Canada’s Anti-Spam legislation affects Charities

How does Canada's Anti-Spam legislation affect charitable raffles?

First of all, when it comes to legislation, nothing is easy.  The CASL (Canadian Anti-Spam Legislation) is no different.  There are plenty of rules and regulations surrounding this legislation, brought into effect July 1, 2014.  In fact, charities and non-profits have their own subsections or exclusions on some of these rules.   the new law will apply to such organizations and will have a significant impact on the way they conduct their donor and member communications.

What is CASL?

In very general terms, CASL prohibits the sending of unsolicited commercial electronic messages, which include text messages and e-mails, without receiving express or implied consent from the recipient.  It also prescribes form requirements for commercial electronic messages including a mandatory unsubscribe mechanism.

For charities and non-profit organizations, it is important to understand that the anti-spam provisions of CASL apply only to "commercial electronic messages" (CEMs).  These are transmissions that has a purpose of encouraging participation in a commercial activity.

There are three general requirements for sending a commercial electronic message (CEM) to an electronic address. You need (1) consent, (2) identification information and (3) an unsubscribe mechanism.

Consent for Charities

There are two types of consent express and implied consent.  Express consent can be obtained either in writing or orally. In either case, the onus is on the person who is sending the message to prove they have obtained consent to send the message.  Old age web marketing tricks of pre-checking boxes cannot be used as it assumes consent rather than collecting express consent.  Express consent must be obtained through an opt-in mechanism.  The end-user must take a positive action to indicate their consent.

Consent may be implied if there is an existing business relationship.  The person made a transaction, an inquiry, an application or a written contract for the purchase of products, goods or services.  For more information on consent goto crtc.

Many activities of charities and not-for-profit organizations will be considered to have commercial character and therefore e-mails encouraging participation in those activities will be commercial electronic messages.  This includes the buying and selling of products and gaming opportunities, such as home lottos or raffles.  Other fundraising activities where value is exchanged might also fall under this category, such as the carrying on of a related business by a charity, or fundraising dinners.

Although perhaps the majority of electronic messages sent by charities and not-for-profit organizations might be considered to be non commercial in nature, it would be best practice  to design systems to distinguish between contacts for whom a consent compliant with the anti-spam legislation has been obtained, and those where such a compliant consent has not been obtained.  This should ensure that the electronic messages regarding commercial activities are compliant.  This obviously is a burden for charities and not-for-profit organizations in terms designing their communication platform.

Tap50:50 has designed a communication marketing medium based on the above guidelines.  Our communication platform is  fully CASL compliant with regards to sending purchasers of our raffle tickets messages with regards to the raffle or charitable marketing messages.

Here endeth my writing of the blog.

I have copied and pasted from CRTC the charity section below with regards to rules of communication.  Again the complete guidelines can be found at crtc.

Registered Charities

Does section 6 of CASL apply to messages sent by non-profit organizations?

Yes, CASL applies to activities of non-profit organizations, such as sending commercial electronic messages (CEMs) and installing computer programs. However, there is an exemption under the Governor-in-Council Regulations for CEMs sent by or on behalf of a registered charity, as defined under the Income Tax Act, where the primary purpose of the CEMs is to raise funds for the charity.

Does section 6 of CASL apply to messages sent by registered charities?

Yes, section 6 of CASL applies to registered charities when sending commercial electronic messages (CEMs). However, there is an exemption under section 3(g) of the Governor-in-Council Regulations for CEMs sent by or on behalf of a registered charity, as defined under the Income Tax Act, where the primary purpose of the CEMs is to raise funds for the charity.

Given that legitimate messages sent by registered charities raising funds are exempt under the Act, the CRTC will focus on messages sent by those attempting to circumvent the rules under the guise of a registered charity.

When will a CEM sent by a registered charity be seen as having, as its “primary purpose”, the raising of funds for the charity?

The “primary purpose” of a CEM means the main reason or main purpose of the CEM. There could be a secondary or additional purpose to the message, but the principal purpose of the CEM must be to raise funds for the charity.

What are some examples where (a) raising funds is the primary purpose of a CEM? (b) raising funds is not the primary purpose of a CEM?
  1. Where the primary purpose is raising funds:Example 1: A CEM, sent by or on behalf of a charity, which promotes an event and/or the sale of tickets for an event – such as a dinner, golf tournament, theatrical production or concert or other fundraising event – where the proceeds from ticket sales flow to the registered charity.Example 2: A registered charity sends, by e-mail, a newsletter which provides information about the charity’s activities or an upcoming campaign, and does not contain any material that seeks to encourage the recipient to participate in a commercial activity, then the message would not be a CEM for the purpose of CASL.Example 3: A registered charity sends, by e-mail, a newsletter which provides information about the charity’s activities or an upcoming campaign, but which also contains a section which solicits donations and may also mention corporate sponsors who supported the charity (but does not encourage the recipient to participate in a commercial activity with that sponsor). While this message may be considered a CEM under CASL, the primary purpose of the message may be viewed as raising funds; therefore, the exemption in the GiC Regulations would apply.
  2. Where the primary purpose is not raising funds:Example: A registered charity sends, by e-mail, a newsletter which provides information about the charity’s activities or about a particular social issue. If this e-mail also advertizes the corporate sponsors of a charity’s event and encourages the recipient to participate in a commercial activity with that sponsor, then section 6 of the CASL may apply without any exemption. The primary purpose of the message may not be to raise funds for the charity.
Can registered charities rely on implied consent to send CEMs?

Yes, consent under CASL is implied if you have an existing business relationship or an existing non-business relationship with the recipient.

An existing non-business relationship, as defined under CASL, is created when a person makes a donation or gift to the registered charity, or performs volunteer work or attends a meeting organized by the charity. A registered charity would have implied consent to send CEMs to this person for two years following the event that starts the relationship (e.g. gift or donation made).

Also, under the section 66 transitional provision, consent to send CEMs is implied for a period of 36 months beginning July 1, 2014, where there is an existing business or non-business relationship that includes the communication of CEMs. During the transitional period, the definition of existing non-business relationship is not subject to the limitation period of 2 years mentioned above. Note however, that this three-year period of implied consent will end if the recipient indicates that they no longer consent to receiving CEMs.

Disclaimer:  While every effort has been made to ensure the accuracy of this publication relating to Canada's anti-spam legislation and charitable gaming, it is not intended to provide legal advice.  Please contact a lawyer.  My apologies if any links are broken.  I try to keep them current.

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