Canada’s Anti-Spam Legislation (CASL) came into force on July 1. With many organizations still working on complying with the new legislation, the CRTC has begun to issue interpretative guidance. Most recently, the CRTC released updated FAQs that clarified the fundraising exemption and its application to commercial electronic messages (CEMs) “whose primary purpose is that of fundraising”.
What is fundraising?
The fundraising exemption under CASL enables registered charities to freely send CEMs where the primary purpose of the message is fundraising. Until recently and in the absence of additional information from either the CRTC or Industry Canada, clients struggled to understand:
1) what activities constituted fundraising; and
2) what “primary purpose” meant to qualify an email for the fundraising exemption.
Just prior to the coming into force of CASL, Imagine Canada released an issue alert based on advice received from Industry Canada (see Imagine Canada, Issue Alert: Update and clarifications on Canada’s Anti-Spam Law; http://www.imaginecanada.ca/node/2798 as well as their Frequently Asked Questions (FAQs) specific for registered charities at http://www.imaginecanada.ca/node/2799) that clarified the scope of fundraising covered by CASL. According to the alert, fundraising included all activities under the Canada Revenue Agency’s definition of fundraising as well as a number of other activities such as offering and/or promoting services to individuals on a cost-recovery basis and sending newsletters that promoted upcoming fundraising events.
More recently, the CRTC has provided additional updated FAQs outlining when a CEM has fundraising as its primary purpose and therefore falls under the exemption.
When is fundraising the primary purpose of a CEM?
The CRTC did not provide any hard and fast rules about when fundraising would be found to be the primary purpose of a message. Rather, the CRTC illustrated its understanding by way of example. To summarize, according to the CRTC:
- A CEM that promotes a fundraising event where the proceeds from ticket sales flow to the registered charity has as its primary purpose the raising of funds.
- An e-mailed charitable newsletter that does not contain any material that could be construed as encouraging the recipient to participate in commercial activity has as its primary purpose the raising of funds.
- An e-mailed charitable newsletter that mentions corporate sponsors who support the charity (but does not encourage the recipient to participate in a commercial activity with that sponsor) has as its primary purpose the raising of funds. According to the CRTC, while this message may be considered a CEM under CASL, the primary purpose of the message may be viewed as raising funds; therefore, the fundraising exemption would apply.
In contrast, the CRTC explained that an e-mailed charitable newsletter providing information about the charity’s activities may not have fundraising as its primary purpose when the newsletter contains advertising from corporate sponsors and also encourages the recipient to participate in commercial activity with that sponsor.
The CRTC enforcement approach and registered charities
Our advice to clients has been and continues to be to interpret the fundraising exemption as broadly as possible within reason. Registered charities acting in good faith while attempting to comply with CASL are not the main focus of this legislation. Our position is validated by the CRTC, which has said that that its goals is “… to promote compliance with the CASL in the most efficient way possible while preventing recidivism.” While the CRTC acknowledges that it has the authority to impose administrative monetary penalties, it also outlined a number of key factors that will be taken into account when assessing a measure or penalty for non-compliance including:
- demonstrations of due diligence (such as an organization’s tracking of how email addresses and consents have been obtained and the inclusion of an unsubscribe option);
- the number of complaints and/or severity of the non-compliance related to a particular organization; and
- whether or not an organization is willing to provide of an undertaking to comply with the CRTC (eliminates the possibility of private lawsuits).
Getting additional help with/information about CASL compliance
DDO Health Law’s Toolkit on CASL compliance is now available. For more information or to obtain a copy, please contact Kathy O’Brien at firstname.lastname@example.org or 416.967.7100 ext 227. Additionally, the CRTC FAQs can be found here.