---------- Forwarded message ---------- Date: Mon, 28 Jan 2002 10:39:44 EST From: Privacy Leadership Initiative <kpatzkeat_private> To: declanat_private Subject: Privacy Leadership Initiative News Release ( BW)(DC-PRIVACY-LEADERSHIP) Opt-In Laws Could Cost U.S. Charities $16.5 Billion, Study Released Today by The Direct Marketing Association's Information Services Executive Council and the PLI Finds Business Editors WASHINGTON--(BUSINESS WIRE)--Jan. 28, 2002-- Groups Concerned about Unintended Consequences Charities could lose an estimated $16.5 billion nationwide if the present "opt-out" system for sharing information were eliminated, according to a study released today by The Direct Marketing Association's Information Services Executive Council (ISEC) and the Privacy Leadership Initiative (PLI). The study examined the potential costs of restrictions on the sharing of personal data with third parties. "States considering laws requiring consumers to opt-in before personal information can be shared may instead run into a more powerful law: the law of unintended consequences," said David Klaus, Executive Director of PLI. "No one wants to inhibit charities from raising more money or increasing their cost of doing business, but unfortunately, that is one unintended consequence of `opt-in' legislation." The opt-out system currently in place for most charities and businesses allows individuals to request that their information not be shared, if that is their preference. An opt-in law, by contrast, would prohibit sharing of any information without obtaining explicit permission. The study's author and ISEC's executive director, Michael A. Turner, Ph.D., concluded that opt-in laws would hurt charities in virtually every phase of their fundraising. In addition to hampering charities' direct mail solicitations, data restrictions would also negatively impact the ability of organizations to make direct, personal appeals. These direct appeals are the largest source of charitable giving in the U.S. Turner said, "If charitable organizations cannot use external data to identify prospects that are likely to give, then the only way to prospect would be to send untargeted mailings to a random list of prospects." Turner added that contrary to the expectations of lawmakers and citizens, the end result could be even more mailings to more households than before such a law. The study found that exempting nonprofit organizations from the burdens of the law would probably fail. Because nonprofit accounts represent less than 10 percent of the business for large information service providers, the companies that charities rely on for information "would not be viable under a strict data restriction," according to the study. "The irony is that our major charities have been among the leaders in developing comprehensive privacy policies, and they have a history of respecting their donors' privacy preferences," continued PLI's Klaus. "Yet comprehensive data laws that require opt-in could severely limit these charities' ability to raise funds for their critical missions, such as medical research, education, feeding the hungry and providing much-needed health care." In 1999, Americans made $190 billion in charitable contributions. Opt-in laws would raise the bar for charities that depend on locating new and generous donors to fund their initiatives, Turner said. "It's a classic case of throwing the baby out with the bathwater. Sometimes `simple fixes' cause more problems than they solve." The complete study is available at www.understandingprivacy.org About the Privacy Leadership Initiative The PLI is a partnership of visionary CEOs from 15 major corporations and 8 leading business associations who believe individuals should be able to choose what and how personal information is used in the pursuit of better meeting their needs. Through research and knowledge building, the PLI is working to build a climate of trust - both online and offline - to help accelerate the emergence of the information economy as a safe marketplace. For more information, please visit our Web site at www.understandingprivacy.org CONTACT: Privacy Leadership Initiative Kerry Patzke, 202/530-4524 kpatzkeat_private ------------------------------------------------------------------------- POLITECH -- Declan McCullagh's politics and technology mailing list You may redistribute this message freely if you include this notice. 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