“A company’s or charity’s brand is its most valuable asset.” So said the New York Attorney General (“NYAG”) on October 18, in a guidance document (“the Guidance”) relating to companies that support charities by promising donations from the sale of their products or use of their services—called “cause” marketing. See NYAG Website and Oct. 18 Press Release. The NYAG provided five “best practices” relating to cause marketing, generally focused on transparency to consumers. Five Best Practices.
Step 1: “Clearly Describe the Promotion”
The Guidance states that advertisements and web sites used in the cause marketing campaign, and product packaging, should “clearly and prominently” disclose the terms of the promotion, including the charity’s name, what the charity will receive, what the consumer needs to do, whether there are any minimum or maximum amounts guaranteed to be paid to the charity, and the start and end dates of the cause marketing campaign. The Guidance provides an example:
Step 2: “Allow Consumers to Easily Determine Donation Amount”
The NYAG advises against using terms like “profits” or “proceeds.” Instead, the cause marketing campaign should indicate the amount per item/service to be donated or indicate the fixed percentage of the retail purchase price.
Step 3: “Be Transparent About What Is Not Apparent”
The Guidance recommends specifying where there will be a flat donation made to the charity regardless of any consumer action, whether the donation will be in-kind or in cash, and whether there is a cap on the total amount donated as part of the cause marketing campaign. In addition, the NYAG advises: “If a ribbon, color, logo or other indicia commonly associated with a charitable cause is used in a cause marketing campaign, clearly and prominently disclose whether the purchase of a product or use of a service will trigger a charitable donation.”
Step 4: “Ensure Transparency in Social Media”
The Guidance extends the best practice recommendations list above to cause marketing campaigns conducted on social media. But the interactive nature of social media led to an additional recommendation: “Companies should also have a system in place to track donations in real-time for the duration of the campaign, to make transparent to users the progress of the campaign.”
Step 5: “Tell the Public How Much Was Raised”
The Guidance recommends that companies and charities “should maintain on their websites key information about all active and recently closed cause marketing campaigns.” At the end of each campaign, the website “should clearly disclose the amount of the charitable donation” that the campaign generated for the charity.