Advertising Law Tool Kit - Twelfth Edition | 2024

Venable / 21 20 / Venable Commercial Co-Ventures If a marketer conducts a promotion involving a donation based on the sale or use of a product or service (e.g., $1 of every shoe purchase benefits XYZ charity), the promotion will be subject to a number of state laws regulating charitable sales promotions conducted by commercial co-venturers (CCVs). If the commercial co-venture laws are triggered, the for-profit entity might be required to register as a commercial co-venturer (including, in some cases, obtaining a bond) in up to seven states. Additional states require the submission of the written agreement with the charity or other promotion documentation. Some state laws mandate that certain provisions be included in the written agreement between the parties to the CCV. Also, all advertising for the CCV promotion must include certain material disclosures. There have been significant attorney general actions in this area that were brought against marketers that made misleading disclosures or omitted key information. Keep in mind that some popular types of charitable promotions may not be CCVs, though the promotions may be subject to different charitable fundraising regulations. For example, one-time donations to a charity, or promises that if consumers tweet a certain hashtag, the brand will make a donation to the charity, may not be viewed as CCVs, but online round-up campaigns or other activations that allow a person to make donations based on online activities might be regulated under other categories, like that for charitable fundraising platforms. It may be desirable to explore such structures in planning a charitable promotion. Nonetheless, state CCV and promotional fundraising laws vary, so it is important to plan such promotions carefully, and it is always important Melissa Landau Steinman mlsteinman@Venable.com +1 202.344.4972 Cristina I. Vessels cvessels@Venable.com +1 202.344.4706 to ensure that the disclosures for any charitable promotion are clear, conspicuous, and accurate. When running a CCV promotion, here are some things to keep in mind: • Start as early as possible. Registrations and/or approvals in some states can take several months under normal circumstances. • Enter into a written agreement with the charity and include state-required contractual provisions, a license for use of the charity’s trademarks, and clear parameters for how the donation will be calculated and eventually transmitted to the charity. • Include the specific percentage or dollar amount per transaction going to charity in each advertisement for the CCV. Merely describing the donation generally as “a percentage of proceeds” may be considered deceptive or otherwise insufficient. • Ensure consumers are aware of the start and end dates of the promotion. Take care not to flood the marketplace with more product than could reasonably be sold during the promotion dates. • Clearly indicate any maximum and/or minimum donation amounts that have been promised to charity, if any. • Disclose the names of the sponsor(s) of the CCV, together with information on where to learn more about the charity.