Don’t get fined for being good – what you need to know about advertising your donations or partnerships with charities.

Before wineries, craft breweries or distillers partner with a local or national charity to do some good, make sure you check your state’s co-venturer statutes and get properly registered if you have any intention of telling people about your beneficence.  More that 40 states have commercial co-venturer statutes on the books that regulate the manner and method of advertising your partnership with a charity, not-for-profit, 501(c)(3), etc.  The basic point of every law is to force one of the parties to register with the state, keep records, and ensure that the parties have an explicit written agreement detailing how and when payments transfer funds from you to the charity.

The key points to each state’s requirements are tricky, but some important pitfalls to watch out for:

  • Some states require the commercial co-venturer and charitable organization to have a written contract with mandated terms and many states require that parties file the contract with the appropriate state agency.
  • Most state laws explicitly require written advertisement disclosures including information on the per-unit donation amount of any goods sold, or require a statement of the gross proceeds or other remuneration that the charity is going to get.
  • Many states have reporting mandates that call for annual filings with detailed information on the monies raised, disbursed and what the commercial half of the venture kept.
  • There are states that require the parties to post a bond guaranteeing performance and deliver of the monies that get raised.

Following these laws in important, and getting it right on mediums like twitter and facebook is incredibly nuanced.  A Yoplait promotion in 1999 brought investigation from the Georgia Attorney General’s office when after advertising that Yoplait would donate 50cents for every lid it received in the mail, it forgot to disclose that the promotion was limited to $100,000.  When Yoplait received over 9.4 million lids, Yoplait’s owner, General Mills, forked over an extra $63,000 to the Breast Cancer Research Foundation to avoid legal action.

So what are some helpful tips for making sure that you’re doing good the state-sanctioned way:

  • Have a written agreement that complies with the laws of each state where you’re running the promotion/charitable effort.
  • Check the state statute to see fi you need to get a bond, whether you can state the donation amounts in terms of per-unit donations, whether you need to disclose a maximum donation amount, and if its too onerous, check to see if a less onerous alternative might be had by just making a flat donation.
  • Make sure you have all the required disclosures for commercial co-venturer information.
  • Don’t equivocate in the advertising, make sure nothing is misleading or confusing about the terms of the donation.
  • Have accounting and inventory tracking systems that can accurately keep records about the relevant sales and maintain a proper accounting.

Ashley Brandt

Hi there! I’m happy you’re here. My name is Ashley Brandt and I’m an attorney in Chicago representing clients in the Food and Beverage, Advertising, Media, and Real Estate industries. A while back I kept getting calls and questions from industry professionals and attorneys looking for advice and information on a fun and unique area of law that I’m lucky enough to practice in. These calls represented a serious lack of, and need for, some answers, news, and information on the legal aspects of marketing and media. I've got this deep seeded belief that information should be readily available and that the greatest benefit from the information age is open access to knowledge... so ... this blog seemed like the best way to accomplish that. I enjoy being an attorney and it’s given me some amazing opportunities, wonderful experiences, and an appreciation and love for this work. I live in Chicago and work at an exceptional law firm, Goldstein & McClintock, with some truly brilliant people. Feel free to contact me at any time with any issues, comments, concerns… frankly, after reading this far, I hope you take the time to at least let me know what you think about the blog and how I can make it a better resource.

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