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Putting your best Web foot forward

A nonprofit's Web site must not only constantly earn the trust of donors and visitors, but may also have to do all things possible to ward off possible regulation at the state government level-and this is talking about all 50 states.

"While you would think that actions taken to regulate the Internet would be primarily at the federal level," said Daniel Moore, president, National Association of State Charity Officials (NASCO), "it is usually left to the state and local levels to experiment with new laws and determinations on contemporary issues and technologies."

Making his comments at the recent DMA Nonprofit Federation Critical Issues Conference in Washington, D.C., Moore explained that the short-term regulation of the Internet will fall to self-policing and good practices by nonprofits. "Where and when all 50 states will come together, surely a challenge, and jointly rule on the Internet, is now just speculation," he said.

At present, only a rogue nonprofit need worry that one or more state attorneys general may come pouncing. But, as discussed by the panelists, non-profits with good practices regarding Web sites may be caught in the regulatory fallout, from almost any government body, that is triggered by some rotten apples.

Moore, of the New Mexico Attorney General's Office Registrar of Charitable Organizations, said that NASCO is only now, as is the National Association of Attorneys General, trying to decide government's role in controlling the information marketplace. "Just for opting out and not being bothered, for example, some consumers want a central place or list--and they want enforcement of this list," said Moore.

Moore compared Internet fraud to not being far removed from the $40 billion in telemarketing fraud that victimizes the mostly elderly or disabled. "But conceivably with the Internet one can opt out, especially with using non-personal identifying information at Web sites," mentioned Moore.

Moore did recall the enforcement of privacy issues in cases like DoubleClick, which marketed Web surfing data, and ToySmart, which went bankrupt and the Federal Trade Commission intervened to stop the sale of its databases, protected by a stated privacy policy, as an asset by its creditors.

When a county in New Mexico published property tax information on the Internet, "Judicial and police groups protested this," said Moore, who remarked that such information is readily available to anyone visiting the county clerk's office. "This, the Internet issue, creates some interesting tensions. A similar gaffe in privacy is when a charity's Form 990s, complete with a preparer's Social Security number, is circulated."

Watchful eye

During 1999, at least 1,500 Internet-related pieces of legislation were tracked around the country, said Emily T. Hackett, state policy director for the Internet Alliance. "And, 37 states introduced privacy legislation. All were not passed except for cases of identity theft - a crime that is mostly done offline. We are looking to avoid a 50-state patchwork quilt of regulations on Internet-specific privacy legislation," she said.

Hackett is a member of the Internet State Coalition, which is trying a three-pronged approach: proactivity; defensiveness, such as "don't lie in a privacy policy statement"; and education/dialogues. Its doctrine seeks an educated, empowered consumer as protection against abuse.

"Technology will empower the consumer. But also, industry (self-policing) programs are a much better solution than government programs," said Hackett, who agreed with Moore that bringing the 50 states together is a very big challenge.

Rounding out the panel was Harriet P. Pearson, chief privacy officer for IBM. Pearson is helping to spearhead an Internet privacy group, called the Privacy Leadership Initiative, that includes 10 trade associations, including The DMA, and many companies, such as IBM.

"PLI has a set of five different projects," said Pearson, such as doing research on consumer motivations in expressing their reactions; doing research on the economics of information sharing; working for a set of guidelines on Internet privacy; exploring technologies that are available within the privacy domain; and conducting consumer education for the public's improvement in dealing with the Internet.

Pearson cautioned that initial findings are showing that the merging of databases by different organizations may create a privacy issue.