European Union proposals to reform data protection rules could have "potentially disastrous implications" for charity fundraising, according to a new report.
The existing rules allow charities to contact donors by direct mail or on the telephone unless they opt out. The EU proposals, which were first published in 2012, would require people to give their consent before an organisation could contact them for marketing purposes. This would mean that individuals would have to give their explicit consent before they could be contacted through direct mail or on the telephone.
A new report from the fundraising agency Medialab warns that the proposals could have a significant effect on charities’ fundraising activities.
"Fundraising depends on big numbers and economies of scale; by generating enough new donors, the cost of finding and keeping each one gets small enough to make donor recruitment profitable," it says. "Regular giving recruitment, lotteries and mass participation events are classic examples. The current direct mail opt-out law is one of the reasons why the amount of data available for mail is so high. But the third-party list rental market, still a huge source of new donors for dozens of charities, could face a loss of up to 50 per cent in numbers.
"Unless consumers have opted in for their name and address to be shared on a third-party list, then they won’t be available for any charity to approach."
Stephen Pidgeon, a director of Medialab, is quoted in the report saying: "If the EU introduces compulsory ‘opt-ins’ for direct mail, then the cold-mailing lists that still drive minor donor fundraising will disappear and, with them, millions of pounds."
The report does point out, however, that those who do opt in would likely be more responsive to donation requests.
The Institute of Fundraising last year warned that the changes could have "devastating" effects for charity fundraising.
It called for a "soft opt-in" extension to the definition of explicit consent that would allow charities to count an individual’s donation as a form of affirmative action.
The European Commission responded to the IoF’s call last year by saying that its concerns were unfounded and that it had misinterpreted the proposals.