Corporate giving campaigns that involve customers are nothing new, but they are evolving and expanding. Companies used to keep it simple by stamping the words “a percentage of the retail price goes to cancer research,” on a product's package, for example. But in today's digital age, your organization is more likely to engage in a range of charitable promotions across communications channels to drive more interactive engagement with customers. As your business gets more creative with your giving campaign this holiday season, it is important to carefully navigate the applicable laws and regulations or you could find that no good deed goes unpunished.

More than 40 states within the United States, as well as Washington, D.C., regulate charitable promotion or solicitation activities. Some laws impose obligations on the charity, some on the for-profit entity involved in the activity, and some on both. A number of laws are so broad that even if a specific charity is not mentioned, or even if a purchase is not required, companies are still obligated to take steps to avoid running afoul of the laws. And it's more than just the states that are concerned – charitable activities are also regulated at the city or municipal level in some places, and some industry self-regulatory groups also have their own guidelines.

What's important for companies to keep in mind during the digital age is that these laws are not specific to the retail environment or a particular communications platform.

Dubbed “share-to-donate,” some campaigns ask customers to “like” posts on social media or tag someone to trigger a corporate contribution. Others ask customers to donate money at the register. Sometimes a sweepstakes or contest prize is a donation to the winner's choice of charity, which prompts its own special issues and compliance steps. Loyalty programs are included as well. Sometimes members will be able to redeem earned points in exchange for the company making a donation to a charity, with a certain number of points being valued at a predetermined dollar amount for the donation.

Whenever a company's marketing team wants to mention a charity or charitable purpose in advertising, such as by spreading a viral video, posting on social media, running a retail promotion, or offering donation rewards or prizing, that company should involve the legal department as early as possible to help ensure they are meeting compliance requirements. There are several regulations that companies need to consider at the onset of the idea. These businesses should:

• Analyze the rules for the three basic types of charitable activities: commercial coventurer promotions; charitable benefit promotions and charitable solicitation campaigns. Commercial coventurer promotions advertise or imply that the purchase or use of goods or services offered by the company will benefit a charitable organization or purpose, often stated as a donation of a specific percentage or dollar amount of the retail price. Charitable benefits promotions are advertising that a sale, performance, or event of any kind will benefit, to any extent, a charitable or religious organization (unless the collection and distribution of the proceeds of the performance, event, or sale are supervised and controlled by the benefiting charity). Charitable solicitation campaigns are when a business holds any property (including money) for or solicited for any charitable purpose, and is very often part of one of the other promotions described above. An example is one where the company puts out receptacles in a physical store to collect coins for donation to a charity.
• Determine if the states in which the campaign will run have registration requirements. Some states require registration as early as 15 days prior to the launch. Many of the registration forms require detailed information and multiple signatures. Therefore, it's critical to start this process early.
• Consider the digital scope of the campaign. Charitable promotion laws and influencer/endorsement rules require hashtags that make it clear that the post is incentivized.
• Create a written contract if a specific charity is mentioned. Many states require a written contract, and many also require the contract to contain particular provisions.
• Ensure that all messaging contains the proper disclosures. In addition to general advertising disclosures and disclaimers for protection of the company, many states also require that particular information be disclosed directly with messages that mention a charity or charitable purpose.
• Prepare a final accounting and keep records. Some states require records to be submitted to the state upon request and kept for a certain number of years. Also, periodic accounting during the campaign may be required.
• Determine which requirements apply to the payments the company makes to the charity. Find out if the organization is required to pay the charity with a certain frequency throughout a longer campaign and whether funds must be kept in a separate account.

Involving consumers to collect or trigger donation dollars to charities is a heart-warming way for corporations to do good while also building bonds with their customers over shared values. However, the legal requirements can complicate the giving process. Corporations need to consult with experienced legal counsel in the area who can help make clear the options for structuring the campaign based on the compliance challenges. You need to weigh the branding benefits of more interactive engagement against the cost of compliance. Crossing channels with more complex campaigns takes proper planning to meet compliance requirements.

Heather Nolan is a partner with InfoLawGroup LLP, a national boutique law firm focused on information governance – including privacy and data security matters – advertising and marketing, evolving media, technology, and intellectual property matters. She can be reached at [email protected].

Corporate giving campaigns that involve customers are nothing new, but they are evolving and expanding. Companies used to keep it simple by stamping the words “a percentage of the retail price goes to cancer research,” on a product's package, for example. But in today's digital age, your organization is more likely to engage in a range of charitable promotions across communications channels to drive more interactive engagement with customers. As your business gets more creative with your giving campaign this holiday season, it is important to carefully navigate the applicable laws and regulations or you could find that no good deed goes unpunished.

More than 40 states within the United States, as well as Washington, D.C., regulate charitable promotion or solicitation activities. Some laws impose obligations on the charity, some on the for-profit entity involved in the activity, and some on both. A number of laws are so broad that even if a specific charity is not mentioned, or even if a purchase is not required, companies are still obligated to take steps to avoid running afoul of the laws. And it's more than just the states that are concerned – charitable activities are also regulated at the city or municipal level in some places, and some industry self-regulatory groups also have their own guidelines.

What's important for companies to keep in mind during the digital age is that these laws are not specific to the retail environment or a particular communications platform.

Dubbed “share-to-donate,” some campaigns ask customers to “like” posts on social media or tag someone to trigger a corporate contribution. Others ask customers to donate money at the register. Sometimes a sweepstakes or contest prize is a donation to the winner's choice of charity, which prompts its own special issues and compliance steps. Loyalty programs are included as well. Sometimes members will be able to redeem earned points in exchange for the company making a donation to a charity, with a certain number of points being valued at a predetermined dollar amount for the donation.

Whenever a company's marketing team wants to mention a charity or charitable purpose in advertising, such as by spreading a viral video, posting on social media, running a retail promotion, or offering donation rewards or prizing, that company should involve the legal department as early as possible to help ensure they are meeting compliance requirements. There are several regulations that companies need to consider at the onset of the idea. These businesses should:

• Analyze the rules for the three basic types of charitable activities: commercial coventurer promotions; charitable benefit promotions and charitable solicitation campaigns. Commercial coventurer promotions advertise or imply that the purchase or use of goods or services offered by the company will benefit a charitable organization or purpose, often stated as a donation of a specific percentage or dollar amount of the retail price. Charitable benefits promotions are advertising that a sale, performance, or event of any kind will benefit, to any extent, a charitable or religious organization (unless the collection and distribution of the proceeds of the performance, event, or sale are supervised and controlled by the benefiting charity). Charitable solicitation campaigns are when a business holds any property (including money) for or solicited for any charitable purpose, and is very often part of one of the other promotions described above. An example is one where the company puts out receptacles in a physical store to collect coins for donation to a charity.
• Determine if the states in which the campaign will run have registration requirements. Some states require registration as early as 15 days prior to the launch. Many of the registration forms require detailed information and multiple signatures. Therefore, it's critical to start this process early.
• Consider the digital scope of the campaign. Charitable promotion laws and influencer/endorsement rules require hashtags that make it clear that the post is incentivized.
• Create a written contract if a specific charity is mentioned. Many states require a written contract, and many also require the contract to contain particular provisions.
• Ensure that all messaging contains the proper disclosures. In addition to general advertising disclosures and disclaimers for protection of the company, many states also require that particular information be disclosed directly with messages that mention a charity or charitable purpose.
• Prepare a final accounting and keep records. Some states require records to be submitted to the state upon request and kept for a certain number of years. Also, periodic accounting during the campaign may be required.
• Determine which requirements apply to the payments the company makes to the charity. Find out if the organization is required to pay the charity with a certain frequency throughout a longer campaign and whether funds must be kept in a separate account.

Involving consumers to collect or trigger donation dollars to charities is a heart-warming way for corporations to do good while also building bonds with their customers over shared values. However, the legal requirements can complicate the giving process. Corporations need to consult with experienced legal counsel in the area who can help make clear the options for structuring the campaign based on the compliance challenges. You need to weigh the branding benefits of more interactive engagement against the cost of compliance. Crossing channels with more complex campaigns takes proper planning to meet compliance requirements.

Heather Nolan is a partner with InfoLawGroup LLP, a national boutique law firm focused on information governance – including privacy and data security matters – advertising and marketing, evolving media, technology, and intellectual property matters. She can be reached at [email protected].