Privacy Proposals Would Cost Charities Billions, Report Says

Charities in the United States could face billions of dollars in lost revenue and increased expenses each year if state laws are changed to require organizations to get explicit permission from individuals before sharing their addresses and other information with nonprofit groups or businesses, according to a new report by the Direct Marketing Association and the Privacy Leadership Initiative.

Currently, many businesses and nonprofit groups allow people to request that their personal information not be shared with other organizations or data-collection companies. But more stringent “opt in” policies, which require organizations to obtain permission from individuals before sharing information on them, have been proposed by some states in recent years.

The report, based on data from 15 health and social-services groups, examines how charity fund raising would be affected if all companies and charities were required to comply with opt-in restrictions.

The report estimates that if opt-in rules were in place nationwide, U.S. charities would have to spend an additional $10-billion each year to maintain previous levels of revenue from direct-mail and telephone solicitations, and would lose $6.5-billion in annual revenue from fund-raising appeals, because it would be more expensive for charities to reach potential donors.

The report is available free on the Internet at http://www.understandingprivacy.org.