4 Things to Know When Giving Back

Ensuring that your giving initiatives are covered under cause marketing compliance is crucial to running a responsible campaign. Discover how ShoppingGives is helping eCommerce and omni-channel businesses manage cause marketing compliance with ease.

4 must-haves when donating a portion of sales to charity

It’s incredible to see so many people and businesses that are looking to help in times of need in any way they can. We hope to make it easy for brands to understand the requirements that are necessary to both protect consumers and to ensure they run a transparent and responsible campaign when donating a portion of sales to nonprofits.

Your giving will inspire and engage your customers, beyond their purchase. Making sure that your giving campaign is organized and compliant allows you to focus on your brand’s message and the good you’re doing as a company.

1. Register and File the Required Agreements

Commercial Co-Venture Agreements “CCV”

Are you advertising that the purchase of goods, use of services, or any other transaction of value will benefit a charitable organization? If yes, many states require you to enter into a written Commercial Co-Venture Agreement with the charitable beneficiary.

In addition, multiple states require you to register your company as a “Commercial Co-Venture” before the campaign goes live. Fines and penalties can result from carrying on a campaign without registering.

ShoppingGives complies with state CCV laws for charitable sales campaigns that are conducted using our platform so you can donate to any 501(c)(3) charity in good standing with the IRS without worrying about CCV compliance.

2.Show the dollar amount or the percentage of the purchase price being donated to charity before a customer checks out.

Consumer Transparency and Protection

The consumer should understand before purchasing a product how the purchase will benefit charity. Better Business Standard 19 and the New York Attorney General have made it clear that the amount being donated to charity based on the purchase should be explicitly stated or shown to the consumer before they purchase. For example, if 10% of the purchase price of a $100 item will be donated to charity, the customer should be informed before finalizing the purchase that $10 (or 10% of the purchase price) is being donated when the purchase is completed.

Statements such as “we will donate x% of profits” or “x% of net proceeds” are vague and do not provide transparency to the purchaser about how much will be donated to charity. The customer does not know what your company’s “net proceeds” or “profit” will be from the sale. Therefore these phrases are strongly discouraged by charity watchdogs and regulators. Well, how about “10% of sales will be donated to ABC Charity”? While this maybe okay for general marketing, you should still show the customer the exact amount their purchase will benefit to charity before they complete the purchase.

ShoppingGives calculates the specific dollar amount being donated to charity for each product. You as the brand can choose the amount of each product’s purchase price that will benefit charity, whether as a dollar amount or percentage. The final donation amount (pre-tax, pre-shipping, post discount) is displayed to the customer before and after the purchase.

3.Get Permission to use Nonprofit Names and Logos.

® Trademarks

Nonprofits work hard to become synonymous with their causes and missions. Just like building any brand, this requires a large investment of time, resources and money. Nonprofits protect the brands they’ve built and enforce trademark and name use the same as any business.

Nonprofits will allow logo and name use to their partners, but the minimum donation amount can be a large barrier to forming an official partnership. It is imperative that you receive permission before using a nonprofits name or logo in your marketing.

ShoppingGives technology partners have access to top nonprofit name and logo use within our technology and in marketing through the established partnerships that ShoppingGives has arranged. This list of nonprofit partners grows monthly. If there’s a specific nonprofit that we can help you form a relationship with we’d be happy to introduce the nonprofit to ShoppingGives and help them feel confident in our transaction verification technology and receiving 100% of funds allocated to their mission.

4.Keep Detailed Records.

Maintaining Records

Records to be maintained include:

  1. Sales journals that specify amounts donated on a per unit basis
  2. Adjustments to sales (refunds or returns) that result in donation adjustments
  3. Donation receipts from payouts to nonprofits
  4. Commercial Co-Venture contracts and campaign results. All these records should be maintained for a minimum of 7 years in case of a financial audit.

When running a campaign creating impact, you deserve credit for your efforts and the funds you provide to further a nonprofit’s mission. Be sure to keep detailed records for your analysis, tax-deductions, and in case of future audits.

ShoppingGives reporting suite makes it simple to access a summary of all transactions, donations, and donation receipts created through our technology. ShoppingGives technology automatically makes adjustments to sales and donations if a refund or return occurs on an order.

Have a question?

Discover how ShoppingGives is helping businesses connect cause with commerce confidently. If you have a question about our cause marketing compliance coverage, please contact us at support@shoppinggives.com.

Haven’t seen our donation app, yet?

If you’re interested in learning more about our end-to-end donation management app, please visit our site.

*Disclaimer: This is not legal advice.

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