The Donor Name Game

Use of lists by public broadcasters stirs debate on privacy protections

The Heritage Foundation, in Washington, doesn’t tell its 205,000 donors that it

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routinely shares their names with other organizations. In fact, this year the conservative think tank expects to earn $250,000 from the sale or rental of those names.

John Von Kannon, the Heritage vice-president who oversees fund raising for the organization, says his donors are savvy enough to know that their names are given to other charities and direct marketers — and that they realize they can let the organization know if they want their name removed from any list that is released.

Many Americans who didn’t realize how often charities share or rent donor lists probably know that now. In recent weeks, such list-sharing practices have gained widespread attention as Congress began investigating reports that more than two dozen public-broadcasting stations had given their donor lists to Democratic or Republican organizations.

Although charities legally are allowed to rent their mailing lists to or exchange them with a wide range of groups, including political parties, non-profit organizations have long been divided about appropriate uses of donors’ names and addresses. While some organizations won’t ever release their donors’ names, others say that making the lists available is an essential transaction that allows charities to find the people who are the most likely to give.

The controversy over public broadcasting has intensified the debate, especially as members of Congress, concerned about donors’ privacy, have suggested that they might enact restrictions on list sharing.

“More and more people are complaining about the fact that their names are given to other organizations without their permission,” says Ken Johnson, a spokesman for Rep. W. J. (Billy) Tauzin, the Louisiana Republican who is chairing the Congressional inquiry into public broadcasting’s list sharing.

Mr. Johnson says he expects that lawmakers will eventually take action that will affect how all non-profit groups share lists.

“It may not be this year, it may not be next year,” he says. “But I suspect, at some point down the line, that you’ll see Congress take some action which will allow people to opt out from having their names sold, loaned, or rented through brokers.”

Even before the debate over the list-sharing practices of public-broadcasting stations, some groups had been taking steps to demonstrate that they were serious about protecting donors’ privacy.

The Direct Marketing Association, which represents charities and companies, put a new rule into effect July 1 that required its members to notify customers and donors annually that their names might be shared with others. The new rules also require members to give people the option of taking their names off any mailing or phone list that will be released to other marketers.

Max L. Hart, chairman of the association’s non-profit council and director of fund raising for Disabled American Veterans, in Cold Spring, Ky., says he hopes that all charities will move quickly to take the same approach. He argues that in so doing, charities can head off federal legislation.

“If non-profits do not do this,” he says, “we run the risk of Congress jumping in and introducing legislation that would mandate that charities disclose [the release of names], the point size of the notice, and its positioning, and wording. It would be extremely detrimental.”

The Congressional inquiry into the sharing of donor lists began after a woman made a gift to Boston’s WGBH public-television station in the name of her 4-year-old son. Afterward, the woman complained, her son received a solicitation from the Democratic National Committee. More than two dozen other stations subsequently acknowledged that they had rented their donor lists to political parties or campaigns.

Although government regulations prohibit charities from becoming involved in partisan politics, legal experts generally agree that charities can share their donor lists with political parties as long as they don’t favor one party over another.

Public-broadcasting stations, however, are governed not only by those rules, but also by a federal charter that requires them to be fair and objective, and to steer clear of bias. Some members of Congress say it is those rules that the stations violated when they shared their lists with political parities.

But other observers say it is not the list sharing that is really at issue. They say critics of federal support for public broadcasting are hoping that by raising questions about bias, they will be able to reduce or eliminate the money that goes to the Corporation for Public Broadcasting.

“It’s being seized on by certain members of Congress as a political issue by right-wing opponents of [public broadcasting],” says Mal Warwick, chairman of a Berkeley, Cal., fund-raising consulting firm that bears his name.

The Corporation for Public Broadcasting, which channels federal aid to local broadcasting outlets, has insisted that public stations did not violate the law because they didn’t show any partisanship in making their lists available to political parties. But the corporation has condemned the practice and established new criteria for stations. Starting with money awarded for fiscal 2000, no radio or television station will be eligible for federal money unless it can prove that it does not give its list to political parties or candidates. The stations must also notify donors that they can take their name off any list that will be released.

Many non-profit leaders say the corporation’s move was needed to head off Congressional anger, though some wish that C.P.B. had been more vociferous in defending the legal right of charities to share lists with political organizations.

Mr. Von Kannon of the Heritage Foundation says it is legitimate to raise questions about the standards that public-broadcasting stations should be expected to follow. But he worries that Congress has failed to understand that charities’ list sharing is motivated by a desire to find donors and has little to do with political ideology. He says Heritage has allowed its list to be used by public-broadcasting stations, even though the think tank has publicly opposed federal aid to the stations.

“The purpose of direct-mail fund raising is just that,” he says. “It is to raise money.”

Some in the fund-raising world say the controversy over list sharing comes from lack of public knowledge about the steps non-profit groups take to protect their donors. Says Barbara M. Sims, vice-president of Carol Enters List Company, a list broker and management company in Fairfax, Va., “If people took the time to understand the industry, they would see everyone works so hard to keep everything straight and pure and clean.”

Professional list brokers such as Ms. Sims serve as intermediaries for charities that want to exchange or rent donor or customer lists. The lists can include names, addresses, telephone numbers, and details about the amount and frequency of donations or purchases. If two organizations have lists of similar size and value, the information often is exchanged. Otherwise, the lists may be rented, usually for between $75 and $100 for every 1,000 names. The list broker may work directly with the non-profit groups or with so-called list managers — firms that non-profit groups hire to manage their lists of contributors.

Charities say they take numerous steps to protect themselves and their donors from offensive or inappropriate appeals.

For example, they receive updates from the list broker to determine who is requesting their lists. In addition, they usually review any direct-mail appeals or telemarketing scripts before they are used to solicit their contributors.

Charities often refuse to give their lists to groups whose material they deem to be objectionable or inappropriate. Groups also sometimes will not share lists with competing organizations. Disabled American Veterans, for example, exchanges its list with many organizations — but not with other veterans’ groups.

Charities also “seed” their lists with names and addresses of people who work for the organization or who are closely connected to it. That enables non-profit groups to keep track of how a list is being used and if another organization has violated the terms of a rental or exchange agreement.

But even with such precautions, not all non-profit groups are comfortable with the idea of sharing the names of their contributors.

Focus on the Family, an evangelical organization in Colorado Springs, won’t release its list of donors to anyone.

“What’s driving us really is our own understanding of what’s fair and right for us,” says Paul Hetrick, the organization’s spokesman. “You don’t develop a good relationship with constituents by violating their trust, even in minor ways.”

Focus on the Family also tightly controls the manner in which new names are added to its donor list. Unlike some groups, it does not allow third parties to suggest additions to its list. For example, it has turned down ministers’ requests to add the names of their entire congregations.

“We’d rather have fewer names — of people who want to be on our list — than have an inflated or bloated list of people who would rather not receive our mailings,” Mr. Hetrick says.

Although it does not share its donor lists, Focus on the Family occasionally rents lists from other groups.

Kate Conover, vice-president of operations at the National Committee for Responsive Philanthropy, a watchdog group in Washington, says she considers it a double standard for charities to rent lists from others but not to give out their own.

“Everybody who won’t give me their list wants ours, and I find that infuriating,” she says. “When non-profit groups don’t give out their names, that hurts other non-profits around them. We’re all working for a better society, for the common good.”

Sherry Minton, who oversees direct-mail and other such efforts for the American Heart Association, says she is also bothered by the number of groups who seek lists, but won’t share them. She says if everyone took that approach, no one would be able to obtain outside lists and fund-raising costs would increase as a result.

Most of the organizations that set standards for charities’ fund-raising practices say that list sharing is acceptable but that they urge their members to notify donors that their names may be released.

Among those that encourage charities to offer donors such options are the Association of Direct Response Fundraising, the Council of Better Business Bureaus’ Philanthropic Advisory Service, and the Evangelical Council for Financial Accountability.

Although some charities are reluctant to notify donors about list sharing because, they say, it would make a direct-mail solicitation too confusing, Mr. Hart of Disabled American Veterans suspects the real reason is that charities don’t want too many people to withhold their names. That not only reduces the value of a group’s list, but adds to the administrative headaches for charities, which have to keep careful track of the people who have forbidden their names to be released.

Mr. Hart says his charity has been offering donors the option of keeping their names private since 1980. That year, he recalls, 18 per cent of donors said they didn’t want their names released.

Disabled American Veterans became concerned by those figures, largely because the shrinkage would reduce the value of the list for rental or exchange. Mr. Hart says the charity found a solution by changing the way it informed donors about the release of their names. Instead of putting into each appeal an insert that offered donors a way to keep their names private, the charity runs a statement in small print at the bottom of each letter. Now only about 302,000 of the charity’s eight million donors forbid the charity from releasing their names.

“We initially made it too easy for them,” Mr. Hart says. This year, the organization expects to raise about $2-million by renting out its mailing list.

Beth Givens, project director of the Privacy Rights Clearinghouse, in San Diego, says Mr. Hart, in reconfiguring his notice, “isn’t making a good-faith effort.” She says such notices should be displayed prominently and must be clearly worded.

Daniel Borochoff, president of the American Institute of Philanthropy, in Bethesda, Md., says the best policy for non-profit organizations is to withhold their donors’ names unless the donors give permission to rent or exchange them.

As part of its efforts to provide donors with advice about how to give effectively, the institute offers “fund-raising reduction cards” that people can send to a non-profit group along with their contributions. The card contains instructions that donors can check off, including one that directs the non-profit group not to share the donor’s name without first obtaining approval.

Paul D. Nelson, president of the Evangelical Council for Financial Accountability, which sets fund-raising and governance standards for religious groups, says that, at the very least, non-profit groups should never provide their donor lists to organizations or companies that have a focus different from their own.

“‘When contributors give a name to an organization,” he says, “they don’t expect that it’s going to get bounced all over, especially outside the charitable community.”