Proposed EU data protection rules could destroy mailing lists relied on by charity fundraisers, and would present “the biggest challenge in fundraising for a generation”, according to a report published this week by marketing agency Medialab.

The EU has announced plans for a comprehensive reform of data protection rules which will require individuals to give explicit consent before a company or charity can process their personal data. The rules could come into force as early as 2017.

At present, direct mail and telephone fundraising use an opt-out method, where charities can presume they can contact donors unless asked not to. Email and text fundraising use a “soft opt in”, where charities can contact donors who have expressed interest, have been given an option to opt out, and are being contacted about similar opportunities.

The report, entitled The European Union & Data Protection: The Biggest Challenge in Fundraising for a Generation? says that if the rules change, fundraisers will find it much more difficult to collect and use donor data for appeals.

It quotes Stephen Pidgeon, a fundraising consultant and trustee of the Institute of Fundraising, as saying that “if the EU introduce compulsory ‘opt-ins’ for direct mail then the cold mailing lists that still drive minor donor fundraising will disappear and, with them, millions of pounds”.

The report, written by Andy Taylor, a former fundraising director who is now a consultant at charity marketing agency the Desired Effect, says that if the proposals go ahead, charities will be unable to use donor data for profiling, potentially including IP addresses, which identify any device that connects to the internet. This would make web analytics extremely difficult.

“Donors might still give, but the fact is that many people give when they are asked and because they are asked. If we can’t ask them they won’t give as often, they might give less when they do, or they might not even give at all,” the report says.

“There is a balance to be struck between the donor’s right to privacy and our ability to fundraise, and the current draft of the proposals doesn’t get this right.”

The report says charities should support work being done by the Institute of Fundraising, which is campaigning for the introduction of less stringent proposals. But it says they must also ensure they are compliant with current data protection rules, and must model how they would cope with future changes.

The report was written following a meeting at the Institute of Fundraising National Convention, in which fundraising directors admitted they had little knowledge of the upcoming proposals.

Daniel Fluskey, head of policy and research at the IoF, has said the Institute plans to put out guidance for members about the areas that are likely to be affected by the proposals.

But he says it is hard to give definitive advice as the current draft proposals are different to the original and could be subject to further changes.

• See this month’s Fundraising Magazine for more information about the proposed EU data protection laws and how they could affect your charity.