The watchdog Charity Navigator is changing its rating rules to penalize nonprofits who fail to provide an ‘opt-in’ process for the rental or exchange of their donors’ names.

The rule, announced on CN’s blog, goes into effect ten days from now on March 1^st for charities they review.

To qualify for the full CN blessing in the watchdog’s ‘Accountability and Transparency’ rating checklist, a charity must have a written donor privacy policy published on its website stating — “unambiguously” — that the organization will:

“…not trade, share or sell a donor’s personal information with anyone else, nor send donor mailings on behalf of other organizations OR it will only share or sell personal information once the donor has given the charity specific permission to do so.”

In a brief sent to his members, but shared with The Agitator, Bob Tigner, the ever-vigilant General Counsel of the Association of Direct Response Fundraising Counsel (ADRFCO), wryly noted that with the promulgation of this new rule “one may suppose that Charity Navigator thought it was paving the way for a world of near-empty mailboxes”.

I’m sure that for those who take Charity Navigator more seriously than they should, a bit of panic has set in. No doubt agencies are receiving ‘what do we do now?’ calls from clients who want to please their boss’ or board’s mandate to win the maximum number of Charity Navigator Stars. [Four stars represent the highest rating.]

Fortunately, Bob has been through more regulatory and watchdog scares involving ‘opt-out’, ‘opt-in’, ‘cost of fundraising’ and ‘overhead’ issues than there are consultants buying clients free meals at a DMA conference.

So, here’s his take — and importantly, his calculation — on the new Charity Navigator rule, or as CN prefers to call it, “updated metric”:

• Unless an organization has an “opt-in” process for rental or exchanges it will be penalized.

• This penalty can partially be offset if the organization offers a clear ‘opt-out’ policy on its website that tells donors they can demand the charity remove their names and contact information from mailing lists the charity exchanges, shares or sells.

• Failure to provide an ‘opt-out’ process for donors will cost you 3 points out of 100 in CN’s ‘accountability’ silo. Having no policy posted on your website, or presumably having no policy at all, results in a four-point deduction.

Because Charity Navigator combines the ‘Accountability’ silo and the ‘Financial’ silo for a 200 point total, Bob notes there is in effect a 1.5 point ‘price’ for sticking with the ‘opt-out’ and not going the ‘opt-in’ route.

Next, Bob clearly and pointedly asks the fundamental question: “How much money will some small sliver of one of CN’s stars bring in? How much money will loss of rentals and exchanges cost your direct response program?”

Of course the answer is: Nothing or a teensy, tiny, itty bit. Surely not enough to warrant jumping through all these hoops, let along wasting your time or raising your blood pressure.

Although Charity Navigator claims that the reason for all this is that “donors have expressed extreme concern about the use of their personal information by charities and the desire to have this information kept confidential”, we wonder just who are these donors clamoring for a new ‘opt-in’ regime? Bob Tigner says, “I’d lay a heavy wager that they are not direct response donors. Maybe they’re CN’s donors.”

Here at The Agitator we’d also advise you to not waste any energy or concern on this latest from Charity Navigator for the simple reason they really don’t matter. At least not when it comes to influencing donors’ behavior. Here’s why:

• A 2010 study 0f 4,000 plus donors by Hope Consulting titled Money for Good (you can download here) found that “few donors do research before they give, and those that do look to the nonprofit itself to provide simple information about efficiency and effectiveness”. In short, ain’t many donors checking Charity Navigator.

• And for those donors who do some research, according to the Hope Consulting study, they look for “information on the efficiency and effectiveness of an organization … and donors typically look to the organization itself to collect information”. And this is true even among the givers of major gifts.

• These findings are very much in line with every study I’ve seen over the years about the influence of charity watchdogs both in the US and in Europe.

All bark. No bite. And sure not worth losin’ much sleep over, especially if your program is based on small and mid-sized gifts.

What are you doing about your privacy policy in light of the new Charity Navigator “updated metric”?

Roger

P.S. Honestly, I’m not against Charity Navigator. They’re entitled to their hustle as much as anyone. Although they’re sure not entitled to disregard or substitute in a whimsical or capricious manner for solid privacy practices that generally exist in our sector.

What I really oppose is the presumption or premise on which Charity Navigator seems to have based its decision: that the use of ‘junk mail’ must be minimized.