Rules of engagement

January 2010

Data protection and communications regulations are just as applicable to charities as other organisations. James Milligan explains the requirements

There is a common assumption among charities that they enjoy the goodwill of the general public by virtue of the work they do. Whilst this is a reasonable assumption, new research published by the DMA has revealed this public goodwill does not necessarily extend to looking positively upon receiving unsolicited donor requests or general awareness marketing material. The DMA’s 2009 Marketing-GAP study, which polled a panel of 1,400 consumers, showed that just 21 per cent are happy to receive direct mail about charities; 18 per cent accept receiving emails; 1 per cent are willing to entertain telephone appeals; and 100 per cent indicated that they do not like receiving mobile contact from charities [1].

The message from the research is therefore clear: people do not view charity communications any differently from any other direct marketing contact. If they are not interested in what appears in their inbox or on their doormat, then it is likely to be discarded. The money spent on producing the communication is wasted, and a potential future donor is left with a negative view of the charity. Charity fundraising in this respect is little different from direct marketing. Targeting the right person, at the right time, with the right offer is at the core of best practice in direct marketing. However, fundraising bears one more similarity with direct marketing that charities unfortunately frequently overlook, and that is the fact they are both subject to the same regulations.

The regulator

The Information Commissioner’s Office (ICO) regards direct marketing as the promotion of an organisation’s aims and ideals – not just the promotion of goods and services. Therefore, soliciting new donors/volunteers and asking existing donors to increase their donation, or contacting individuals who have donated in the past, all fall within the definition of direct marketing. As such, the regulations to which fundraisers are subject are set out in the Data Protection Act 1998 and the Privacy & Electronic Communications Regulations 2003. Both protect individuals from unsolicited intrusion, but they also serve to maintain the integrity of both direct marketing and fundraising.

Data collection

Before even reaching the campaign stage, charities must follow a clear set of procedures to ensure that the personal data they have collected on donors and volunteers has been obtained legally.

From the start, the donor/volunteer must be informed of the name of the charity for which their personal details are being collected. The individual must also be informed of the purposes for which their information is being collected. There is no need for the charity to state that the personal information is being used to process the donation, or the application to become a volunteer, but the charity will need to state if it is going to use the personal information for future marketing activities.

Charities have to offer donors/volunteers the appropriate opt-out or opt-in from future marketing, depending on the channel that it wishes to use for direct marketing purposes. If a charity is marketing by post or voice telephony – both of which are opt-out – then the charity can either use an opt-out tick box or provide an address to where donors/volunteers can write in. The advantage of using the tick-box on the data collection form is that each opt-out request does not have to be acknowledged individually. If the charity just provides an address to where donors/volunteers have to write to unsubscribe from further marketing, then each request has to be acknowledged individually.

If charities intend to pass the donors’/ volunteers’ personal information on to a third party, such as another charity for marketing purposes, then the charity has to offer the individual the appropriate opt-out or opt-in option. This depends on what contact details the charity wants to pass on to third parties for their use in marketing purposes. However, any organisation to which a charity is outsourcing any activity, for example mailing house, contact centres, email bureau, is not counted as a third party, provided that there is an appropriate written out-sourcing agreement in place.

The regulations, marketing channel by channel

The rules and regulations in the Data Protection Act 1998 and the Privacy & Electronic Communications Regulations 2003 set out the acceptable terms of engagement with donors/volunteers via direct mail, telephony and email marketing communications. However, the regulations can and do vary greatly from channel to channel.

Postal

For charities, direct mail is an opt-out channel, so such organisations can contact any person unless they have told the charity that they do not want to receive unsolicited direct marketing mail. There are two ways an individual can do this; either by telling the individual charity that they do not want to receive any unsolicited marketing communications from it, or by registering with the Mailing Preference Service (MPS) [2] . Before sending out any unsolicited communication soliciting donations from prospective donors, a charity must run their lists against both its own in-house ‘do not mail list’ and the Mailing Preference Service list.

The MPS is run by the Direct Marketing Association. It is a list of individuals who have indicated that they do not want to receive unsolicited marketing communications by mail. This includes soliciting donations from prospective donors. Use of the MPS is a requirement under the Committee of Advertising Practice (CAP) Code of Practice [3] and therefore it applies to all charities, not just those who are members of the DMA. The list must be screened against the up-to-date file of the MPS no earlier than 90 days before use.

There is no need for a charity to screen its list of existing donors/volunteers against the MPS, provided that it has offered them the opportunity to opt-out from receiving further marketing communications. If the charity is just sending out a service communication to donors, for example a thank you letter or a confirmation of direct debit, then it can send such communications to all donors, regardless of whether they have opted out of marketing communications or are registered on the MPS. However, the service communication must not contain any solicitation for further donations.

If the charity wants to pass the postal contact details on to third parties, then the charity must notify the donor and offer an opt-out. The third party who wants to use the list will have to screen it against the MPS, as it cannot take advantage of the existing donor exemption. It will also have to screen against its own in-house ‘do not mail list’ to ensure that it does not send any mail to individuals who have previously said that they do not want to be contacted by that charity via mail. The above will also apply to a charity when buying in third-party data.

Voice telephony

The rules for voice telephone marketing are similar to those for direct mail, except that the use of the Telephone Preference Service (TPS) and the Corporate Telephone Preference Service is a legal requirement. A charity about to embark on a telemarketing campaign must screen its list of numbers against the TPS no earlier than 28 days before the date of the call. The TPS file is made available in the same variety of ways as the MPS file to make it easy for organisations to comply with the law.

Many individuals find telemarketing to be one of the most intrusive direct marketing channels. Individuals are disturbed when the telephone rings and they feel they have to answer it. There are now over 15m numbers registered on the TPS. The ICO has taken enforcement action against organisations that do not screen their lists against the TPS and/or their in-house ‘do not call’ lists. It is important, therefore, that charities do comply with the requirements, otherwise they run the risk of annoying potential donors, and/or running the risk of enforcement action by the ICO.

Charities can contact their existing donors, even if their number is registered on the TPS, provided all of the following conditions
are met:

The donor has provided their telephone number directly to the charity. If a charity does carry out a telephone appending exercise, then it will have to screen the list of appended numbers against the TPS and not call those numbers that are registered on the TPS. Appending telephone numbers means that an individual could be contacted through a communication channel they were not expecting, which could result in the donor withdrawing their support for the charity.
The donor was told that the charity would use the number for telemarketing purposes.
The donor was provided with an opportunity to opt-out and did not take advantage of the opportunity.

These rules also apply to voice calls made to mobile telephones. Many people nowadays give their mobile number as their contact telephone number. Charities need to be aware when calling a donor on a mobile number that the donor may be in a public place and may therefore not feel comfortable about broadcasting details of their bank account to those in hearing range of them.

If a charity wants to pass a donor’s telephone contact details on to third parties, then the charity must tell the donor and offer an opt-out. The third party who wants to use the list will have to screen it against the TPS, as it cannot take advantage of the existing donor exemption. It will also have to screen against its own in-house ‘do not call list’ to ensure that it does not call any individuals who have previously said that they do not want to be contacted by that charity by phone.

Electronic mail marketing

For a charity to communicate with a donor via email, text picture and video marketing, it must obtain consent from the individual. Charities cannot take advantage of the existing customer exemption (soft opt-in), which permits email marketing if the customer has been offered the opportunity to opt-out, because they are not selling goods or services to their donors. The trading arm of a chariy, however, can take advantage of this exemption. A donor must signify their consent to receive marketing by email by doing something positive, such as giving their email address or mobile phone number having been told the consequences of providing it, or by ticking an opt-in box. Pre-ticked opt-in boxes do not meet this requirement.

A charity cannot conceal its identity, so the name of the charity must appear as the sender of the email in the recipient’s inbox. If the charity is using an outsourced broadcast bureau to send out the message, then it must be the charity’s name that appears and not the name of the broadcast bureau. The charity must also provide a valid address to which the recipient can send an opt-out request.

If a charity wants to pass the electronic mail contact details of a donor on to third parties, then the charity must tell the donor and offer an opt-in. The charity will also have to specify the general types of organisation it will pass the electronic mail contact details on to. It will also have to screen against its own in-house ‘do not email list’ to ensure that it does not send emails to individuals who have previously said that they do not want to be contacted by that charity via that medium.

Getting it right

Working within the regulations can prove to be restrictive in some ways, such as when running donor acquisition campaigns. However, following them is not only a legal requirement but also a guarantee that a charity is engaging with its valued supporters in a way that they find amenable.

As the results of the DMA’s 2009 Marketing GAP report indicate, consumers dislike receiving unsolicited charitable marketing communications, regardless of whether it comes from a charity or a commercial organisation. Ignorance of the rules is no excuse for transgressing the rules in the eyes of regulators, and especially in the eyes of donors.

[1] www.dma.org.uk/information/res-introduction.asp
[2] www.mpsonline.org.uk
[3] www.asa.org.uk/asa/codes/cap_code

Author: James Milligan

James Milligan is a solicitor and advises Direct Marketing Association (DMA) members on data protection, e-commerce and financial services legislative issues.

www.dma.org.uk

Click here for other articles written by James Milligan

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