How To Legally Partner with A Non Profit Organization
by NicoleD, Former Moderator
- Created: July 7, 2010, 9:06 am
- Updated: April 30, 2012, 6:59 pm
What is Cause Marketing?
You may not be familiar with the term;cause marketin-, but chances are yo-ve experienced it' if not with your own business, then as a consumer. Have you ever added $1 to your grocery bill for a charitable donation? If so, yo've participated in a cause marketing campaign.
Cause marketing is a mutually-beneficial branding partnership between a for-profit business and a non profit organization. The win-win attributes of a cause marketing campaign enable the non profit to receive donations and free advertising from the partnership, while the for-profit business enhances its image, and is ultimately able to generate more sales as a result.
Cause marketing is not the same as corporate giving. Corporate giving is charitable activity, usually a tax deductible donation, while a cause marketing partnership is focused on a branding relationship. Read more about Charitable Giving and the Tax Benefits for Small Businesses at Business.gov.
How to Partner with a Non profit
If you are interested in partnering with a non profit organization for a cause marketing campaign, you will need to do your research and create a detailed a marketing plan.
1. Choose a non profit partner. Be selective when researching potential non profit partners.
- Select a charitable cause that you or your community has a connection to. Bigger does't necessarily mean better' lesser-known or local non profits are just as in need as national organizations.
- Verify an organization's tax-exempt status and eligibility to receive tax-deductible charitable contributions by asking for an IRS-issued letter recognizing it as tax-exempt, or confirm the non profit status by calling the IRS (toll-free) at 1-877-829-5500 or search for charities at IRS.gov.
- Visit the Better Business Burea's website for a listing of national charity seal holders and inquire about charity complaints and reviews.*
- Keep in mind that new, small, or local charities may not be listed on national registries like the BB's, but are still legitimate organizations. Use this charity checklist from the Federal Trade Commission (FTC) to help you evaluate the organization.
2. Create a detailed marketing plan. As with any marketing effort, developing a solid marketing plan is one of the most important things you can do to ensure you are spending time and investment wisely.
- Learn how to develop a marketing plan on Business.gov.
- Your plan should clearly outline the terms of your partnership. If you plan to donate a portion of proceeds, your marketing plan should lay out the scope of the donation, whether it is through a point-of-sale transaction (asking customers if they want to add $1 to their to benefit the local volunteer fire department), percentage-of-sale (your business donates a specified amount for each sale, say 5% of the da's profits)
- Your plan should include definitive start and end dates. This allows both parties time to re-evaluate the campaign and determine if future or continued partnerships are worthwhile.
- Pitch your plan to the appropriate contacts from your chosen non profit. Work with them to create a mutually agreeable campaign.
3. Promote your partnership.
- Keep in mind that different forms of advertising are regulated by Federal, state, and local governments. Before you print any fliers or issue press releases, you should familiarize yourself with some basic rules for advertising.
- Be explicit about disclosing how much of each donation/sale will go to the cause. Further, find out how the non profit spends donations' how much goes to the source versus how much of spent on administrative overhead - and communicate it to your customers as well.
4. Keep records.
- Formalize your partnership agreement with documentation that outlines the terms of the relationship and the agreed-upon timeframe, and have both parties sign and date it. Contact an experienced small business attorney if you need help drafting a document.
- Do not give cash donations, which can easily be lost or stolen. For security and tax purposes, the FTC recommends that you pay by check made payable to the organization itself, not any individual person. If you are donating online, look for indicators that the site is secure, like a lock icon on the browser's status bar or a URL that begins https: (the s stands for secure).
Legal Considerations for Cause Marketers
- Some states regulate partnerships between non profit organizations and commercial businesses and require that documentation is filed with the local government. Contact your state Attorney General's office (www.naag.org*) to understand the laws in your area.
- If your business accepts donations on behalf of charity, and you keep any of the donated funds - even as a part of a processing agreement with the non profit - you will likely be deemed a commercial fundraiser by your state government. Commercial fundraising is a regulated activity in many states, so be aware of your local laws and your responsibilities to avoid legal trouble.
- If you believe an organization is not operating for charitable purposes, or is making misleading solicitations, the FTC advises that you contact your state Attorney General (www.naag.org*) or your local consumer protection agency (www.consumeraction.gov). You also may file a complaint with the Federal Trade Commission.
call toll-free, 1-877-FTC-HELP (1 877-382-4357), or use the complaint form at http://www.ftc.gov.
- Business.gov's Small Business Marketing Guide provides general information on marketing a small business, including how-to guides for planning, market research, and advertising.
- Visit the FTC.gov's Charity Fraud Guide for more information about making your donations count
- Read more about Socially Responsible Marketing Tactics from Business.gov guest blogger Rieva Lesonsky.
Have more questions? Discuss them in the Community.
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