Charitable sales promotions (a/k/a “CCV promotions”) are a popular cause marketing strategy for engaging customers motivated to support a cause through their purchases. State charitable solicitation laws regulate CCV promotions by imposing specific registration, reporting, contract, and advertising disclosure requirements on businesses conducting these promotions. 

CCV Registration and Reporting  

Companies that conduct these promotions nationally must register as a “commercial co-venturer” in seven states.¹  The registration and reporting process comprises a few key components

• • Annual registration of the business. 
  • Filing of a surety bond.
  • Filing of the contract and/or solicitation notice
  • Filing of a campaign report.

See this chart of commercial co-venturer state registration and reporting requirements.  Note that the nonprofit beneficiary of these promotions must be registered to solicit in the states where the promotion is conducted, and also has certain reporting obligations regarding the promotion.  

Contract Provision Requirements

The agreement between the business and nonprofit must include several contract provisions, including sales and donation estimates and state-specific compliance language.

Advertising Disclosure Requirements

CCV advertisements must include specific information about how a customer’s purchase will benefit a nonprofit organization. These requirements are most clearly articulated in industry best practices such as the BBB Wise Give Alliance’s Standards for Charity Accountability.  Notably, advertisements must include the percentage or dollar amount of the purchase price that will be donated to the nonprofit. Vague language like “a portion of proceeds from the sale of each product will go to ABC Nonprofit” does not comply with the disclosure requirements.

There are compelling reasons CCV campaigns are a widely used marketing strategy. CCV promotions allow you to directly involve consumers in the charitable impact while buying products and services they are (typically) already planning to purchase.  A well-designed promotion can make a brand’s product stand out among competing products. According to Edelman’s 2023 Trust Barometer, 63% of people buy or advocate for brands based on beliefs and values.  Unlike some of the alternatives discussed below, CCV promotions are the only campaign structure in which the customer’s purchasing decision directly supports the nonprofit partner.  This may be why hundreds of businesses choose to engage in CCV promotions every year.  The compliance requirements are very manageable with a bit of guidance and support (including resources like this article and those available on the Engage for Good website). Moreover, several registration service providers offer CCV registration services so you can focus on making sure your promotion is a success.  

While there are compelling reasons to conduct CCV promotions, a few situations suggest that a CCV promotion may not always be the ideal structure. Consider the following scenarios: 

1. The total anticipated donation amount is relatively small and may not justify the compliance costs and burdens associated with the promotion structure. 
2. The promotion is national in scope, but your nonprofit partner does not typically fundraise nationally (and may not even be based in the U.S.) and may not be prepared to register to solicit nationally just to be the beneficiary of your promotion.²   

For these and other reasons, companies may want to explore alternatives to the CCV promotion structure.

CCV Promotion Alternatives

Below are a few of the most common CCV promotion alternatives that allow a business to still actively partner with a nonprofit in ways that engage its customers and the public and publicly communicate its support for an important cause that aligns with its brand values, but without being subject to CCV compliance requirements. 

“Proud Supporter” Corporate Donation 

The closest alternative structure to a CCV promotion is if a business commits a fixed donation amount to the nonprofit and is granted the right to include language on its product packaging or other point of sale marketing materials about its support of the organization. For example, “Our Company is proud to support ABC Nonprofit with a $50,000 donation to support the planting of 50,000 trees.”  

To avoid being subject to CCV regulation, the marketing language should not state or suggest that the customer’s purchase of the product will trigger a donation to the nonprofit. Nevertheless, the business can still publicly communicate its support for a cause important to the brand while financially supporting the organization and raising public awareness for the cause, which helps garner positive goodwill for the brand and publicly reflect its brand values and commitments.   

Point of Sale Customer Donation Campaign

With over $5 billion raised through customer donations at retail checkout counters, it’s no wonder point-of-sale fundraising campaigns are a popular and effective way for companies to raise funds for their favorite charitable causes. Some companies have even added incentives by offering coupons or discounts to customers who make donations at checkout.  

If this type of campaign is conducted in stores nationwide, the nonprofit must be registered to solicit contributions in all applicable states. In addition, companies conducting these campaigns online at checkout must register as a “charitable fundraising platform” in California (and starting in 2026, in Hawaii) if the campaign includes online customers in those states.   An agreement should be established with the nonprofit, granting the company permission to solicit contributions from the public on its behalf. The agreement should outline the agreed-upon terms and include the solicitation dates, the states where they will be conducted, and the timing for transferring the collected donations. 

Matching Gift Campaign

Matching gift campaigns are popular fundraising strategies used by nonprofits to incentivize public donations through contributions made by one or more “match donors.” In a traditional matching gift campaign, a match donor pledges to match public donations dollar for dollar, often up to a specified donation cap and/or for a set time period.   With this type of campaign, the amount of the pledge that the “match donor” must pay is contingent upon the total donations received from the public in response to the campaign.  Companies can be powerful multipliers of public support by partnering with nonprofits to match donations made by their supporters.  Companies can also match public donations raised through customer donation campaigns that the business conducts at checkout.

When conducting matching gift campaigns, ensure you accurately describe how the campaign works, including the campaign period, the match amount (e.g., dollar for dollar), the method of donating that will trigger the donation (e.g., “donations made at checkout at Company stores during Earth Month” or “donations made through a unique matching gift campaign URL, like Company.NonprofitWebsite.org”), and any donation cap (e.g., up to $50,000).  Read this article for additional legal considerations in matching gift campaigns. 

Free Action Campaign

Free action campaigns involve donating to a nonprofit, triggered by actions taken by customers or other members of the public.  A purchase or use of the company’s products or services is not required. Free action campaigns allow a company to creatively engage the public, including: (1) signing up for your newsletter; (2) watching a short video; (3) liking, commenting on, or sharing a social media post; or (4) taking a survey. These actions can help generate greater awareness of your company, the cause, or both.  

The structure of free action campaigns is similar to CCV promotions because donations are triggered by specific actions that must be tracked. As such, the structure of contracts and disclosures for free action campaigns is also comparable to CCVs in establishing transparency and accountability. Currently, companies engaging in these campaigns online must register as a “charitable fundraising platform” in California (and starting in 2026, in Hawaii) if the campaign includes online customers in those states. 

Find the Right Campaign Structure for Your Business

Companies have numerous creative options for partnering with nonprofits through financial support and public awareness, while also building consumer loyalty for their brand and directly incentivizing product sales in the case of CCVs. Don’t let concerns about CCV regulation prevent you from finding the right win-win partnership with a nonprofit partner. 

Determining whether a CCV campaign structure is the most effective option requires considering your business goals, parameters, and constraints, as well as a practical understanding of compliance requirements.  It may be more achievable than you think!  If you conclude that a CCV promotion is not the right fit, consider exploring another creative way to partner with a nonprofit that will engage your customers and the public, generating significant positive goodwill for your brand while supporting an important cause.

1 The seven states that require companies engaging in these promotions (the companies are defined as “commercial co-venturers”) are: Alabama, California, Hawaii, Illinois, Massachusetts, Mississippi, and South Carolina.  California’s CCV registration requirement is optional, in that companies can follow certain contract and accounting requirements in lieu of registering.  Moreover, California’s new law governing charitable fundraising platforms requires companies conducting online CCV promotions to register as a charitable fundraising platform instead.  Illinois’ charitable solicitation law does not define the term “commercial co-venture,” but the state has taken the position that companies engaging in charitable sales promotions must register as “charitable trusts” if they generate more than $4,000 donations in a 12-month period.  Read this article to learn how to evaluate what state laws apply to an online-only CCV promotion.

2 Nonprofits soliciting charitable contributions nationally must register in about 38 states.

The post Should My Company Engage in a Commercial Co-Venture (CCV) Promotion?[br] <i>Strategic Considerations and Alternatives</i> appeared first on Perlman & Perlman.