Advertising Law Tool Kit 13th Edition 2025

Venable / 21 20 / Venable Charitable Fundraising Platforms If a brand provides a website or other internet-based application through which it performs, permits, or otherwise enables cause-related marketing and charitable fundraising, the brand will be regulated as a charitable fundraising platform. Cause-related marketing is generally regulated by states’ charitable solicitation laws. Historically, only companies that acted as “commercial coventurers” by conducting “charitable sales promotions” were broadly regulated (see pages 22-23 ). Now, though, amendments to some of these laws mean that charitable fundraising platforms are subject to extensive new rules in at least a few states. Any brand that conducts, allows, or enables different types of online fundraising, such as charitable sales promotions, free action campaigns, and customer donation programs, might be required to register and file annual reports as a charitable fundraising platform. The entity may also have to obtain written consent from charities to solicit online. Strict donation accounting rules may apply, like having to keep charitable funds in an account separate from a brand’s other funds, transferring donations to charities according to new timelines, issuing tax donation receipts to certain customers, and verifying the “good standing” of any charity for which funds are raised on the platform. Advertising on a charitable fundraising platform 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. Popular types of cause-related marketing that were traditionally regulated lightly, if at all, are now covered by charitable fundraising platform rules. For example, online point-of-sale fundraising appeals like roundups, add-a-dollar for charity requests, and other customer donation programs are now covered by these rules. So are activations that allow customers to select the charity to receive a company’s donation based on the consumer’s purchase or other actions in most instances. The regulation of promotional fundraising is in flux, so it is important to plan such online campaigns carefully, and it is always important to ensure that the disclosures for any charitable promotion are clear, conspicuous, and accurate. When running any online cause-related marketing campaign, keep in mind: • Start as early as possible. Preparing a company’s back-end infrastructure to properly operationalize the applicable rules can take several months. • Register as a charitable fundraising platform where required. • Verify the “good standing” of each charity listed on your platform before any campaign starts and again before any donation is transferred. • Obtain consent from the charity before fundraising on its behalf on your site or comply with the requirements for listing charities that have not consented to appear on your site. Agreements with charities should include various state- required contractual provisions. • Hold charitable funds in a separate account. • Remit funds directly to the charity or have in place a contract with a third-party grantmaking charitable organization that will operate as a charitable trustee for the funds raised. • For customer donation programs, send tax donation receipts to donors within five business days after each donation is made. • For charitable sales promotions occurring online, consider whether to limit the number of charities that benefit from your brand’s campaigns to six or fewer per year, to minimize certain CCV-related compliance obligations. • Prepare proper disclosures indicating donations are made to the recipient charity; that the charity may not receive donations in specified situations (e.g., they fall out of “good standing”); the maximum length of time it takes to send the donation to a recipient charity; the fees or other amounts, if any, deducted from or added to the donation that are charged or retained by the charitable fundraising platform, other than digital payment processing fees; and a statement as to the tax deductibility of the donation. Cristina I. Vessels cvessels@Venable.com Melissa Landau Steinman mlsteinman@Venable.com