a digital world where cyberattacks are a significant threat, companies must recognize that cybersecurity is not just a responsibility but a crucial part of their reputation and longevity. The Blackbaud settlement reminds us that protecting customer data is not only a legal obligation but a moral imperative.


The landmark settlement between Blackbaud and the FTC over the data breach demonstrates the consequences of inadequate security protocols and delayed response. It emphasizes the need for companies to prioritize cybersecurity, including multi-factor authentication, encryption, and prompt patching of vulnerabilities. The incident should serve as a wake-up call for organizations to invest in strong security infrastructure and handle customer data with care. Ultimately, the Blackbaud settlement sets a precedent for holding companies accountable and reinforces the importance of protecting customer data in our increasingly digital world.