The law on non-profit promotions/marketing by causes and „commercial joint ventures“ is developing. There`s nothing wrong with making a deal with a for-profit company for a nonprofit in order to get a percentage of the revenue. However, it would be naïve to ignore the fact that for-profit companies can benefit from consumers` motivation to buy goods or services by thinking that they are donating to a non-profit organization. Studies show that consumers are motivated to make purchases when they think that a percentage of revenue is being used for a „good cause,“ hence the name „cause marketing.“ Therefore, public regulators have an interest in protecting nonprofits from exploitation and protecting consumers` expectations of where the money will land. Describes definitions and regulatory requirements for Canadian charities involved in cause marketing. Provides a breakdown of the main areas to consider before entering into a cause marketing agreement and how to manage fundraising revenue throughout the engagement. „New York Attorney General Eric T. Schneiderman has developed these best practices to promote transparency in marketing for cause and ensure that consumers are well informed and that charities receive what they have been promised.“ Cause Marketing (or commercial joint venture) is a marketing partnership between a company and a non-profit organization that raises funds for the nonprofit organization while promoting a product, service or service of that company. If the organization has formally entered into a cause-related marketing agreement with a third party, it must indicate, in all related materials it produces, how the organization benefits from the sale of products or services and what minimum or maximum amounts must be paid under the agreement. If there is no minimum amount to pay, the organization should disclose it. CRA information about receipts for engaged marketing Engaged marketing is a fundraising activity under the issue a registered charity (or other qualified donee) collaborates with a for-profit partner to promote the sale. This cooperation is by no means limited to large multinationals and charitable organizations. Over the past five years, our law firm has collaborated with numerous non-profit organizations to enable successful marketing campaigns with local and national businesses.
Note that cause marketing is a regulated activity in several countries. Typically, state laws require nonprofits to submit a copy of the contract that governs the agreement prior to sales. As state laws vary, your nonprofit should be familiar with the laws governing the registration of nonprofit advertising activities in general, and in particular those that govern commercial joint ventures and/or cause marketing. Non-registration can result in fines and even criminal penalties in some states. Conclusion: Do you know the law of your country and document the agreements made with the for-profit company so that sales promotion is responsible. While cause marketing campaigns can be structured in different ways, the most traditional and regulated model is a commercial joint venture…