Registered Charities, Fundraising, CASL and more..

CASL re Registered Charities, Fundraising, and more

The short answers via the CRTC

Registered Charities

• Commercial electronic messages (CEMs) sent by or on behalf of a ‘registered charity’ as defined in s. 248(1) of the Income Tax Act, are excluded from section 6 of CASL.
• The primary purpose of the CEM must be to raise funds for the charity, you are excluded from section 6 of CASL.
• CASL does not apply

Does the legislation prohibit me from sending marketing messages?

No. Rather, it sets out some requirements for sending a certain type of message, called a commercial electronic message (CEM), to an electronic address.

If you are sending a CEM to an electronic address, then you need to comply with three requirements. You need to: (1) obtain consent, (2) provide identification information, and (3) provide an unsubscribe mechanism.

Does section 6 of CASL apply to commercial electronic messages (CEMs) sent between persons within an organization or sent between organizations?

No, there is an exemption for persons sending CEMs to other persons within their organization, where the CEMs concern the activities of the organization. Similarly, there is an exemption for persons sending CEMs to persons at another organization, where the CEMs concern the activities of that other organization and the organizations have a relationship. If the CEM does not concern the activities of the organization, or if the organizations do not have a relationship, then the requirements under section 6 of the legislation apply.

There is also an exemption for persons who send CEMs to other persons with whom they have a personal or family relationship, as defined in the Governor-in-Council Regulations. See the question – Does section 6 of CASL apply to messages sent by friends or family members?

When does section 6 of CASL apply?

Section 6 of CASL applies to a commercial electronic message (CEM) that is sent to an electronic address. If both of these elements exist, then section 6 applies.

Section 6 does not apply if the CEM is not sent to an electronic address, as defined in the legislation. Also, section 6 of CASL does not apply to interactive two-way voice communication between individuals, nor does it apply to faxes or voice recordings sent to a telephone account. However, other requirements outside of CASL may apply in situations like these, such as the Unsolicited Telecommunications Rules.

Also, a computer system located in Canada must be used to send or access the CEM for section 6 to apply. Simply routing a CEM through Canada is not enough to engage section 6.

The comments by the CRTC in its FAQ indicate that its interpretation of the fundraising exemption will be similar to the comments made by Imagine Canada in its June 5th release (and associated FAQ). By this we mean, that for the purposes of CASL, it appears that the fundraising exemption will be interpreted fairly broadly and will include activities that may not be considered fundraising based on the guidance on this issue published by Canada Revenue Agency (“CRA”).

While it is good news for registered charities to have some level of clarity on this matter, it is also important for registered charities to review their ‘fundraising activities’ very carefully and compare what is permitted by CRA and what will likely be permitted under CASL.

It is also important for registered charities to remember the fundraising ratios they must adhere to. It would be prudent for registered charities to review the fundraising guidance from CRA when analyzing their electronic messages and determining which of them may fit within the fundraising exemption available under CASL. It may not necessarily be beneficial to try to fit all electronic messages into the fundraising exemption available under CASL if doing so could put an organization offside the fundraising restrictions administered by CRA.

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.

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:
2. 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.
3. 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.
4. 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.
5. Where the primary purpose is not raising funds:
6. 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 advertises 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.

Unsubscribe

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. The question under this heading relates to the third requirement – unsubscribe mechanism.

What is an unsubscribe mechanism?

Under CASL, you must include an unsubscribe mechanism in the commercial electronic messages (CEMs) that you send. For example, a CEM sent via SMS may state that an end-user can unsubscribe by texting the word “STOP.” Another possibility is a hyperlink that is included clearly and prominently in an email that allows the end-user to unsubscribe by simply clicking it. The hyperlink may also be to a webpage that is readily accessible without delay and is at no cost to the recipient.

You can set up your unsubscribe mechanism in many different ways. It can be broad or very granular. For example, you can offer a choice to the recipient, allowing them to unsubscribe from all or just some types of CEMs your organization sends.

A key aspect is that an unsubscribe mechanism must be “readily performed.” It should be simple, quick and easy for the end-user.

One example of an acceptable unsubscribe mechanism that meets the criteria for ‘readily performed’ in the view of Commission staff, would be an unsubscribe link in an email that takes the user to a web page where he or she can unsubscribe from receiving all or some types of CEMs from the sender. In the case of a short message service (SMS), the user should have the choice between replying to the SMS message with the word “STOP” or “Unsubscribe”, or clicking on a link that will take the user to a web page where he or she can unsubscribe from receiving all or some types of CEMs from the sender.

One example of a non-compliant unsubscribe mechanism that does not meet the criteria of ‘readily performed’ in the view of Commission staff, would be an unsubscribe mechanism where the user would be required to take several steps in order to unsubscribe.  Here is an example of a 6 (six) step approach that would be considered non-compliant under CASL:

1. The user is required to click on a “unsubscribe” hyperlink within a CEM;
2. The user is then taken to a webpage and must navigate through text that contains  multiple links trying to locate the link that will allow the user to unsubscribe from future CEMs;
3. Once the “unsubscribe” link is found and clicked, the user is redirected to a ‘login’ button;
4. The user is required to log into their existing account with their username and password;
5. They are then redirected to a page that provides them with a selection to “Quit /Give up/ Delete Account” or “Unsubscribe’ located at the bottom of the webpage;
6. Only after all these steps are completed, does the user receive a notice that the account has been deleted or that they are now unsubscribed.

For more examples of acceptable unsubscribe mechanisms under CASL, please see Compliance and Enforcement Information Bulletin CRTC 2012-548.( from 2012)