8 Commercial Co-Venture Regulations

June 7, 2016       The NonProfit Times      

American demand for cause marketing is stronger than ever, despite a marketplace saturated with cause-related programs and messages.

This finding, from a Cone Communications Social Impact Study, was shared at a Cause Marketing Forum event by Terri Seligman of Frankfurt Kurnit Klein & Selz and Ed Chansky of Greenburg Taurig.

One result of this popularity is that state governments are devising regulations to ensure both that for-profit companies are not trading on the name of a charity without any real benefit to the charity and that donors will be protected from fraudulent practices.

Although states vary regarding which restrictions they impose, Seligman and Chansky said the following information is generally required by state regulations:

* Name and address of the commercial co-venturer (that is, the business, or CCV) and the nonprofit organization.

* A contact person for the CCV and for the nonprofit.

* A list of CCVs involved in the promotion.

* The CCV’s articles of incorporation.

* A list of the CCV’s officers and directors.

* The CCV’s federal tax identification number.

* A description of the campaign.

* Disclosures in advertising: the name of the nonprofit, the name of the CCV, the donation amount/percentage per purchased product, any minimum or maximum donation amounts, the dates of the campaign.