Is Your Campaign Really a Commercial Co-Venture?
Launching A Successful Commercial Co-Venture
A portion of our proceeds go to……
For every $10 you spend here, we’ll donate $1 there…
10% of profits go to…..
Common enough sayings for promotions in regular times, but these kinds of promotions are even more prevalent now that there is truly a common cause. With so many folks in need, and so many businesses rising to the occasion to help, we see more and more brands focus on offerings that also create a donation opportunity to a charitable organization.
These kinds of promotions, when a for profit entity represents that buying their product or service will benefit a charitable organization, are called Commercial Co-Ventures. Commercial Co-Ventures are highly regulated by federal and state laws due to the consumer protection issues involved. For example, the for-profit entity must ensure that the money or donation going to charity is actually going to that charity and that the consumers are adequately informed about what portion of the proceeds go to the charity.
State laws vary widely, so it’s important to get legal review before setting up or participating in a Commercial Co-Venture. Failure to comply with the regulations could result in large fines and worse, negative PR.
Below are a few tips for launching a successful Commercial Co-Venture (“CCV”):
Know your state laws
All fifty have laws pertaining to CCV’s, some have registration requirements, some require certain obligations after the CCV is finished. Get your filings done within the time frames required by the applicable states to ensure that you can actually run the promotion.
Have an agreement
It’s essential to have an agreement between the company and the charity that details the dates of the campaign, the amount or percentage being donated, the geographic scope, the schedule for donations to be transferred and a host of other terms that are normally found in CCV agreements, including information about tax treatment of the donations.
Advertise properly
There are strict advertising requirements for CCV’s. You may be required to advertise the length of the campaign, the amount being donated, the charitable purpose and many other pieces of information about the campaign, depending on what state and what media you choose.
In the effort to do good, make sure you’re doing it well. CCV’s, while an effective tool for brands and charities alike, is also highly regulated. Regulators are paying close attention to the details of these campaigns so brands and charities looking to further their causes, should do so as well.