Privacy legislation would reach $9 billion in additional fund-raising expenses for nonprofit charitable organizations as restrictions on marketing data disproportionately affect organizations that provide human services, such as child care and care for veterans, according to a study released by the Direct Marketing Association.
The study revealed that a ban on the use of external marketing information–except for name, address and phone number–would force charitable organizations to spend an additional $8.8 billion per year just on fundraising.
Almost $60 billion was raised in 1998 (the latest figures available) in nonprofit donations from direct mail and telephone solicitations. That year about 30 cents was spent to raise each $1. Estimates simulated in the study found that organizations would be forced to spend upwards of 45 cents to achieve the same donation level.
“Severely restricting the use of marketing data will increase costs for every sector of the economy – and nonprofits are no exception,” said H. Robert Wientzen, CEO of The DMA. “Raising money for charities is difficult enough during a period of slowing economic growth, but with less access to marketing data, human service organizations will have significantly less to spend on improving the quality of life of their clients.”
The full study is scheduled to be released at The DMA’s 84th Annual Conference and Exhibition, to be held Oct. 27 through 31 in Chicago.
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