Posts Tagged: Charity

Let’s Review Some Tricky Commercial Co-Venture Issues

From a quick Google search I see articles citing “at least 22” states have commercial co-venture laws; “over 30 states have laws governing commercial co-ventures”; “currently 27 states define ‘commercial co-venturer’ in their solicitation laws”; “about 20 states” have commercial co-venture laws.  You get the point.  This can be a tricky area of the law.  For the record, 23 states have specific statutes pertaining to commercial co-ventures/venturers and additionally, the Illinois “charitable trust” statutes would apply to commercial co-venturers.

Many of these commercial co-venture statutes are uniform in their definitions and applicability.  However, there are always grey areas where the practical doesn’t always fit with the statutory.  I’d like to review a few of these areas with questions frequently posed:

If we only ask consumers to “like” our Facebook page to trigger a donation to charity is that a commercial co-venture?

Perhaps in some states.  The vast majority of state statutes expressly require a purchase to trigger a donation.  But a few states (AL, MA and MS) have statutes drafted which could encompass non-purchase solicitations.  By their terms, these states’ laws would apply whenever a company “conducts, promotes, underwrites, or sponsors a sale, performance or event of any kind which is advertised and which will benefit to any extent a charity.”  See AL Code § 13A-9-70(A); Mass. L. ch. 68, § 18; Miss. Admin. Code 1-15-1.01. (more…)

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Cause Marketing Lessons from the Wounded Warrior Project Scandal

Your company just made a major announcement that it is partnering with a charity that you now find is involved in a scandal. What can you do?

The recent ousting of The Wounded Warriors Project CEO and COO amid allegations of lavish spending on travel, conferences and public relations requires a company to examine their cause marketing campaigns. While there is no need to throw the baby out with the bath water – recent studies still confirm that consumers, and in particular Millennials, strongly support buying from companies associated with a cause* — picking the right charity is critical.

*For example, according to the 2015 Cone Communications Millennial CSR Study, “More than nine-in-10 Millennials would switch brands to one associated with a cause (91% vs. 85% U.S. average).” (more…)

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“All Profits to Charity” – How Much is That? A Brief Commercial Co-venture Lesson

You’ve heard this sales pitch before. Its cousins are “A percentage of proceeds to charity” and “A portion of the proceeds to charity”. Do you really know how much will be donated? The short answer is no. I’ve read estimates that net profits on a pizza pie are typically 4% to 8%, on new cars around 1-2%, and in the clothing industry profit margins range from 4% to 13%.  The Wall Street Journal has reported that McDonald’s makes 6 cents on a one-dollar hamburger. So if a brand tells you it’s giving “all of its profits to charity,” you need to know where’s the beef. (more…)

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