August 31, 2014


Can donors expect privacy?

Terrie Temkin, a nonprofit management consultant and former Miami Herald columnist, weighs in on donor-information privacy policies.

Q: We are hearing a lot about organizations issuing privacy statements.

For instance, some nonprofits have a disclaimer on all correspondence stating that donor contact information will not be shared or sold. Working with an animal-welfare group, where many similar groups profit from sharing names, we're curious what your opinion is on this topic.

A:  Your question highlights two competing realities in today's world. The sale, rental or exchange of names is big business.

Yet, more and more, people are wearying of the loss of control over their personal information. They are demanding that those with whom they do business, including charities, treat such information with respect and protect it from unauthorized use.

Historically, selling, renting or trading one's mailing list had little downside for nonprofits. The only legal restriction - set by federal law in 1999 - was that any such transaction could not result in partisan or political benefit.

Revenue from the sale or rental of donor lists, and the increased contributions resulting from use of for-profit telemarketers, often provided a clearly measurable increase to a nonprofit's bottom line.

Increased contributions are usually at the heart of a nonprofit's decision to provide donor names to for-profit telemarketing firms.

While such firms generally keep up to 85 percent of all contributions raised as a result of their calls, the remaining 15 percent goes to the charity and is often perceived as significantly more than the charity would have raised otherwise.

In this way, even donors who made minimal contributions to an organization actually had much greater value as a marketable commodity.

And studies showed that people rarely reduced contributions to the charities on their original list in order to respond to appeals from new organizations.

Instead, they found new money with which to respond, though this may be changing as the trend shifts to supporting fewer charities with larger gifts.

As recently as 2004, the online watchdog Charity Navigator surveyed nearly 3500 charities.

Only 18 percent had privacy policies to protect their donors, while 7 percent said they either currently sold, rented or traded mailing lists, or had reserved the right to do so.

Nearly three quarters of those questioned did not reply to the survey.

Charity Navigator's executive director, Trent Stamp, drew the conclusion that a majority of those who did not respond probably engage in the practice of sharing names.

Today, many donors are clearly voicing displeasure at having their personal information made available to others without their consent.

In response, Charity Navigator and the Better Business Bureau now tell prospective donors whether charities have a written privacy policy and whether it is prominently displayed.

Groups like the Wise Giving Alliance recommend that donors use a unique spelling of their name on donations to different charities so they can identify which groups are betraying their trust.

Since you asked my opinion about this issue, I will weigh in with my feeling that privacy statements are all about transparency and good stewardship.

They provide a means by which you assure your donors that you value them, and by which you build trust. Both of these elements are essential to retaining donors long-term.

If you make the decision to share names - or think there is a possibility that you will choose to do so in the future - be upfront about it and make it easy for donors to opt out.

What should your organization's privacy policy include? The Better Business Bureau suggests providing the answers to the following questions:

  • What information is collected about each donor?
  • How it is used; does the organization, for example, ever physically do mailings for another organization as a means of renting out its names without losing control over them?
  • How can the donor review the information the organization has on file and make any desired changes?
  • How can the donor opt out of having his or her name shared?
  • And what security measures has the organization adopted to protect its donors' personal information?

Terrie Temkin is founding partner at the Miami, Fla.-based management consulting group CoreStrategies for Nonprofits Inc. For five years, her "On Nonprofits" column appeared biweekly in the Miami Herald.


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