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Fundraising Not a Commercial Activity Under PIPEDA

Recently, the Privacy Commissioner of Canada, Jennifer Stoddart, released a fact sheet called 'The Application of the Personal Information Protection and Electronics Document Act to Charitable and Non-Profit Organizations'. This document reinforces the content of 'Privacy 101: A Guide to Privacy Legislation for Fundraising Professionals and Not-for-Profit Organizations in Canada' released in June 2003 by a working group of AFP, AHP, APRA and CCP representatives.

A few highlights of the new fact sheet from the Privacy Commissioner of Canada:

1. 'The presence of commercial activity is the most important consideration?' Privacy 101 urges fundraisers to assess activities through this 'commercial activity' filter to determine what specific activities may be covered by the Act.

2. 'Collecting membership fees, organizing club activities, compiling a list of members' names and addresses, mailing out newsletters are not considered commercial activities.' The Commissioner has reinforced the working group's position that many day-to-day activities carried out by nonprofits are not subject to the Act.

3. Most importantly, the Commissioner states, 'Similarly, fundraising is not a commercial activity.' This clarification that the act of fundraising itself does not constitute a commercial activity is important. The Commissioner goes on to describe in more detail the process of commercial activity related to lists, and the need to therefore seek appropriate consent if selling, bartering or leasing lists. However, it is clear that the act of asking for donations is not subject to the Act.

4. As expected, the Commissioner states, 'selling, bartering or leasing a membership list or a list of donors would be considered a commercial activity. As a result, consent is required for the disclosure of this information.' The steps outlined in the Privacy 101 Guide are reinforced again with the following statement from the Commissioner '?an organization could use a clear, simple and easy-to-execute opt-out process as a means of obtaining consent.' Fundraisers are encouraged to review the sample purpose and opt-out statements contained in the Privacy 101 Guide and to use these as recommended wherever list sharing is contemplated.

5. Finally, the Commissioner goes on to suggest what the working group itself has recommended as a best practice for fundraising organizations. 'We recommend that [charities, associations and other similar organizations] provide their members, donors or supporters with an opportunity to decline to receive further communications.'

You are encouraged to read the Privacy Commissioner of Canada's fact sheet in full for complete information.

What remains clear is that fundraising organizations that have implemented recommendations contained in the Privacy 101 Guide will be well on their way to compliance with the federal privacy legislation. While some of the recommendations are based on what might be called 'best practice' as opposed to actual compliance, it is clear that fundraising will be aligning themselves with the intent of PIPEDA by taking these steps now. Furthermore, charities will be in a position to assure donors that their personal information is treated with the highest respect and adherence to relevant privacy legislation.

Of course, as the Commissioner points out, 'some provinces have passed legislation similar to PIPEDA. Some of these laws apply to charities and other non-profit organizations.'

Alberta and British Columbia both have passed laws that they expect to be deemed 'substantially similar' by the Privacy Commissioner of Canada. This designation will mean that, except where 'the complaint is substantially about the crossing of inter-provincial boundaries, provincial legislation will be considered the relevant legislation for fundraisers to comply with in their handling of personal information. As of March 11, 2004, neither the Alberta nor the BC legislation had been deemed substantially similar and therefore PIPEDA continues to apply in addition to the provincial legislation.

For an update on provincial privacy developments, refer to the story on our website.

AFP thanks Susan Mullin, CFRE, Chair, AFP Privacy Task Force and Pearl Veenema, CFRE, Chair, AHP Canada Government Relations, for developing this update.

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