6 requirements of a commercial co-venture

July 23, 2014       The NonProfit Times      

One popular form of cause-related marketing is an agreement between a nonprofit organization and a for-profit entity, called a commercial co-venturer (CCV).

During the 2014 Cause Marketing Forum, Tracy Boak and Karen Wu of Perlman and Perlman, LLP of New York City discussed CCVs, noting that many states have strict laws regulating them and about 20 states have laws requiring commercial co-venturers to obtain the written permission from the leadership of the nonprofit whose name will be used during the sales promotion.

No two states are identical in what is required and what they regulate. In general, there are certain areas of concern that nonprofit managers must take into account.

Following are the most commonly required provisions that must be included in a CCV agreement:

  • The goods or services that are to be provided to the public as part of the promotion;
  • The geographic territory of the promotion;
  • The actual or estimated dollar amount or percentage of the purchase price or sales that the charity will receive;
  • The terms (that is, start and end dates) of the promotion;
  • The provision of a final accounting to the charity; and,
  • The date(s) when the funds will be transferred to the charity.
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