Data residency means the place where your data is physically stored and processed, such as the EU or the US. When you type a donor list into an AI tool, that text goes to a computer somewhere in the world. Data residency answers the question “which country or region is that computer in?” It is a bit like asking a storage company which city your boxes will sit in.
Why it matters
Some laws and some funders require certain data to stay inside a particular country or region. If your organization has to follow rules like the GDPR, or a grant agreement that names a location, the place where an AI tool keeps your data can matter a great deal. Some AI vendors let paying customers pick a region, while others do not say where data ends up at all. Before you put sensitive information into a tool, ask the vendor in writing where your data is stored and processed, and whether you can choose. If they cannot give a clear answer, treat that as a warning sign. You can also ask whether they offer a data processing agreement, and compare options on our tools page.
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