The Nonprofit FAQ

Can nonprofits use direct fax to fundraise?

NOTE 8/25/03:Today is the day the FCC had scheduled for the introduction of "do not fax" rules setting high penalties for "commercial" faxes sent without the recipient's express written consent to be faxed. The effective date has been postponed until 1/1/05 aften many questions were raised about the scope and details of the proposed rules. But the issue for nonprofits is not just about the legality of faxing strangers. The FCC proposed these rules in response to widespread anger at the misuse of fax numbers for marketing and promotion. The angry people don't weigh the tax-status of the sender when they react to unsolicited, unexpected faxes. Before sending fund-raising faxes to strangers, it would be good to consider the possible long-term negative effects for both the sending organization and nonprofits more generally. Further, the FCC rules do set some new limits. Here's what the INDEPENDENT SECTOR (http://www.independentsector.org) advised in a letter to its members: "The FCC's order notes that existing law remains in place. Currently, nonprofits and for-profit organizations must have either express permission from or an established business relationship with an individual before sending solicitations or advertisements by fax. This means that organizations may still be subject to legal action from individuals who receive unwanted fax solicitations if the organization cannot show that they had an 'established business relationship' with that individual. Organizations should establish clear procedures for handling complaints or threatened lawsuits from anyone who has received an unwanted fax solicitation. Be careful to determine the facts and the nature of a claim before responding to it. INDEPENDENT SECTOR will continue to work with the FCC to clarify the definition of 'established business relationship.'" The FCC decision to postpone the effective date of the rules is online at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-03-208A1.pdf Putnam Barber of The Evergreen State Society in Seattle, Washington, USA, posted a discussion of the do-not-fax rules with links to further information on the topic in the September 2003 issue of Observing Nonprofits. See http://www.tess.org/ON/0309_FAX.html. In soc.org.nonprofit, on 22 Mar 1996, Bill Krueger (kci101@aol.com) asked on the subject of fax solicitations: I'm curious about what comments the group might have regarding a mass solicitation - via fax - to businesses in a local community. Has anyone tried anything like this and how did it work? The background is simple: our local Food Bank is offered a truck load of nutritious green beans from a major U.S. corporation totally FREE ... except they have to pay $2,000 to pay the truck to deliver the green beans (worth over $50,000) from Georgia to Arizona. The food bank needs to have an answer with 48 hours. They have acquired a great list of 1800 small and medium size businesses and their fax numbers and have a way to send all of the faxes overnight to each of these businesses. The letter is one page and has a response form at the bottom where a business can "pledge" an amount and fax it back to the food bank. The food bank then sends a bill. In essence, a $100 donation will provide $2,500 worth of food to the community's poor. None of these businesses have ever given to the food bank before. Do you think it will work? Can they get a better response than their normal half to one percent on donor acquisition? How many will be upset for getting a fax solicitation? Curious what y'all think. Further correspondence on this subject: From: gravity@PEAK.ORG (Gravity Girl) (3/22/96) I think it will work if it is well-written and concise, because the need is so specific and time is of the essence. It is also an affordable amount for most businesses. My question is: How will the businesses who do participate be recognized publicly? They'll want to know this, too. Think of a fun way and include it in the solicitation. As for the faxing etiquette, I've seen fax solicitations work before. They were not considered tacky, if that's what you're wondering. In fact, they were considered useful, because they put facts in front of the person making the decision. However, they do *have* to be followed up by a phone call. The follow-up phone calls will undoubtedly increase your return immensely. Just call and say, Did you receive my fax, etc. . . . From: "Frank J. Mihm" (fmihm@mail.cruzio.com) (3/26/96): My first thought was that such a solicitation would be prohibited by the Telephone Consumer Protection Act, a Federal law. However, as I read the code it looks as though I was wrong. It appears that there is an *exclusion* in the code for tax exempt nonprofit organizations. The code says ". . . term does not include a call or message . . . by a tax exempt nonprofit organization." The full text of the code is available at: http://www.law.cornell.edu/uscode/47/227.html \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Quoted below is a part of 47 USC Sec 227 (1/24/94). \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ UNITED STATES CODE :: TITLE 47 - TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS :: CHAPTER 5 - WIRE OR RADIO COMMUNICATION :: SUBCHAPTER II - COMMON CARRIERS 227. Restrictions on use of telephone equipment a) Definitions As used in this section - (1) The term ''automatic telephone dialing system'' means equipment which has the capacity - (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers. (2) The term ''telephone facsimile machine'' means equipment which has the capacity (A) to transcribe text or images, or both, from paper into an electronic signal and to that signal over a regular telephone line, or (B) to transcribe text or images (or both) from an electronic signal received over a regular telephone line onto paper. (3) The term ''telephone solicitation'' means the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, goods, or services, which is transmitted to any person, but such term does not include a call or message (A) to any person with that person's prior express invitation or permission, (B) to any person with whom the caller has an established business relationship, or (C) by a tax exempt nonprofit organization. From: kci101@aol.com (KCI101) (3/26/96) Thought you all might like to know how the fax solicitation for the food bank turned out. You will recall the food bank had a free truck of green beans and needed $2,000 to have it trucked from Georgia to Arizona. The green beans were worth about $50,000. They sent a one-page fax to a list of 1,800 businesses asking for $$$$ to pay shipping. The business was to complete a simple form on the bottom of the letter and fax the letter back to the food bank with their commitment (no need for BRE's etc.). The food bank would then send a bill. The Response: Instead of being able to fax to 1,800 small and medium size businesses, the fax was able to be completed to only 850. Apparently, many small and medium size businesses haven't learned of dedicated lines so the receiving fax never picked up. So we were reduced to a "faxing list" of only 850. Of those 850 complete faxes, 55 donors responded with just over $2,800 - a response rate of 6.5% and an average gift of just over $50 per response. This compared very favorably with the food bank's usual response of less than 2% for donor acquisition mailings (average gift $35) and the cost to fax was less than a postage stamp (no printing, assembly, etc. charges either). The Food Banks gets it food. The negatives ... there was one "nasty" gram from a lawyer (wouldn't you know it - sure helped their image in our eyes) telling us it was illegal. Shows what he knows, non-profits are excluded from the law he (and several others on the list) stated. Of course I (and they) didn't know that when they did it - thanks for the tips. We did give an option for the business to check a box asking to be taken off the "fax list". Six so indicated. All in all, it is impossible to tell how many other businesses may have been upset, but they sure didn't share it with the food bank. I should note, before everyone rushes out to solicit via fax, several points ... 1. The Food Bank is truly loved in this community. Recent surveys showed over 90% name recognition and a similar positive response ... highest in the community. Therefore credibility was very high and this may, more than anything, account for the positive result. 2. I think it worked because, as many pointed out, of the urgency of the appeal. It was time sensitive, obviously within the mission of the food bank, and fairly simple. 3. I don't think they should (or will) do this over and over. But occasionally, as a donor acquisition vehicle in the right situation to the right constituency, this can be very effective. 4. A great idea was posted somewhere suggesting the food bank fax the results to everyone they sent the original fax to. I think that was the best idea heard. And thanks for all the great comments, supportive and not. It has been educational. Any thoughts or comments can be directed to: From: kci101@aol.com (KCI101) (3/27/96): Two reasons why a non-profit, as described in the now infamous food bank, can solicit businesses via fax. It still may not be a good idea, but it is NOT illegal. Telecommunications Law states: (1) The term ''automatic telephone dialing system'' means equipment which has the capacity - (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers. In other words what is excluded is random or sequential dialing - or those hated automatic dialers. In the food bank example, the numbers dialed were neither sequential nor random - it was a preprogrammed broadcast fax. If what the food bank proposed was illegal, then so would programming six printers you've never used into your fax and sending them an RFP without first calling to ask permission. The law further states: (3) The term ''telephone solicitation'' means the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, goods, or services, which is transmitted to any person, but such term does not include a call or message .... (C) by a tax exempt nonprofit organization. Clearly excludes charities. I'm no lawyer, but this has got to be one of the vaguest laws on the books. A good lawyer could drive a truck through it, but I think even a Los Angeles jury could be smart enough to see that it doesn't apply to the situation described. Thanks to Steve Mihms who provided me the text ... and posted it earlier on the newsgroup. William Krueger Information about do-not-fax rules added 8/22/03, 9/3/03 -- PB