List Industry Comes Together to Combat Bad ImageMembers of the list industry urged list brokers and list management companies last week to review their practices in the wake of ramifications stemming from a congressional hearing that examined list brokering in the public broadcasting industry. There's a fear that the industry could be investigated in a similar fashion to sweepstakes.
The hearing, which was held July 20 by the House commerce subcommittee on telecommunications, came on the heels of news reports saying WGBH-TV, a Boston public television station, traded mailing list names with the Democratic National Committee despite Internal Revenue Service regulations that prohibit the station from trading names with just one political group. The station's funding is being investigated as a result.
People in the list business fear the current climate could lead to deep cuts on money raised not only by public television stations but other federally supported nonprofit organizations. They also are concerned that legislators -- who wanted to probe deeper into the mechanics of renting lists at the hearing -- may look at the list brokering industry more closely in both the nonprofit and profit sectors.
"Now that some Washington decision makers are beginning to throw an unfair light on the business of exchanging and renting mailing lists, we strongly advise our colleagues to take a critical look at their list management policies," said Neal Denton, executive director of the Alliance of Nonprofit Mailers. Some of its members include consultants who do strategic planning, marketing services, list brokerage and list management.
Denton is asking list companies to re-examine their policies and be very clear about their privacy and opt-out policies in case the industry is investigated. The alliance promotes the notion of offering an opt-out opportunity for its members' constituents, he said. As far back as 1993, its board of directors voted to endorse the Donor Bill of Rights, which includes a provision allowing donors "to have the opportunity for their names to be deleted from mailing lists that an organization may intend to share."
David Herrick, chief financial officer and executive vice president of Names in the News California, San Francisco, a list marketing and consulting company whose client base includes both public television stations and political organizations, agreed with Denton.
"All organizations [in this industry] are very aware of privacy issues and opt out, and they are working hard to make sure that those programs are successful and that everybody that receives mail has the opportunity to opt out."
In addition, Herrick stressed that it is neither egregious nor illegal for public television stations to trade mailing lists with political organizations and "it would be good for the industry to stand up and say this is what we do. It should be pointed out to Congress that our policies are fair and legal and that every [member of Congress] has used direct marketing to raise funds for themselves to get to where they are. They may be ignorant of how it works, but they have used the practice and they should educate themselves."
While no additional congressional hearing has been scheduled, the scuttlebutt is far from slowing down. The Corporation for Public Broadcasting's board announced July 23 that public television and radio stations must cease renting or exchanging membership lists with partisan political groups. Further, the board endorsed the CPB's steps to eliminate the practice and resolved that CPB management proceed with all necessary additional steps to "ensure that public broadcasting stations refrain from any use of member and donor lists in connection with political parties and campaigns or in other ways that fail to honor the preferences of their members and donors with respect to the use of this information and the trust of the American people."
CPB president/CEO Robert T. Coonrod also has directed staff members to implement grant guidelines requiring stations to refrain from renting, leasing, trading or otherwise exchanging their membership or donor lists with any political organization, party, committee, candidate, campaign or action committee for any purpose whatsoever. In addition, CPB management has referred the matter to the CPB Inspector General, who has undertaken an independent review of the station's practices in connection with the use of member and donor lists and is expected to report its findings to Congress by the end of the month.
On July 15, CPB began requiring stations to certify annually their compliance with IRS laws and regulations regarding their tax-exempt status and with all federal laws and regulations governing political activity and lobbying.
"The CPB board will not condone any activities by stations [that] raise doubts about the integrity and objectivity of public broadcasting," said board chairwoman Diane Blair. "This resolution expresses our determination to do whatever is within our power to ensure that the trust of the American people -- which is the most precious asset of public broadcasting -- is fully justified and promptly restored."