Recently in the UK there were fines imposed by the Information Commissioner’s Office on two prominent charities. This raised the issue of charities and privacy of donor information.
Essentially there were three concerns raised.
1) Screening donors for wealth and lifestyle by a third party;
2) Tracing and targeting new or lapsed donors “by piecing together personal information obtained from other sources.”
3) Trading personal details with other charities to create “a massive pool of donor data for sale.”
Why would a charity want to screen donors for wealth? Well it is pretty obvious that from a fundraising perspective it is not ideal to ask a millionaire for $5 or to ask a middle class person for a million dollar gift. Existing donors are probably the people most likely to support your charity. You want to make appropriate asks of donors. You want to find updated mailing information for a person who has moved. It appears that these charities wanted to ensure that they were doing appropriate asks. This can result in more efficient and effective fundraising. After all one of the concerns professed by the public is high fundraising costs.
Apparently the privacy policies of the charities did not mention these activities. Most people probably never would have guessed that charities would use their data in this way.
Charities must respect the reasonable privacy expectations of donors. Some privacy policies promise too much and really create potential problems for charities. Many charities have privacy policies in which they assure the public that the information they collect will be used for narrow purposes and in some cases never shared. Many of these privacy policies are awful cut and paste jobs were little consideration is given to the impact of the policies and on what might be one of most valuable asset many charities have – their donor list.
As is often the case the fines imposed were tiny in comparison to the reputational harm to these charities and the charity sector in the UK.
Unfortunately this particular incident is one of many that have resulted in UK charities having some very bad years in terms of fundraising and reputation. It should be the Canadian charity sector's main priority to try and avoid a similar fate here in Canada. Too much effort has been made to "modernize" charity law - rather than ensuring that the most abusive behaviour in Canada is eliminated.
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.