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Arts Law Memo
ACross stAtE LiNEs from a live operator, through use of organizations are membership based.
The No Call law applies to automatic dialing and announcing Typically, the board of directors simply
businesses outside of Missouri that equipment or by any other means for perpetuates itself.
place calls to residences in this state. the purpose of encouraging the In an effort to close the No Call
Arts organizations that make calls to purchase or rental of, or investment in, statute’s various loopholes, Attorney
neighboring states should be aware that property, goods or services,” there is a General Jay Nixon predicts that it will
Kansas and Illinois have passed their limited exemption for tax-exempt be revisited this year. If state officials
own telephone marketing laws and that organizations. hear from enough nonprofits, the “bona
further legislation is pending. Not covered by the law are fide member” requirement could be
ExEmPtioNs communications made “by or on behalf changed.
Critics, such as AARP, complain of an entity pursuant to Chapter 501(c) ComPLiANCE & GooDwiLL
that too many powerful industries are (3) of the United States Internal Your organization’s reputation and
exempt from the new law. They include Revenue Code, while such entity is stature in the community are its most
telephone and insurance companies. engaged in fund raising to support the valuable assets. So full compliance with
There also is an exemption that charitable purpose for which the entity the telemarketing lawswill foster
allows telemarketers to call potential was established (italics added) provided goodwill. In other words, if an
customers if a face-to-face meeting is that a bona fide member of such exempt individual asks not to be called, the
required to close the deal. That loophole organization makes the voice ethical practice would be not to call that
exempts home improvement contractors communication.” individual.
and vacation home salesmen. Another Rules drafted to help implement the A CALLiNG tiP
important exemption covers companies No Call law define bona fide member in The effectiveness of telemarketing
with which the consumer already has a accordance with Missouri’s nonprofit campaigns is related to the demeanor
business relationship. statute. In this arena, members are those and knowledge of the caller, whether
NoNProfits who vote for the board of directors; in-house or professional. One
Under Section 407.1095(3) of the they are not volunteers or “friends” of recommended practice is to begin the
new law, which defines telephone the organization who purchase annual call by asking the prospective patron if
solicitation as “any voice memberships or make donations. it is a convenient time to talk.
communication over the telephone line Few Missouri nonprofit arts
Two Federal Rules GovernTelemarketing
There are two somewhat overlapping federal laws inbound or outbound interstate telephone calls to sell
that regulate telemarketing to residences. They are the goods or services.
Telephone Consumer Protection Act of 1991, which is Like the TCPA, it requires telemarketers to honor a
regulated by the Federal Communications consumer’s requests not to be called again.
Commission (FCC), and the 1994 Telmarketing and Charitable organizations are exempt from
Consumer Fraud Abuse Prevention Act, which is Telemarketing Sales Rule when they are soliciting
regulated by the Federal Trade Commission. The charitable donations. But the rules do apply to
regulations implementing the latter are known as the commercial transactions (such as selling
Telemarketing Sales Rule. subscriptions). In most cases, they also apply to for-
The Telephone Consumer Protection Act (TCPA) profit telemarketing companies making calls on behalf
focuses on the use of telephone lines. It requires of nonprofit organizations.
telemarketers to take consumers off their lists on Under the Telemarketing Sales Rule, telemarketers
request. It also requires them to maintain a written are required to make clear and conspicuous oral
policy for maintaining do not call lists. disclosures including: the seller’s identity; that the
Calls by or on behalf of tax-exempt organizations purpose of the call is to sell; the nature of the goods
are not required to comply with the do not call list and services offered; and that no payment or purchase
requirements. Also exempted are calls with whom the is necessary to win if a prize promotion is offered. For
caller has an established business relationship. transactions, the cost of the goods or services offered
In addition, the TCPA restricts the use of FAX and any policy of not making refunds or exchanges
machines and puts some limits on recorded messages also must be disclosed.
and automatic dialing devices. Both laws restrict calling hours. With some
The Telemarketing Sales Rule is designed to exceptions, telemarketers can only make calls to
minimize scams. It governs businesses that use either residences between 8:00 a.m. and 9:00 p.m.
St. Louis Volunteer Lawyers and Accountants for the Arts
Arts Law Memo
E-mail marketing: is it outreach or is it spam?
A little publicized provision of the new No Call law
addresses commercial e-mail communication. It
prohibits a person or entity conducting business in
affirmative action constitutes consent, which is the
foundation of permission marketing.
The other, somewhat controversial method is known
Missouri from sending or causing commercial e-mail to as opt-out. It gives the receipt the option of
be sent without including a toll-free telephone number discontinuing further communication by checking a box
or valid return e-mail address that the recipient may use or sending an e-mail message.
to notify the sender not to send further e-mail PRIVACy POLICIES: THE BASICS
The junk e-mail problem touches on several ethical in building trust with audiences and donors. It assures
concerns. They incluce the protection of commercial them that their private information will be respected.
speech under the First Amendment, the practicality of Generally, policies state that the organization is
regulating the free flow of information on the Internet committed to maintaining the individual’s privacy and
andprivacy rights. will safeguard all personal information. Policies explain
THE BENEFITS OF E-MAIL how the collected information will be used and promise
E-mail is an increasingly powerful medium for that the organization will not sell or disclose the
exchanging information and is probably the primary information to outside parties without consent.
explanation for the Internet’s The On-line Privacy
success. Numerous surveys online Privacy Law Anticipated Alliance (www.privacy
have documented the The new Congress is expected to pass a law alliance.org), an international
exponential growth in the providing basic protections for consumer online coalition of companies and
number of e-mail users and privacy. According to a recent article by Carolyn Duffy associations, recommends
the importance that it plays Marsan, which was posted on infoworld.com, the that policies contain at least
in their lives, both at work legislation will address four principles: these specific elements:
and at home. • Notice. Web site operators will be required to • Notice and Disclosure. The
For nonprofit arts explicitly notify customers about personal information policy should be easy to find,
organizations, e-mail can being gathered and how the information is used. read and understand. It
complement traditional direct • Choice. Consumers will be able to opt-out of should include the
mail, telemarketing and information collection. organization’s contact
advertising. And it offers • Access. Consumers will be able to see in information information (a phone number
unparalled, low-cost gathered about them and correct errors. and e-mail address).
opportunities for building • Integrity. Web site operators will be required to • Choice/Consent.
relationships with current ensure that consumer information is protected from Individuals should be given a
and potential audiences, unauthorized use. choice regarding how their
volunteers and donors. Currently, approximately 97 percent of U.S. sites identifiable information is
SPAM IS AN INTRUSION collect personal information, but only 20 percent used when the use is
While sending unsolicited provide notice, choice, access and integrity. unrelated to the purpose for
commercial e-mail is easy which it was initially
and relatively inexpensive, collected.
loss of goodwill and legal uncertainty are not worth any • Data Security. Organizations that create, maintain,
cost. Simply stated, don’t be a spammer. use or disseminate individually identifiable information
According to Internet folklore, the term spam was should take appropriate steps to assure its reliability.
derived from a Monty Python sketch set in a cafe where They also should take reasonable precautions to protect
the menu consists almost exclusively of Spam, the the information from loss, misuse and alteration. These
canned luncheon meat. On the Internet, spam is precautions should be explained in the policy.
regarded as an electronic nuisance. Most Internet • Data Quality and Access. Organizations should take
Services Providers (ISP) have a policy that forbids spam. steps to assure that the collected information, especially
Of course, not all bulk e-mail is spam. If the account information, is accurate and complete.
information is requested or your organization has an Individuals should be given assurance that mistakes will
existing relationship with the recipient, the message is be corrected promptly.
probably not a breach of “netiquette.” There are many excellent examples of policies (e.g.,
CREATING AN ELECTRONIC MAILING LIST Metropolitan Museum of Art, www.metmuseum.org)
There are many ways to compile an e-mail database. that can be tailored to meet your organization’s needs.
The recommended method is known as opt-in. It makes
use of printed or on-line registration forms. Taking this
St. Louis Volunteer Lawyers and Accountants for the Arts
Council, a state agency; and the Missouri Arts Council, a state agency.
Whitaker Foundation; Regional Arts Commission; the Illinois Arts
Publication of Arts Law Memo is made possible by grants from the
St. LOuiS, MO 63103
PERMit nO. 3363
St. LOuiS, MO
MEASURING WEB SItE trAffiC
Some organizations use sophisticated logs to provide insights into the use of their Web sites and help improve the site’s design
and content. The logs give an aggregate breakdown of the numbers of visitors, whether the visitor arrived from an external link,
search engine or bookmark, how long the visitor stayed and more. One provider of this analysis is Hitbox. The service is free if the
subscriber places the company’s banner or button on its site. Alternatively, for those who don’t want to host the advertisement, it is
available for a small monthly fee. For more information, visit HitBox (get.hitbox.com).
booKs & PErioDiCALs
Fisher, Michael A. “The Right to Spam? Regulating Electronic E-Mail.” Columbia-VLA Journal of Law & the Arts, Spring 2000.
This scholarly article addresses restrictions on commercial speech under the First Amendment, the history of the regulation of
unsolicited advertising and the various measures being used to minimize spam.
Grobman, Gary. The Nonprofit Organization’s Guide to E-Commerce. This is a practical guide designed to help nonprofits
maximize results on the Internet. It tells how to add an e-commerce component to your site and discusses legal issues, fund raising
and Web site publicity. The book sells for $19.95, plus $3.50 for shipping and handling. Credit card orders: 717/238-3787.
Kinnard, Shannon. Marketing with E-Mail. This book provides a step-by-step guide through the process of creating and
implementing an e-mail marketing plan that will meet your organization’s specific needs.
Many books on arts law and business practices are available at the St. Louis Volunteer Lawyers and Accountants for the Arts library
located within the Regional Arts Commission office, 3540 Washington, in Grand Center.