CASL Guidance for Registered Charities
Canada’s Anti-Spam Legislation (“CASL”), which came into force on July 1, 2014, is considered to be the toughest commercial electronic messaging (“CEM”) legislation in the world, with substantial fines for violations (including fines up to $10 million for organizations).
While CASL’s prohibition on sending CEMs (without adhering to prescribed consent, form and unsubscribe requirements) applies to all organizations, the regulations exempt CEMs sent by a registered charity (as defined under Canada’s federal Income Tax Act) where the primary purpose of the CEM is to raise funds for the charity.
Registered charities making efforts to comply with CASL have had difficulty determining the scope of the fundraising exemption because of ambiguity with respect to the meaning of the words “primary purpose” and the fundraising activities untended to be covered by the exemption.
Imagine Canada, a national charitable organization whose cause is Canada’s charities, provided some clarity in a set of unofficial FAQs released on June 5, 2014, which indicated that the CASL fundraising exemption would be interpreted broadly. These FAQs were notable as Industry Canada provided commentary on the issues to Imagine Canada. However, the Canadian Radio-television and Telecommunications Commission (the “CRTC”), which has assumed primary enforcement responsibility with respect to CASL, had not yet provided any official guidance.
In order to clarify the scope of the fundraising exemption, the CRTC released a new set of FAQs on July 4, 2014. Significantly, the CRTC noted that it intends to construe the fundraising exemption broadly and focus its primary enforcement efforts on organizations that attempt to circumvent CASL requirements under the guise of a registered charity. While the guidance in the CRTC’s FAQs are helpful, they do not have the force of law, so organizations should rely on the guidance with caution.
“Primary Purpose” and “Raising Funds”
According to the CRTC’s FAQ’s, the “primary purpose” of a CEM means the main reason or main purpose of the CEM. When relying on the fundraising exemption, there may be a secondary or additional purpose to the message, but the principal purpose of the message must be to raise funds for the charity. For example, the exemption would likely apply to:
- a CEM sent by a charity which promotes or sells tickets to a fundraising event, such as a dinner, golf tournament or concert, where the proceeds from the event flow to the charity; and
- an email newsletter that contains a section soliciting donations. Corporate sponsors of the charity may be mentioned, but the recipient must not be encouraged to participate in a commercial activity with a sponsor.
In contrast, the CRTC states that an email newsletter that provides information about the charity’s activities, if the email also advertises the charity’s corporate sponsors and encourages the recipient to participate in a commercial activity with a sponsor, would likely fall outside the exemption.
The CRTC FAQs do not directly address the scope of activities considered to fall under the category of “raising funds”. As a result, it remains unclear whether the exemption covers only the limited activities considered to be fundraising activities under the federal Income Tax Act, or a different scope of activities (as suggested by Imagine Canada in its FAQs).
The CRTC FAQs also confirm that a registered charity can rely on the implied consent of a recipient if it has an existing non-business relationship (“ENBR”) with the recipient. An ENBR is established when a person makes a donation or gift to a registered charity, performs volunteer work for the charity or attends a meeting organized by the charity. The registered charity may rely on that person’s implied consent due to the ENBR for a two-year period from the date of the event that established the relationship.
Registered charities also benefit from the CASL transitional provisions, which provide that ENBR implied consent obtained and still in effect as of July 1, 2014 will continue until July 1, 2017, regardless of the usual limitation period, if that ENBR included the communication of CEMs between the registered charity and the recipient. However, as with all consents, this implied consent will end in the event that the recipient withdraws consent.
Other Not For Profit Organizations
It is important to note that not for profit organizations that are not registered charities will not benefit from the CASL fundraising exemption. Any fundraising emails sent by not for profits will be considered CEMs.
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