Commentary

Close call with do-not-fax rules roils associations and nonprofits

Putnam Barber

President, The Evergreen State Society

Like telemarketing phone calls, unsolicited faxes drive some people to distraction. Since the Telephone Consumers Protection Act took effect in the early ‘90s, Congress and the FCC have been under continuous pressure to place tighter restrictions on these methods of marketing.

Earlier this year, the FCC set up a national “do not call” registration system to let people list their phones in a database that identifies numbers telemarketers must not call. The response from the public was far beyond anyone’s expectations. Nearly a million numbers were entered in the database, by phone and over the Internet, on the first day !

To register your phone numbers, free-of-charge, call 1-888-382-1222, or visit www.donotcall.gov. More than 40 million numbers are in the database now.

New Unsolicited Fax Rules  On June 18, the FCC issued an order changing the rules about unsolicited faxes. It was scheduled to take effect on August 25. The basic idea of the order was that anyone who wants to send a fax with a commercial message must have written permission from the recipient in advance. Costly penalties can be imposed, on a per fax basis, on anyone who sends commercial faxes without permission.

In adopting the rules, the FCC also made a big change in the way the unsolicited fax rules apply to nonprofit organizations. Under the prior rules, nonprofits enjoyed a blanket exemption from restrictions on sending faxes. Plus, the earlier rules had specified that anyone could send commercial faxes when a loosely defined “established business relationship” existed with the recipient. Associations reasonably assumed that dues-paying membership constituted an established business relationship. Charities made the same assumption about contributors and other stakeholders.

Further, at the same time, the FCC tightened the definition of an "established business relationship" (this change was made in connection with new rules about telephoning, but a footnote explains that it also applies to faxes).  Under the new, tighter, definition, an established business relationship expires after a set amount of time: 18 months after a transaction (for example, paying dues or a conference registration fee) and 3 months after an inquiry.

The FCC’s June order made no special provisions for nonprofits and eliminated entirely the exceptions for faxes based on the existence of a business relationship. Under the new rules, after August 25, 2003, it would have been a violation subject to fines and other penalties to fax a conference announcement, dues notice, or publications catalog to a member or supporter without having a signed permission form on file before the fax was sent.

(It’s important to note that advocacy and information faxes -- ones without any commercial content of any kind -- would not have been affected by the new rules at all.)

Nonprofit Organizations' Reaction  The American Society of Association Executives (ASAE) and hundreds of other nonprofits -- both associations and charities -- strenuously opposed the FCC’s order. ASAE filed two petitions with the Commission: one asked for an “emergency clarification” of the new rules, the other for a delay in the effective date.

FCC Response  On August 18, the FCC voted to change the effective date to January 1, 2005, for the requirement that any sender of a commercial fax have prior written consent from each recipient. The order changing that date emphasizes that only the date has been changed, that all the provisions of the June order still apply. ASAE’s press release announcing the success of the petition, though, reports that one benefit of the delay will be to allow continued discussions with the FCC about the scope and implementation of new do-not-fax rules. (The press release is online.)

Note that there are provisions of the June 18 order that have teeth, and can bite, even though the deadline for getting consent has been moved 16 months into the future.  In particular, the tighter definition of an "established business relationship" (discussed above) and the elimination of the blanket exemption for nonprofit organizations both become effective August 25, 2003.

Nonprofits of every sort can be grateful for the effective advocacy that led to the delay in implementation of the new requirement for prior written consent.   Anyone who used faxes for regular announcements of products or services to their stakeholders would have faced huge disruption and substantial unexpected costs in the effort to get the necessary consents on file by the August 2003 deadline.

But ASAE’s petition for “emergency clarification” asked the FCC to declare that “unsolicited facsimile communications are not prohibited when issued by tax exempt nonprofit organizations in pursuit of their recognized and authorized tax exempt nonprofit purposes.” (The text of the petition is online as a .pdf file.)

I don’t think this request for a blanket exemption is a good idea. Remember those hundreds of thousands of people who entered their phone numbers in the do-not-call registry in the first few hours after it came on line. People, some people, really really hate getting unsolicited announcements and offers. These people don’t care what the tax status of the sender or caller is. They just don’t want to be disturbed.

Sending announcements to strangers may identify people who welcome whatever it is the sender is offering. But only at the risk of bothering large numbers of people who don’t respond, annoying a few and enraging some. If for-profit businesses are forbidden to send unsolicited faxes (and it seems pretty clear that the rules about that are going to go into effect) then the only senders of unsolicited faxes will be nonprofits.

The revised “established business relationship” exemption seems to me to go plenty far enough. Associations should be able to send faxes to their members (and, for a reasonable period, past members) without special permission. Charities should not be barred from sending faxes to their donors and others who have signed up as supporters in familiar ways. Self-interest dictates that nonprofits should offer a reliable system of “opting out” to people in these categories; the FCC could put some heat under making sure that happens, if need be.

And, as the proposed regulations would provide, nonprofits should be able to obtain permission to send faxes when talking with people at trade fairs, rallies, performances, on satisfaction surveys for museums and education programs, and in all sorts of other ways. The people who don’t give such permission are just exactly the people everyone should want to avoid sending faxes to. Setting up the systems necessary to avoid corroding further the public’s confidence in nonprofits just seems worth it to me.

What Now?  The next few months offer time for careful consideration of how to respond to the pressure from people who just don’t want to find unexpected stuff in the out-basket on their fax machines, no matter who it comes from, no matter what it says. In contrast, the relationships nonprofits nurture with members, donors and supporters are just the sort of strong, established connections that make faxes (and other communications) welcome. For the minority of stakeholders who don’t want to get faxes, an opt-out system is not only a good idea, it’s a survival strategy for the associations and charities who interact with them. Explaining this to the FCC should not be difficult. Mobilizing actual members, donors and supporters to join in the discussion can help enormously; there are many constituents who depend on fax communications from associations and charities, who look forward to them and who will want to continue to receive them.

But tempting as it is, nonprofits should not claim a blanket exemption from the rules. Nonprofits have strong reasons for preserving public confidence in their work and their methods. Unsolicited faxes, unwelcome communications, chip away at that confidence. Rules that prevent everyone from sending out such messages protect everyone from the damage they do. Surely a way can be found to draft rules that will allow nonprofits to continue their important work without permitting irresponsibly intrusive communications from strangers.

August 26, 2003

For more information about the FCC rules and the American Society of Association Executive’s response, see the handout materials for the meeting ASAE hosted on July 23, 2003, in Washington, DC. The online .pdf file includes ASAE’s analysis of the new rules, a model consent form, the text of the new rules and links to other FCC documents. The information provided by the National Council of Nonprofit Associations (http://www.ncna.org) and OMBWatch (http://www.ombwatch.org) was of great help in preparing this commentary.

Your Reaction?  Let us know what you think about how nonprofits should view the new and proposed rules. Send a Letter to the Editor or write Putnam Barber directly.

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