Will new EU rules make life harder for charities?
- New European Union regulations regarding data protection could mean drastic changes for charities
- The legislation could also affect how charities manage their marketing campaigns and their contact with potential donors
- Charities need to address the issues now, to put themselves ahead of competitors when the legislation is implemented
Many of the traditional fundraising strategies used by charities are under threat from new European laws on how organisations can use consumers’ personal data.
The existing EU Data Protection Directive is almost 20 years old, and is currently undergoing a complete overhaul. Nobody doubts the need to bring the legislation up to date, but many in the charity sector fear it will hamstring their future fundraising efforts.
The European Commission published the initial draft of the proposed legislation back in 2012, and the final version is still under negotiation. Given the pace of the political process it is unlikely the legislation will be implemented before 2017, but charities should not wait until then to get on top of the potential changes.
1. Opting in
There are four areas of particular concern. The first is the proposed idea that consumers must ‘opt-in’ to receive all types of contact, including direct mail. At the moment the ‘opt-in’ requirement only exists for text and email communications, and extending it to all forms of contact would make it difficult to target existing, previous or potential supporters without their explicit consent.
At a stroke, this could massively reduce the reach of an organisation and decimate the number of people its campaigns contact.
2. Secure profiling permission
The second area of concern is around the proposed need to secure permission to use an individual’s data for profiling purposes. Without such prior permission, charities would struggle to create targeted marketing campaigns, making it more awkward to shape fundraising messages that meet individual concerns and priorities.
3. IP address classed as personal information
The third potential issue relates to the reclassification of an internet user’s IP address as personal information, and if this goes ahead charities would again need to secure explicit consent from consumers to track their IP address.
This would hamper the use of digital analytics and profiling, making it more difficult to pinpoint potential donors. At a time when such profiling is becoming more sophisticated, this would be a step backwards for the fundraising sector.
4. Permanent deletion
Finally, there is a growing worry that people will be given the right to demand the permanent deletion of their information from a charity’s database. As things stand, an individual can request their information is not used for marketing purposes. Charities maintain a list of these people to cross reference against new marketing databases and prevent them from contacting people who have already asked not to receive information.
If charities were not allowed to keep such lists it would become very difficult to avoid sending unwanted marketing material from new campaigns to people who had already opted out. This would waste money, create frustration and weaken the chances of that individual re-engaging with the organisation at a later date.
Although the finer details of the legislation remain vague, their direction of travel is abundantly clear. Personal data is a precious commodity and future rules will give people more control over those who can access it and the way they can use it.
Those who do not abide by the new rules will be hit by potential fines ranging all the way up to €100m or 5% of the offending organisation’s turnover.
Where charities use personal data without the appropriate consent, it will open the door to compensation claims that will be relatively simple to determine if the charity cannot present the required proof of permission for the way it has used personal data.
The move towards tighter controls on personal data is not a bad thing, and it is essential that personal liberties are upheld and safeguarded in today’s fast-evolving technological environment. But it does mean that charities need to start thinking about refreshing their own fundraising strategies.
Need to be pro-active
There was a lot of consternation back in 2011 when websites had to actively ask visitors to accept the use of tracking cookies, but ultimately it proved easier to incorporate into working practices than many expected, and it makes little, if any, difference to people’s browsing habits.
The new rules on personal data protection will be far more sweeping, but the challenge for charities is to work with them and develop compliant fundraising strategies as soon as possible.
This will give them time to analyse the potential impact on their current activities and design new approaches ahead of the incoming legislation. Additionally, it will create a competitive advantage over competing organisations and underpin stronger relationships with supporters for the future.