Advertising About Charities and Charitable Causes: It’s the Details that Matter
“Our company will support the Charity.” “A percentage of proceeds go to cancer research.” “With every purchase, a donation goes to Charity.” Stating or implying that a purchase or other action by a consumer will benefit a charity or charitable purpose is appealing to attract consumers’ attention, but this type of messaging needs special attention to detail from the legal team. A large majority of states have charitable promotion laws with specific requirements for a for-profit company that runs this type of campaign. In fact, some states’ laws are written so broadly that even if a specific charity is not mentioned, or even if a purchase is not required, certain legal compliance steps may still be triggered. Also, the laws are not specific to a particular platform, so regardless of whether your marketing team plants a viral video, posts on social media, or runs an in-store retail promotion, legal should be involved as early as possible. Regulators are paying attention: Ohio’s Attorney General recently enforced Ohio’s law on the issue for failing to make proper disclosures and take other compliance steps, and required the company to take even more onerous steps, such as submitting materials to the AG’s office on an ongoing basis. The details of the particular message and structure of your campaign will dictate which exact requirements apply. Here are just some of the requirements to consider when you plan to mention a charity or charitable purpose in your advertising:
- Analyze which states’ registration requirements apply. Consider the scope of the campaign and the platform where it will run. A number of states have registration requirements – some as early as 15 days prior to the launch. Many of the registration forms require detailed information, so this process should be started early.
- Have a written contract in place if a specific charity is mentioned. Many states require a written contract, and many also require the contract itself to contain particular provisions.
- Ensure that the message contains the proper disclosures. In addition to general advertising disclosures and disclaimers for protection of your company, many also states require that particular information be disclosed directly with these types of messages.
- Prepare a final accounting and keep records. Some states require records to be kept for a certain number of years and that copies be provided to the state upon request.
- Determine which requirements apply to the payments your company makes to the charity. Find out if you are required to pay the charity with a certain frequency throughout a longer campaign and whether funds must be kept in a separate account.