Time to act on EU data opt-in threat

From the tidal wave of data created by new technology to the choppy waters faced by fundraising teams during the recession, a maelstrom of change has affected the third sector in recent years. But those testing times may prove just a prelude to more upheaval as wide-ranging legislative issues appear on the horizon.

The nascent laws in question are the new EU data legislation proposals currently being discussed by European ministers. Although the waters remain muddy at this time, there are concerns about the impact the new policies – potentially written into the statute books by spring 2015 – could have on charities in the UK and across the Continent.

Debate currently surrounds the treatment of on- and offline data and specifically how to regulate it. Meanwhile, interested UK organisations – among them the Institute of Fundraising and Direct Marketing Association – are lobbying our government hard to push for the law to be written as a Directive rather than a Regulation. The former would allow a certain amount of flexibility for EU member states’ policymakers to interpret and adapt the new data laws before writing them into statute, while the latter would more or less force a blanket policy on all nations, to be enforced to the letter (albeit with a possible two-year implementation period at country level to ensure a smooth transition).
As an agency dealing on a daily basis with charities’ data and communications strategies, it’s clear that there is uncertainty in the third sector about what the forthcoming strictures – whatever form they take – might mean for fundraising and donor engagement.

One concern that stands out for me is around opt-in versus opt-out. Currently, individuals have to opt out of direct mail communications from charities. This has allowed some organisations to maintain a high level of postal targeting as part of their overall marketing efforts, which is a good thing as response rates have largely remained impressive compared to other channels. But were a statutory opt-in for data collection and use rubber stamped (as is already in place for many forms of digital marketing), there could be consequences for fundraising overall. It’s much harder to get people to opt in, so I can see postal databases dwindling and this vital part of donor communication shrinking. That could have a drastic effect on money coming into charity coffers.

Moreover, some organisations are more reliant on direct mail than others. For example, our client The Salvation Army generates in excess of £1.2m annually from its cold direct mail activity and the new legislation has the potential to put this income at risk. Alex Wood, the charity’s head of individual giving, believes the EU data legislation “has the potential to limit our ability to raise large sums for the Salvation Army and in turn recruit a significant number of new donors to our supporter programme”. She adds that the effect of any regulation that would limit and minimise the use of data would impact the thousands of people the charity helps in the UK on a daily basis.

Ironically, any law that slashes the use of data for direct mailings may necessitate an increase in untargeted communications such as door-drops, which given the focus on personalised communication and recycling targets across Europe would surely not be a good outcome.
Ultimately, there could be a sizeable impact on charities in terms of how they engage their donors, but also on the ease of how supporters are able to hear from and communicate with their favourite organisations.

Although this debate has been raging for several years already, and has now passed from one European Data Commissioner to the next, now is the time to think seriously about how your organisation could be affected as early as next year. As a business with a keen interest in the new laws, we continue to lobby our MEPs to influence the decision to the benefit of the industry as a whole. We are urging our clients, partners and the sector at large to join the discussion and quantify the potentially detrimental impact this legislation could have on charitable giving.

The time for apathy has passed. Of course we all want to collect and use data responsibly – that’s never been any different – but we also need to ensure that there is a healthy pool of donors available to help good causes stay afloat and carry on doing great things.