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Brands operating websites or apps for cause-related marketing and charitable fundraising are increasingly regulated as charitable fundraising platforms under state laws. Historically, regulation focused on "commercial coventurers" conducting "charitable sales promotions."
However, amendments now extend strict rules to online platforms engaging in activities like donation programs and free action campaigns. Brands may need to register, file annual reports, and obtain written charity consent. Funds must often be held in separate accounts and transferred promptly, and tax receipts must be issued within five days. Campaigns must verify charities' "good standing," ensure clear disclosures, and adhere to donation accounting rules.
Additionally, advertising must include material disclosures. Given evolving regulations, early planning, compliance with state-specific laws, and accurate disclosures are essential for successful campaigns.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
