Last week, the New York Attorney General (“NY AG”) released a much anticipated follow-up to its “Pink Ribbon” cause-marketing initiative. The guidance issued has far-reaching effects for both charities and companies engaged cause marketing efforts as the NY AG has often in the past has helped set enforcement trends nationwide.
As many will remember last October the NY AG celebrated National Breast Cancer Awareness Month by sending comprehensive questionnaires to over 40 charities and nearly 150 companies inquiring about details of promotions in which the sale of a product or service is advertised to benefit a breast cancer cause, also known as “cause marketing” promotions (click here for a refresher on the initiative). The NY AG has now concluded its inquiry by releasing Five Best Practices for Transparent Cause Marketing (the “Best Practices”). These comprehensive guidelines provide insight into what details regulators may look for in identifying deceptive and misleading advertising in cause marketing promotions.
The NY AG focused on five Best Practices for cause marketing: 1. Clearly Describe the Promotion 2. Allow Consumers to Easily Determine the Donation Amount 3. Be Transparent About What is Not Apparent 4. Ensure Transparency in Social Media 5. Tell the Public How Much Is Raised.
Although the five recommended Best Practices seem simple enough, the report encompasses a number of recommendations with a level of detail that go beyond practices currently used by many cause-related marketers. For example, in order to assist consumers in identifying relevant information about the campaign, the Best Practices recommend that product packaging and websites include a “donation information” label which would be similar to a nutrition label found on food items and would identify for donors key information about the campaign.
On the subject of disclosures, the Best Practices identified a list of recommended disclosures that is noticeably longer than the disclosures currently required by any state statute and includes:
- The name of the charity receiving a donation;
- The mission statement of the charity if not readily apparent by the name
- The benefit the charity will receive from the purchase of a product or use of a service
- Any flat donation, any minimum amount guaranteed to the charity, or any maximum amount or other cap on the donation;
- Any consumer action required in order for the donation to be made and any other restrictions on the donation; and
- The start and end dates of the campaign.
As advertisers know well, there is often limited real estate on product advertisements. However, the Best Practices state that such disclosures should be made “in a clear and prominent format and size” and “in close proximity to” the text of the promotion. If these recommendations are followed, many companies and charities will have to go back to the drawing board and reevaluate their cause marketing advertising materials.
The Best Practices also give a nod to modern technology by including standards for social media promotions used by companies to raise money for charity. In these types of promotions, where a “like” by a Facebook user or a pinned image on Pinterest can result in a corporate donation, the Best Practices suggest that similar prominent disclosures should be made and that companies have a system to track real-time donations during the campaign so when any maximum donation amount is reach the social media campaign will automatically be shut down or the lack of subsequent donations will be clearly communicated to users.
In issuing its Best Practices, the NY AG took a unique approach to ensuring the guidelines are followed, at least in pink ribbon promotions. At the time of the press release, the NY AG announced that the nation’s two largest breast cancer charities – Susan G. Komen For the Cure and Breast Cancer Research Foundation – had both signed off on, and voluntarily agreed to follow, the NY AG Best Practices in all of their cause marketing endeavors. This effectively means that many companies who want to hold a pink ribbon promotion will also be playing by these new rules.
And while the pink ribbons are leading the way, other charitable causes will certainly follow. By providing additional examples and enhanced disclosures to consider, the Best Practices have set a new bar for compliance in cause marketing promotions.