Boost Awareness and Fundraising with Cause Marketing
Make Sure Your Not-For-Profit is Aware of the Benefits of Cause Marketing, as Well as Its Pitfalls
Author: Joe Giso
Cause marketing is a collaboration between a not-for-profit organization and a corporation generally designed to create shareholder and social value, as well as raise funds and awareness around a specific issue that speaks to the shared values of both organizations. While there are many benefits to both the nonprofit and the corporation, nonprofits should exercise great care when embarking on a cause-marketing program.
There are many registration, reporting and disclosure requirements that grow in complexity with the geographic scope of the program. Opportunities for deceptive trade practices, false advertising and consumer fraud have made state attorney generals wary.
If you are considering a cause marketing campaign for your not-for-profit organization, here are a few issues you should think about:
- What is the definition of a commercial co-venture in your state?
- What are the filing requirements for a commercial co-venturer in your state?
- Is the income generated subject to unrelated business income tax (UBIT)? Do you have a written contract that includes any statutorily mandated provisions?
- Are you avoiding providing any endorsement or personal services when licensing your charity’s logo and name?
- Have you reviewed marketing materials carefully for required disclosures and to ensure compliance with applicable state disclosure laws?
For more information on the tax implications of a commercial co-venture or cause-marketing campaign, contact Joe Giso, Tax Director in the CBIZ Tofias Not-For-Profit & Education Practice, at JGiso@cbiztofias.com or 617.761.0623. You may also contact any member of your Not-for-Profit & Education Practice team here.