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 ([email protected]) 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: [email protected] (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" ([email protected]) (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: [email protected] (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: [email protected] (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