Cause marketing is an increasingly popular and powerful way for companies to align with social good. However, these campaigns are highly regulated at the state level by laws governing charitable solicitation and consumer protection. Navigating the legal landscape is essential to ensure compliance, protect against misleading advertising, and ensure that the intended funds reach their nonprofit beneficiaries.
Here are five of the most frequently asked questions on cause marketing compliance that we are asked.
- When and where must a company be registered to conduct a charitable sales promotion (also known as a CCV)? What about the nonprofit beneficiary?
- Does a company need to register as a commercial co-venturer in every state that has a CCV registration requirement if it’s only conducting a charitable sales promotion on its website?
- What advertising disclosures must be included in a charitable sales promotion, and how can companies run into issues with their disclosures?
- What key strategies can nonprofits use to navigate unrelated business income tax (“UBIT”) issues during their cause marketing campaigns and corporate partnerships?
- What options are available for companies to engage with nonprofits that offer public visibility but are not subject to state CCV registration and reporting requirements?
Navigating the compliance landscape of cause marketing can be complex. Still, the core goal remains the same: to ensure transparency, protect consumers, and make sure companies fulfill their commitments to nonprofit partners.
Cause marketing is powerful because it allows consumers to make a positive impact through their purchasing decisions. By proactively addressing registration requirements, providing clear disclosures, and strategizing with your nonprofit partner on the optimal campaign structure, companies can ensure that their campaigns are both effective and compliant with legal requirements. For more detailed answers to these questions and additional resources about cause marketing, visit the website of our long-term partner, Engage for Good — the leading community where cause meets commerce.
