The Institute of Fundraising’s ban on charities selling supporters’ data and on sharing data without consent from donors within the six months before they do so is likely have a significant effect on the ability of smaller charities to use direct mail effectively, the head of the direct marketing agency DM Focus has said.
Adrian Williams, managing director of the agency, which helps charities to buy and share donor lists, told Third Sector today that the IoF’s recent announcement that it would change the Code of Fundraising Practice so that charities could no longer sell data or share it without valid consent had taken him by surprise.
"The way the IoF has gone about it is retrospective," he said, referring to the IoF’s endorsement of the Information Commissioner’s direct marketing guidance on third-party consent. "I never thought that would happen. It never has before; they have stepped into a very dangerous position because this recommendation goes above and beyond the Data Protection Act."
The ICO’s guidance says that if an organisation is making contact by phone, text or email for the first time, it should not rely on any indirect consent given more than six months ago.
Williams said this meant that there would be no grace period for charities in which they could use data they had gathered more than six months before.
"The selling and swapping of data has massive implications for the sector," said Williams. "If this change goes through, it would have a massive impact on smaller charities that rely on purchasing charity data to get direct mail to work. Many charities are not too sure where to go."
Williams, who also spoke to Third Sector before the IoF’s announcement earlier this month, had previously said that an IoF prohibition on the sharing of donor lists without express consent would have an insignificant impact on data-sharing compared with the EU data protection laws that are expected to come into force in the next 12 months.
But today he said: "I think that this has a much larger impact than the EU rules, which might change. Many charities purchase data, so this announcement will have big consequences for them."
He said that reciprocal transactions – where charities swap lists using services such as the Reciprocate programme run by the list broker ResponseOne – would be "wiped off the agenda".
Williams, who recognised direct mail distributed by his company in photographs of Olive Cooke surrounded by charity mailings in the Daily Mail, estimated that almost two-thirds of charities that fundraised by direct mail bought lists of potential donors, about 10 per cent exchanged their donor lists with other charities and about 3 per cent sold or rented these lists to third parties.
Speaking to Third Sector in early September, he said that the EU regulations – which at their most extreme could forbid organisations from contacting, profiling and tracking an individual’s cookies online without their consent – would have a significant detrimental effect on the number of lists available as well as on fundraising income, which could cause some charities to close down.
He said such rules could lead to unscrupulous practices if marketers felt the legislation was too restrictive. "Some rogue organisations could say: I’m going to mail from India and get some 12-year-old boy to write my copy," he said.
Williams said that international development charities in particular would have good cause to post their direct mail from developing countries in order to circumvent EU or UK rules. "They wouldn’t need to worry about any legislation because they’re not writing from the UK," he said. "Most charities would adhere to the rules but you might find some wouldn’t.
"We shouldn’t apologise for what we’re doing. We’re doing it because it works, because it makes money and because it allows us to offer the services that the government doesn’t put onto the market."
He also questioned whether the public really found direct mail an irritation, saying they could just "chuck it on the fire" if they did not like it.
A spokesman for the IoF said that in order for fundraising to be successful and sustainable in the long-term all potential supporters needed to have confidence in how charities used their data.
"Moving towards sharing data where the individual has ‘opted in’ by giving informed consent will mean people feel more in control over the fundraising communications they receive," he said.
He said the Code of Fundraising Practice set standards for fundraising that went beyond minimum legal requirements. "This is one area where we need to raise the bar to ensure that fundraising practice meets the expectations of the public," he said. "We know that the Information Commissioner’s Office is to produce guidance on informed consent and the timescales of valid consent to help fundraisers understand how to manage data appropriately."
Read about how charities are reconsidering their data-sharing practices here.