Many businesses like to perform “charity marketing,” in which the business decides to wrap itself in the flag of a charity by donating a portion of their sales to said charity's cause. Though a noble idea - and one that can lead to press and sales during times like Breast Cancer Awareness Month - it can also lead to legal ramifications for the small business if not done the right way.
Before you slap the words "donating 15% of sales to XYZ Charity" on your website, before you carefully review these tips from lawyer and legal expert Anthony Verna.
Use of a company’s registered trademark requires permission. Many charities have programs to facilitate this use. Still, this use is done under a license and a business using a trademark must understand how and when to use the mark, otherwise the business may suffer from infringement and/or breach of contract.
NY requires written consent to use the name of an charitable organization.
[Tin Shingle note: Not sure what your state requires? Do your research or consult a local lawyer! It will be worth it to you in the long run.]
When for profit businesses want to team up with charitable organizations, e.g., the Susan G. Komen Breast Cancer Foundation which teams with major consumer product companies, the goals of the two organizations must be considered and coordinated.
Charitable organizations have often come under criticism for not disclosing their finances or identifying how much of the money actually goes to the charitable purposes instead of the executives’ wallets. This has been a HUGE issue for a long time. Many charitable organizations have been encouraged to report their finances to the annual questionnaire of the Council of Better Business Bureaus.
[Tin Shingle Note: What does this mean for you? Get to know a charity and don't just "pick one out of a hat" or because it sounds good. Be sure it's respectable and above board with their legal practices and where the donor money is going.]