Back in 1971, the US Congress ruled that information published by the Federal Election Commission containing political donations by individuals could not be used “by any person for the purpose of soliciting contributions or for commercial purposes.”
Over the years, many special-case exemptions have been made to allow certain companies to be exempt from that ruling, and it’s always been slightly unclear whether Congress meant for the purpose of soliciting just political contributions or if charitable fundraising was also under that prohibition.
Regardless, over the years every wealth screening company in our sector added political giving into their product, and most of us used it as a lookup service because:
- political giving has been a great indicator of someone’s philanthropic propensity
- FEC data includes the tantalizing tidbit “Occupation,” which sometimes can be very hard to find
- lots of times you can find a home address and
- spouse name
FEC data is just gold sometimes. It’s publicly-available, and it’s free.
But using it is prohibited.
In January of this year, a vendor to nonprofit organizations called ALUMinate asked the FEC to re-look at the question, specifically to ask if they could use FEC data in their product to identify donors already in an organization’s database – not for new prospect identification. The donors were already there, they just wanted to use the information to help nonprofits segment people.
This request was backed up by a fascinating support letter (and if this stuff interests you, it’s worth a read) written by Tyler Hagenbush and Shanna M. Reulbach, attorneys at the law firm of Perkins Coie. They argued that lots of companies had already gotten the FEC’s blessing to use the data for far more commercial purposes, and that this use-case was at least consistent – if not even more limited – that those uses.
The FEC’s final response on this request came down on the last day of last month, and it’s done absolutely nothing to shed light on the topic.
The FEC couldn’t come to a conclusion, so we go back to assuming that they mean ALL forms of fundraising but nobody really knows.
Our professional association, Apra, has issued advice (See “List collection – FEC Data) for those of us in prospect development to strictly avoid using FEC data in our work in order to comply. That’s a safe interpretation of the law and one that we follow here at The Helen Brown Group.
It sits fine with me when we’re talking about using it for prospect research purposes. I get it. Sometimes it takes effort to convince clients why they should ignore an honestly valuable resource in a wealth screening product. But that’s the way we have to roll.
Where it really bothers me is when we talk about due diligence research. Particularly when we’re looking to see if someone is a politically exposed person or if they may have supported candidates with extremist views or have made political donations that go in direct opposition to the mission of the nonprofit we’re helping.
Due diligence is all about protecting a nonprofit from harm, whether it’s avoiding association with unsavory people, avoiding financial harm, or mitigating reputational risk.
By not using key FEC data for due diligence research, which at the end of the day is being used for fundraising purposes, we’re purposefully hindering our ability to protect a nonprofit organization from harm.
I’m not suggesting that we should violate the law to do due diligence. What I’m saying is that vendors asking the FEC for permission to use this data isn’t going to be the solution to the question of whether nonprofits can use it or not.
I don’t know who the correct body is. A professional association? A consortium of nonprofits that do a ton of due diligence?
The bottom line from the recent non-ruling, though, is that we still can’t use FEC data for fundraising purposes. And that includes due diligence.
Here’s ALUMinate’s press release on the Advisory Opinion: https://www.aluminateus.com/fec/