Are Marketers the New Racial Profilers?

In February of last year Vanderbilt University embarked on a $4.5 million campaign to build and endow a Center for Jewish Life on the predominantly Christian campus of the Nashville, Tenn. school. In an effort to pare down the mailing list of thousands of the school's alumni to a more manageable - and affordable - subset of Jewish graduates who might support the effort, faculty committee members began to sift through names, picking out last names that they thought might be Jewish, and calling Jewish alumni and asking them for the names of other Jewish alumni.

Vanderbilt, which opened its center earlier this year, may have gone about the name game the hard way. Although a spokesperson for the Washington, D.C.-based Hillel -- the national Jewish college organization -- cited policy prohibiting interviews regarding fundraising practices, marketing experts say that Hillel and a number of Jewish, Catholic and other religious organizations use software that can automatically identify individual's probable ethnic background and religious affiliation. Such technology, often called ethnic screening or name analysis, can be applied to in-house databases, like Vanderbilt's alumni list, or to a rented or exchanged list available to marketers, to create targeted mailing lists of religious observers or specific ethnicities.

Lists that make assumptions based on surnames are nothing new, says Lee M. Cassidy, executive director of the Direct Marketing Association (DMA) Nonprofit Federation, but technological advances over the last several years have made such programs increasingly detailed and accurate. Including name data from the 2000 U.S. Census, such programs evaluate surnames and first names, as well as zip code and other information, to predict religion, gender, socioeconomic status, ethnicity, country of origin, and even the degree to which an immigrant is assimilated and whether or not he or she intermarried, says Ginger Nelson, president of Ethnic Technologies LLC in South Hackensack, N.J. and one of the leading providers of name analysis.

Nelson, who claims her firm has the largest surname files of any database or software firm, says that adding first name and neighborhood data gives Ethnic Technologies a 95 percent accuracy rate, compared to the 80 percent many cite as the industry standard. Surname files are updated by looking at public records, such as rosters of Olympians and checking last names with their country of origin, as well as from genealogical societies and other groups.

"When you look at the U.S. this way, you see that it is not a melting pot, but more like a tossed salad where you can pick out the pieces," she says.

Given the systematic record-keeping used in Nazi Germany during the Holocaust, many modern day Jews bristle at the notion of compiling lists of Jews, even for philanthropic causes such as Vanderbilt's. And since September 11 many American Muslims have become similarly uneasy about lists that identified them, as incidents of racial profiling increased. Those concerns go beyond the privacy issues that typically accompany marketing debates.

"There is nothing unethical or illegal in developing these lists," says W. Bruce Wrenn, professor of marketing at Indiana University South Bend and co-author of several books, including "Marketing for Congregations: Choosing to Serve People More Effectively" (Abingdon Press, 1992). "But religious marketing, by its very nature is much more controversial than other marketing." Marketing experts contend that religious not-for-profits have the right -- if not the obligation -- to use technology to target to prospective donors in the most efficient and least expensive way possible. Many of Ethnic Technologies' customers are Catholic and Christian organizations, who buy the software or rent the screened lists through licensees, although Nelson was not able to identify any of her clients for publication.

César Melgoza, president of Geoscape International Inc., the Miami-based maker of DirecTarget, a name analysis product that also boasts 95 percent accuracy figure, agrees with Nelson that use of name analysis often costs fund-raisers less than non-screened mailing lists, because the response rate is higher. Such efficient marketing is the primary advantage of using ethnic screens, but for some religious organizations, they do not outweigh the disadvantages stemming from ethical concerns.

"The fact that lists with factual information exist is not an ethics issue, but the techniques in which they are used can be an ethical gray area," says Patrick Murphy, professor of marketing at the Mendoza College of Business at the University of Notre Dame, "And I believe that non-profits should not walk close to the ethical line."

For Timothy J. Dockery, CFRE, Director of Development Services for the Archdiocese of Chicago (the arm that raises operating funds for the church, as opposed to social service fund-raising), name analysis walks too close to that line.

"We have not used database prospecting software for the purpose of identifying ethnicity or country of origin or even religion for several reasons. Most of those compiled databases use assumptions that we are not comfortable with, e.g. all Italian, Hispanic, Polish and Irish surnames are Catholic," he says. "If you are fund-raising for Mercy Home or a charity that helps poor people, you can appeal to anyone who has a heart, even if it is from a Catholic organization. But since we are looking for general operating support for the church, if we send something to someone who is Lutheran, they might get offended."

Dockery concedes that the Archdiocese and other Catholic organizations are interested in reaching out to Hispanics who, statistically, receive 10 percent to 20 percent of the volume of direct mail as the general U.S. population and therefore are more likely to open it. The church, he adds, was successful in getting Irish and Italian immigrants to donate to its causes and join its parishes generations ago, and considers this tradition to be a logical means of building on positive stereotypes that associate a particular community with a faith tradition. Dockery expects that Mexican immigrants can also be converted to the American way of religious fund-raising, despite language and cultural barriers and concerns by undocumented immigrants in giving their names to anyone, even their pastor.

"Hispanics are the low-hanging fruit from a Catholic perspective," says Alex López Negrete, president of López Negrete Communications, a Houston Hispanic marketing agency. Negrete, himself of Mexican descent and a frequent recipient of mail that he quips "assumes I am a Lady of Guadalupe fan," does not advocate name analysis as a way to attract Hispanics.

"There is a lot of interest in name analysis, but when you start thinking about it, start applying it, you start seeing the flaws," he says, citing accuracy and reinforcing negative stereotypes among them. But despite worries over oversimplification, racial profiling is not Negrete's foremost concern: He trusts that the DMA code of ethics prevents such lists from being forwarded to hate groups or other who would target ethnic and religious groups inappropriately.

Among other provisions, the DMA code of ethics allows list owners to preview direct mail being sent by list renters beforehand and to ask for the intent and purpose of the communication before names are shared. Nelson concedes that database firms can't control the behavior of their licensees, but says that they sign agreements to prevent misuse and to her knowledge there has never been a violation of them.

"This is sensitive information," concurs the DMA's Cassidy. "Liberal organizations take specific precautions to prevent their donors from getting conservative materials and vice versa. [But] the standards are very rarely violated, because a marketer who traded a list to a hate group would close themselves off to lists from then on. Word would get around pretty quickly."

T.J. Lindsay, director of research and chief financial officer for Ethnic Technologies, expects that within the next five years identity marketing will be more commonplace and intimidating to both marketers and individuals.

"Marketers have to talk to people as individuals. There is no such thing as an average Joe or Jane, Asian Americans have different values than Jewish Americans, if you know someone's ethnicity or religion, you can predict quite a few things. I think once [users] trust it, [marketers] will stick with it."

Margaret LIttman covers health, business and everything else for: Woman's Day, Mademoiselle, Teen, Sky, Chicago, Self,, Working Mother,, Crain's Chicago Business, Chicago Tribune, Business Week and others.


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