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Charities Exempt from Most Rules Regarding Telemarketing Calls & Texts

Published 01/27/2016

Although you may not be aware of its legal name, you’re probably a fan of the Telephone Consumer Protection Act (TCPA). Enacted by Congress in 1991, the TCPA addresses certain practices by telemarketers thought to be an invasion of consumer privacy by prohibiting them from calling without prior express consent when making calls either by (1) using an artificial or prerecorded voice to call residential telephones, or (2) using an automatic telephone dialing system (or “autodialer”) or an artificial prerecorded voice to make any non-emergency call or text to a wireless phone number. The three main provisions of the TCPA are: Do-Not-Call Restrictions, Limitations on Prerecorded Calls, and Limitations on Calls and Texts to Mobile Phones using an Autodialer. The TCPA likely has saved you from countless unwanted telemarketing calls from for-profit companies, but you may be wondering why you still receive so many calls from charities asking for donations. The reason is that tax-exempt nonprofit organizations are not subject to some provisions of the TCPA. Telemarketing calls for charitable purposes do, however, need to adhere to certain rules to be exempt from the TCPA. Additionally, a July 2015 ruling by the Federal Communications Commission (FCC) clarified and expanded some of the TCPA’s general provisions in ways that by and large favor consumers.

Calls “made by or on behalf of a tax-exempt nonprofit” are not required to obey do-not-call restrictions, and if made to a residential number, such calls by or on behalf of a charity that use a prerecorded voice (or “robocalls”) also don’t require any express consent, even if an autodialer is used. Regarding wireless numbers, any call or text by or on behalf of a tax-exempt nonprofit, including robocalls or a call/text made by an autodialer, is exempt only from the “written” part of the prior express consent provision of the TCPA. Therefore, prior express consent must be given by the individual being contacted on a cell phone, even if by or on behalf of a charity, but the express consent can be given orally. Charities, however, are not exempt from the TCPA requirements that robocalls must identify the name of the organization initiating the call at the beginning of the prerecorded message and give the organization’s phone number, as well. Most nonprofits also do choose to follow the TCPA’s calling restriction times of between 8 a.m. and 9 p.m. (at the called party’s local time) and organization-specific do not call requirements.

Included under the TCPA exemptions for tax-exempt nonprofits are calls made by independent telemarketers on behalf of a charity as long as the professional fundraiser’s call is purely for charitable solicitation and not for any commercial purpose (i.e., the call can’t encourage the purchase or rental of, or investment in, goods, property, or services). Further, the TCPA exemptions do not apply if a charity engages in co-venture promotions with a for-profit company, even if the promotions contain a charitable solicitation appeal. In other words, if a for-profit company delivers its own commercial message as part of a telemarketing campaign that has a charitable purpose, that call is not exempt from the TCPA and will require prior express written consent from the individual that is called or texted. Also, the TCPA does not allow an individual’s express consent to be transferred from one entity to another, even including between related nonprofits or for-profits that are engaged by nonprofits. The law grants consumers a private right of action under the TCPA, with provision for $500 or the actual monetary loss in damages (whichever is greater) for each call/text violation, with damages tripled for each willful or knowing violation.

TCPA complaints as a whole are the largest category of informal complaints received by the FCC, with “roughly 5,000 or 6,000 such complaints per month” received in 2013 and 2014, according to the FCC’s Declaratory Ruling and Order in the matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, released July 10, 2015. Based in part on comments and concerns expressed by the public, the FCC’s Ruling served to clarify certain parts of the TCPA’s consumer-privacy protections, including: (1) reiteration that text messages, including Internet-to-phone text messages, are subject to the same rules as phone calls; (2) broadening the “autodialer” definition beyond the current use of equipment or software to also include that which has the general capacity to store or produce and dial random or sequential numbers; (3) consumers may revoke their consent to receive autodialed or robocalls at any time and by use of any reasonable means; (4) being on a person’s contact list is not proof of consent for third-party calls; and (5) consent is associated with an individual, not a phone number, which provides protection to consumers regarding reassigned phone numbers.

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