Good Counsel: Share Member Information With Care
Think twice before renting member information to just anyone who asks for it. Check out these caveats to putting exhibitors in touch with your members.
As you prepare for your events involving exhibitors or sponsors, you will likely encounter questions about how they can connect with your members and attendees. These companies are paying for the opportunity to participate in your activities and gain access to your audience. This may include obtaining your membership lists and members’ and attendees’ contact information.
These interactions can be a win-win-win arrangement: Your organization gains revenue; your members get information, resources, and discounts; and vendors develop new business. But keep a few things in mind when you put exhibitors and sponsors in touch with your members.
1. Revenue versus relationships: Associations can reap considerable revenue from renting their membership lists and contact data. But think twice before renting member information to just anyone who asks for it. Members may be unhappy about receiving communications from third parties facilitated by their association, particularly if they believe the solicitations are not relevant to them.
3. Ownership and protection: Your membership lists and member data are important assets that you should do your best to protect and control. A written agreement licensing this information should usually state that your association owns the data. It might also specify that the list may be used only for a particular purpose, limit the number of authorized uses, or require the renting entity to obtain approval from you for each separate use.
4. Tax ramifications: Income received by a tax-exempt organization from the sale or rental of membership lists is considered “passive” and exempt from income tax so long as the organization merely licenses its lists to others for their use. If you take an active role in promoting a company’s products or services, the income could be subject to taxation.
Dawn Crowell Murphy is an associate with Pillsbury Winthrop Shaw Pittman LLP’s Nonprofit Organizations Practice in Washington, DC. Email: firstname.lastname@example.org