Digital Explainer – Why are non-profits restricted in their e-comms?

In a series of articles, IP partner James Tumbridge explains digital issues. To read his previous article on whether a Meta pixel is a cookie, click here.

Digital tools are remarkable time-savers. They can also greatly assist with targeted marketing and communications in a time-efficient way, but did you know the law on this is not even-handed? If you are commercially focused you have more flexibility than a non-profit.

Direct marketing communications

The issue is with direct marketing communications. By the early 2000s the European Union (EU) was concerned about the Internet, describing it as “overturning traditional market structures by providing a common, global infrastructure for the delivery of a wide range of electronic communications services. Publicly available electronic communications services over the Internet open new possibilities for users but also new risks for their personal data and privacy.”

In addition, during the 1990s and early 2000s there was great irritation with unsolicited faxes, calls and, later, spam emails. The response to this scourge was a new law from the EU, the Privacy and Electronic Communications (EC Directive) Regulations 2003 (PECR). Unfortunately, the interpretation of it by the UK regulator (the Information Commissioner) was to conclude that non-profit entities are distinct to for-profit entities under the law. It may have been an unintended distinction, but it remains the law.

The issue became set in stone due to a need to address a problem where people in Scotland were complaining. It arose from pre-recorded telephone calls linked to the 2005 election, where the Scottish National Party had Sir Sean Connery urge people to vote for them. The desire to stop those annoying robo-called recordings led to enforcement action and in time injunctions against several political parties. Their non-commercial, non-profit status became a key factor, and it has a long consequence on charities, campaigners and political engagement through to today.

The law aimed to preclude unsolicited direct marketing communication by a digital means like email or text. It has been reasonably successful, and is the basis of many fines and actions by the UK Information Commissioner, but it disproportionally harms not-for-profit entities. The exception for commercial entities means that someone sending a marketing communication does not need the prior consent where they obtained the contact details during a sale or negotiations for the sale of a product or services. This leads to a focus on the commercial selling part, but sadly little focus on the meaning of ‘marketing’. This exception to the general consent requirement is often called the soft opt in – a term that does not exist in the law, and not a term we advise relying on.

The issue, then, is that a non-profit organisation, which does not have a commercial focus, gets told it cannot rely on this exemption, and finds it cannot communicate with potential donors or those interested in its activities, unless it has prior consent to contact the person. The Information Commissioner has said that promotional communications sent by such non-profits do constitute marketing (and the Information Tribunal upheld this approach in 2006 following the Scottish National Party use of the pre-recorded message from Sean Connery).

The PECR is an EU law that the UK can depart from. The last UK Government was going to amend the law in the Data Protection and Digital Information Bill, but the election meant it never became law. The proposal to address this issue was to clarify the meaning of direct marketing so it was clear that use of a recipient’s address solely for the purpose of furthering a charitable, political or other non-commercial objective of the sender was permitted. There is the potential for this to be brought into law by the new Government, and we are watching to see if this is an adopted proposal. In the meantime, if you want to communicate and you are a non-profit, you need to take careful advice on how to do so lawfully.

If you are a non-profit and have questions or concerns about direct email marketing, please contact James Tumbridge.