5 legal issues and transparency ideas

August 19, 2014       The NonProfit Times      

Cause marketing arrangements between nonprofits and for-profits have a history of providing benefits to both parties, but they also have a history of problems when there is a lack of clarity about each entity’s responsibilities and expectations.

During the 2104 Cause Marketing Forum, Tracy Boak and Karen Wu of Perlman and Perlman, LLC in New York City, said that another aspect of commercial co-ventures (CCV) is that disputes and complaints have led many state governments to begin extra levels of scrutiny of CCVs.

Much of this scrutiny regards transparency, both about being forthright that the CCV is for the nonprofit and the business and about what is done with money collected.

There is no one-size-fits-all list of requirements and regulations, so it would be wise for any nonprofit marketer to look into the laws of any particular state.

In general, however, Boak and Wu said that the Attorney General of the State of New York has established a set of best practices that might prove helpful as a guideline.

The New York AG’s best practices are:

1. Clearly describe the promotion.

2. Allow consumers to easily determine donation amount.

3. Be transparent about what is not apparent.

4. Ensure transparency in social media.

5. Tell the public how much was raised.