Cause Marketer's Commercial Co-Venture Laws Directory
What you see below is a resource rich clickable map that contains state by state guidance on local commercial co-venture laws.
Disclaimer: Resources contained in this map may vary in accuracy and timeliness. Many are links to State Legislatures, Attorney Generals Offices, Departments of Justice and Secretary of State Offices.
First a note about charitable solicitation and commercial co-venture laws:
Not all states require nonprofits to register their fundraising efforts. I am not a legal expert, FYI. That being said, legally commercial co-venture laws are different, generally requiring much less documentation than what is required for charitable solicitors. Professional Solicitors for example, are required to register, which often involves fees, in all but 6 states and the District of Columbia.
Commercial co-venturers, which is the category most cause marketers fall into (as of 2017) are required to file and report in only a handful of states, including Alabama, California, Hawaii, Massachusetts, Mississippi and South Carolina among them.
To learn more about charitable solicitations, take a look at this IRS article.
Definitions: What are the Different Fundraising Designations?
The lack of a unified legal doctrine around fundraising and commercial co-venture laws make establishing a cause marketing partnership a bit intimidating. Several states participate in Unified Registration, but each state needs your specific attention to ensure you are in compliance with local laws.
I’ve assembled some definitions to summarize the most common fundraising types in order to help clarify what category a business or nonprofit may fall in.
Here are three of the most common fundraising types:
- Fundraising Counsel– Is a fundraising consultancy or firm which provided advice, strategy, resources, techniques, contacts, and leads and generally guides, advises and trains a nonprofit to optimize and obtain better results in their fundraising goals. Fundraising counsels must register with the nonprofits they serve in the majority of States.
- Professional Solicitor- Professional solicitors are for-profit businesses that nonprofits may hire to solicit funds on their behalf. These agencies often seek direct donations by way of phone campaigns, email campaigns, direct street-level solicitation and other means. Professional Solicitors are also required to register in the majority of States.
- Commercial Co-Venturers- A company engages in commercial co-ventures when they agree to give a percentage of sales to a nonprofit or charity. This for-profit/non-profit partnership is beneficial for the nonprofit and the business in a variety of ways. The nonprofit lends credibility, trust, and cause-related marketing power to the company while potentially reducing the partner company’s advertising expenses. What the non-profit gets in return is a percentage of the sales of products, resulting in often substantial revenues to the nonprofit. That’s what the Support4Good Web App (coming soon) is all about. Commercial co-ventures are not as heavily regulated as the previous two models, however, laws governing these relationships change frequently. There are at least two States that require bonding in addition to registration.
A commercial co-venture partnership can take on a variety of creative forms- branded advertising is one route that is most visible and used by the biggest and most powerful brands in the world. But there are other methods, like affiliate partnerships that allow nonprofits to control the advertising and sometimes even the branding on an e-commerce shop
List of Contacts For Inquiries
Given that laws are constantly changing with regard to these public/private partnerships, the best way to be sure you are going into a new venture correctly is to contact the state you will be doing business in, as well as the state in which your business has nexus and complete any required registration before you initiate a new fundraising campaign.