In connection with National Breast Cancer Awareness Month, the New York Attorney General recently issued best practices for companies that may conduct "cause marketing" campaigns – promotions where it is advertised that the purchase or use of the advertiser's product will benefit a charity. These best practices call for clear and conspicuous disclosure of any material terms before the consumer makes a purchase, including the name of the charity, the amount of the donation per purchase that will go to charity, the maximum donation (if applicable), whether any consumer action is required to trigger a donation, and the start and end dates of the promotion. The disclosure should be made in a clear and prominent format and size and in close proximity to the advertising copy. The New York AG suggests use of a "donation information" label which sets forth this information in a table format.
The best practices also advise that advertisers should disclose whether they have promised a charity a minimum or fixed donation amount regardless of the number of products sold, as well as other material contractual limitations or terms. For example, it should be disclosed if the donation will be made in a form other than cash. Furthermore, the best practices call for companies to limit the products placed in the market to the quantity reasonably expected to produce the maximum donation amount – if there is in fact a maximum cap – on the amount donated to the charity; if there is a minimum donation amount, then the best practices call for enough products to be available for purchase such that the minimum amount is likely to be exceeded.
In addition, the NY AG's best practices state that advertisers should be able to track donations in real-time and discontinue such promotion or clearly disclose to consumers that the consumers' actions will no longer trigger donations to a charity (i.e., when the maximum donation amount has been met). Finally, it is recommended that advertisers should disclose how much money was raised or donated due to the promotion and display such information on their website at the conclusion of the promotion.
The attorney general's best practices make it clear that they apply not only to promotions conducted through traditional media, but also promotions conducted through social media such as a "like" or "follow" campaign where consumers trigger donations by liking the advertiser on Facebook or following the company on Twitter.
With respect to advertising material that uses a ribbon, color, or logo that is commonly associated with a charitable cause, it should be clear from the context of the advertising whether such indicia is used merely to show support or whether the purchase of the product will result in a charitable donation.
TIP: Companies considering a cause marketing campaign should keep in mind the best practices specified by the New York Attorney General and should also be aware that such campaigns are regulated under the laws of various states, several of which require a company to register the promotion and file a bond and/or a written contract with the charity that contains mandated contractual terms.