The Application of PIPEDA to Charitable and Non-Profit Organizations
Our Office is often asked about the application of the Personal Information Protection and Electronic Documents Act (PIPEDA) to charities, non-profit organizations, associations and other similar organizations. In particular, many organizations and individuals want to know how the Act applies to fundraising and other activities such as mailing information to previous donors or members.
As of January 1, 2004, PIPEDA applies to every organization that collects, uses or discloses personal information in the course of commercial activities. However, the federal government may exempt organizations and/or activities in provinces that are deemed to have adopted substantially similar privacy legislation. The Act also applies to personal information in interprovincial and international transactions by all organizations subject to the Act in the course of their commercial activities.
The presence of commercial activity is the most important consideration in determining whether or not an organization is subject to the Act. Section 2 of the Act defines "commercial activity" as:
"...any particular transaction, act or conduct or any regular course of conduct that is of a commercial character, including the selling, bartering or leasing of donor, membership or other fundraising lists. "
Whether or not an organization operates on a non-profit basis is not conclusive in determining the application of the Act. The term non-profit or not-for-profit is a technical term that is not found in PIPEDA. The bottom line is that non-profit status does not automatically exempt an organization from the application of the Act.
Most non-profits are not subject to the Act because they do not engage in commercial activities. This is typically the case with most charities, minor hockey associations, clubs, community groups and advocacy organizations. Collecting membership fees, organizing club activities, compiling a list of members' names and addresses, and mailing out newsletters are not considered commercial activities. Similarly, fundraising is not a commercial activity. However, some clubs, for example many golf clubs and athletic clubs, may be engaged in commercial activities which are subject to the Act.
As the definition of commercial activity makes clear, selling, bartering or leasing a membership list or a list of donors would be considered a commercial activity. As a result, consent is required for the disclosure of this information. Assuming the information would not be considered sensitive, an organization could use a clear, simple and easy-to-execute opt-out process as a means of obtaining consent.
Although the Act does not generally apply to charities, associations and other similar organizations, we recommend that such organizations provide their members, donors or supporters with an opportunity to decline to receive further communications.
Charities and other similar organizations should also be aware that some provinces have passed legislation similar to PIPEDA. Some of these laws apply to charities and other non-profit organizations.
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