TCPA Exemptions for Tax-Exempt Nonprofits: What the Rules Carve Out and What They Do Not

Telephone Solicitation and the Tax-Exempt Nonprofit Carve-Out

The Telephone Consumer Protection Act, codified at 47 U.S.C. 227, regulates calls through a handful of defined terms, and the nonprofit carve-outs sit inside those definitions rather than in a single exemption section. The first is in the statute itself. Section 227(a)(4) defines a telephone solicitation as a call or message to encourage the purchase or rental of, or investment in, property, goods or services, "but such term does not include a call or message (A) to any person with that person's prior express invitation or permission, (B) to any person with whom the caller has an established business relationship, or (C) by a tax exempt nonprofit organization."

The FCC's implementing rule, 47 CFR 64.1200, carries the same definition at paragraph (f)(15) with one textual difference. Its exclusion covers a call or message "by or on behalf of a tax-exempt nonprofit organization." The statute says "by" only.

The practical weight of that definition comes from paragraph (c), which applies only to telephone solicitations. It bars them before 8 a.m. or after 9 p.m. local time at the called party's location, and bars them to residential subscribers on the national Do Not Call registry. A call that is not a telephone solicitation is outside both prohibitions.

The rule uses a second term, telemarketing, that has no nonprofit exclusion. Paragraph (f)(13) defines it as "the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services." Several provisions attach to telemarketing rather than to telephone solicitation, including the company-specific do-not-call procedures in paragraph (d) discussed below. Whether a particular nonprofit call is telemarketing depends on its purpose under that definition, not on the caller's tax status.

Prerecorded Calls to Residential Lines

Section 227(b)(1)(B) prohibits calls to a residential line "using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party," unless the call is for emergency purposes or "is exempted by rule or order by the Commission under paragraph (2)(B)." Paragraph (2)(B) lets the FCC exempt calls not made for a commercial purpose and some commercial calls that carry no unsolicited advertisement. Since the TRACED Act, paragraph (2)(I) also requires every such exemption to specify who may call, who may be called, and "the number of such calls that a calling party may make to a particular called party."

The nonprofit exemption is paragraph (a)(3)(iv) of the rule. A prerecorded call to a residential line requires no consent if it:

Is made by or on behalf of a tax-exempt nonprofit organization and the caller makes no more than three calls within any consecutive 30-day period to the residential line and honors the called party's request to opt out of future calls as required in paragraphs (b) and (d) of this section

47 CFR 64.1200(a)(3)(iv)

The three-call limit is relatively recent. In its Report and Order FCC 20-186, adopted December 29, 2020, the FCC observed that it had exempted nonprofit calls to residences since 1992 without limiting their number or requiring an opt-out. It concluded that the TRACED Act gave it no discretion to decline numerical limits, set the cap at three prerecorded calls in any consecutive 30-day period, and required an opt-out. It explained that callers can exceed three calls by obtaining consent, including by using an exempt call to ask for it, or by using a live agent, because the restriction applies only to artificial or prerecorded voice calls. The order gave callers at least six months to implement the new requirements and tied their effective date to OMB approval of the information collections.

Every exempt prerecorded call must also meet the content requirements in paragraph (b). The message must identify the entity responsible for the call at the beginning and state a callback number. For calls made under the (a)(3)(ii) through (v) exemptions to residential subscribers, that number must permit a do-not-call request during regular business hours, and the message must offer an automated voice or key-press opt-out within two seconds of the identification. When the message goes to voicemail, it must provide a toll-free number that reaches the same opt-out mechanism.

Paragraph (d) then requires anyone making prerecorded calls under those exemptions to keep a do-not-call list with a written policy, trained personnel, and caller identification. Requests must be honored within a reasonable time not exceeding ten business days and kept for five years. The paragraph (a)(3) consent rule does not change for nonprofits when a call is telemarketing: a prerecorded telemarketing call to a residence still requires prior express written consent unless it fits an exemption.

Calls and Texts to Wireless Numbers

The nonprofit exemption in (a)(3)(iv) is limited to residential lines, and the FCC said so in the 2020 order: the exemption "applies only to calls made to residential telephone lines." Calls to wireless numbers are governed by paragraph (a)(1), which prohibits any call using an automatic telephone dialing system or an artificial or prerecorded voice to a number assigned to a cellular service, other than a call made for emergency purposes or with the prior express consent of the called party. That paragraph has no nonprofit exception.

Where the nonprofit status does matter for wireless numbers is the type of consent. Paragraph (a)(2) generally requires prior express written consent for autodialed or prerecorded calls that include an advertisement or constitute telemarketing, "other than a call made with the prior express written consent of the called party or the prior express consent of the called party when the call is made by or on behalf of a tax-exempt nonprofit organization." A nonprofit's telemarketing call to a cell phone therefore needs consent, but not the signed written agreement defined in paragraph (f)(9).

Text messages are treated as calls in this framework. The FCC's rule says so expressly for the wireless exemptions in paragraph (a)(9), and paragraph (e) extends the paragraph (c) and (d) Do Not Call rules to telephone solicitations and telemarketing "calls or text messages to wireless telephone numbers." In Facebook, Inc. v. Duguid (2021), the Supreme Court noted that neither party disputed that the prohibition extends to text messages and assumed it did. Duguid's holding narrowed the autodialer definition to equipment that stores or produces numbers "using a random or sequential number generator," which affects whether paragraph (a)(1) applies to a given text platform at all; prerecorded voice calls are covered regardless of dialing equipment.

Two further provisions bear on nonprofits' wireless and residential calling. Paragraph (a)(7)(iv) states that calls made by or on behalf of tax-exempt nonprofits "are not covered" by the three percent call abandonment limit. And the revocation rules in paragraphs (a)(10) through (a)(12) apply to consent given under (a)(1) through (a)(3), which includes the ordinary prior express consent a nonprofit relies on; a called party may revoke it "by using any reasonable method."

Calls Made on a Nonprofit's Behalf

The FCC's rule text consistently extends the nonprofit provisions to calls made "by or on behalf of" a tax-exempt nonprofit organization: in the telephone solicitation definition, the residential prerecorded exemption, the wireless consent standard and the abandonment carve-out. The 2020 order describes the exemption the same way. The statute's telephone solicitation definition uses "by" alone, and the rule's broader wording is the FCC's.

The rule does not define tax-exempt nonprofit organization, and the TCPA texts retrieved for this post do not tie the term to a particular Internal Revenue Code subsection.

Liability for violations runs through two private rights of action in the statute. Section 227(b)(3) allows a suit for actual loss or $500 per violation of the subsection (b) restrictions, whichever is greater, with up to treble damages for willful or knowing violations. Section 227(c)(5) allows a person who received more than one call within 12 months by or on behalf of the same entity in violation of the Do Not Call regulations to recover up to $500 per violation, subject to an affirmative defense for reasonable practices and procedures.

The Telemarketing Sales Rule for Charitable Solicitations

The FTC's Telemarketing Sales Rule, 16 CFR Part 310, is a separate regime with its own charitable provisions. It defines telemarketing to include a campaign "conducted to induce the purchase of goods or services or a charitable contribution," and defines a previous donor as someone who gave to the organization within the two years before the call.

Coverage depends on who is calling. The FTC's compliance guide states that "tax exempt non-profit charities that conduct their own telemarketing are not covered by the TSR," while a company "acting for profit is covered by the TSR" if it solicits charitable contributions on behalf of a nonprofit. For those for-profit telefunders, the rule provides:

• Section 310.6(a): charitable solicitations by outbound call "are not covered by" the national Do Not Call registry provision in 310.4(b)(1)(iii)(B)
• Section 310.4(b)(1)(iii)(A): the entity-specific rule still applies, barring a call to a person who has said they do not want calls made on behalf of the charitable organization
• Section 310.4(e): the caller must promptly disclose the identity of the charitable organization and that the purpose of the call is to solicit a charitable contribution
• Section 310.3(d): misrepresenting the organization's mission, tax deductibility, use of funds, the share going to the charity, or any affiliation is a deceptive practice
• Section 310.4(b)(1)(v)(B): a prerecorded call to induce a contribution from a member of, or previous donor to, the nonprofit on whose behalf the call is made must deliver the required disclosures and an automated opt-out mechanism within two seconds of the greeting

The FTC guide summarizes the last point by stating that telefunders may not place "cold" calls that deliver prerecorded messages. A for-profit firm calling for a charity can therefore be inside the TSR's entity-specific and disclosure rules while outside its national registry rule, and at the same time be making calls that the FCC's rule treats as made on behalf of a tax-exempt nonprofit.

Frequently Asked Questions