Charitable Promotions, Business Joint Ventures, Donor Picks, Roundups and Peer Solicitations | Verrill

It’s not often you get BIG news in charity promotions law. But last year, California passed comprehensive legislation that will go into effect January 1, 2023.

So for all the brands planning your charity promotions in 2023, here’s an introduction to the new law (for now, based on the most recent proposed regulations). (Also, sorry for the length, but this is really a condensed version – the law and regulations are a bear to cross – grrh.)

Who is affected by the new CA law

  • Any company that operates on line charitable promotions. This includes:
  • Rounding up or other donations made by consumers on the Company’s website;
  • Donors choose programs on the company’s website;
  • Peer giving programs on the Company’s website;
  • VCC conducted at least partly online – IF The company donates to 7 or more different charities in a calendar year.

What to do to comply

Registration/Report:

  1. Register with the California Attorney General before applying.
    1. Fee of $625
    2. Complete the PL-1 form (without deposit)
  2. File the annual report no later than July 15 for the activities of the previous calendar year. (Form PL-4)
  3. Renew the registration each year before January 15th. (Form PL-2)

Charities in good standing only:

  1. Manually search the Registry of Charitable Trusts database on the California Attorney General’s website. (https://rct.doj.ca.gov/Verification/Web/Search.aspx?facility=Y)
  2. The business cannot work with a charity that is on the Cannot Operate or Solicit Charitable List.

REMARK: The charity has a grace period of 5 business days to properly exit this list.

REMARK: If the charity is or becomes ineligible to receive donations, the company must notify donors or purchasers (email ok) within 15 days and ask them to recommend another charity. The business must send donations to another recommended charity within 30 days.

Charitable Consent:

Consumer OR Donor Donations Choose OR Peer-to-Peer

  1. A written agreement with the charity to use its name in the solicitation that includes:
    1. Signed by an officer, director, trustee or other duly authorized representative of Charity.
    2. Specify the period for sending donations.
    3. Provided that the Society holds donations in a separate account.
    4. Provided the company promptly ensures that donations are sent to charity with accounting.
    5. Any fees deducted or added to a donation.
      1. REMARK: “Fees” include any amount from the original donation that is not passed on to the charity, including distribution, platform, service, technology or transaction fees, and processing fees digital payments.
    6. Allow the charity to approve the charity information in the solicitation and that if not approved it will be deleted (unless peer-to-peer).
    7. Allow Charity to recognize individuals who have made donations and specify any other terms regarding the sharing or use of information provided by those individuals.
    8. If more than one business is involved, all businesses must be identified in the agreement and the charity can select which businesses it consents to.
  2. The agreement is available for inspection by the California Attorney General.
  3. The contract can be concluded electronically.

REMARK: Written consent/agreement NOT required if:

  1. The company only refers to the name, address, telephone, website or registration number of Charity.
  2. The company makes it clear that Charity did NOT provide consent and did NOT review or approve the content.
  3. Company removes Charity upon written request from Charity within 3 business days of verification.

Commercial joint ventures

  1. Must have Charity consent, including agreement to all of the above.
  2. May avoid registration as a commercial joint venturer (unless new law applies where 7 or more charities per year are donated in accordance with on line VCC), if the agreement includes:
    1. Signature of 2 charity officers;
    2. Donations must be made quarterly with accounting.

Disclosures

Consumer OR Donor Donations Choose OR Peer-to-Peer

  1. If the Company allows donors to designate or restrict how donations may be used by the Association:
    1. Before a person can make a donation, the Society must clearly state that the donations may be used by the Charity without restriction, regardless of any designations or restrictions imposed by the donors.
    2. “To ostensibly disclose” means
      1. Located next to the main content;
      2. Type the same as or larger than the main content, with optional use of bold, italics, capitals, or a more prominent font or color.
      3. If hyperlinking is allowed, the hyperlink must be adjacent to the main content.
  2. Tax receipts for donations: The company must provide donors with a tax receipt for donations within 5 business days of the donation.
  3. The business must notify donors in writing (email ok) when their donations have been sent to Charity within 15 days of the donation being sent, unless donors affirmatively request not to be notified.

Commercial joint ventures

  1. The new law doesn’t really affect typical CCV disclosures which should include (in 10 pt.):
    1. Name and address of charity
    2. Donation per unit (% or $)
    3. Any minimum or maximum donation.
    4. Promotion dates.

Sending donations to charity

Consumer OR Donor Donations Choose OR Peer-to-Peer

  1. Donation period:
    1. Donations made directly to consenting Charities:
      1. If there are 100 or more charities, donations must be sent within 30 days of being made.
      2. If there are fewer than 100 charities, donations must be sent within 15 days of being made.
    2. Donations made directly to not consenting Charities:
      1. If there are fewer than 100 charities, donations must be sent within 30 days of being made.
      2. If there are 100 or more charities, donations must be made within 45 days of being made.
    3. Donations made directly to the Society:
      1. For 100 or more not consenting Charities, donations must be made within 60 days.
      2. For less than 100 not consenting Charities, donations must be made within 45 days.
      3. For 100 or more consenting Charities, donations must be made within 45 days of being made.
      4. For less than 100 consenting Charities, donations must be made within 30 days of being made.
  2. Additional information provided to the charity:
    1. Legal name of the company.
    2. Date each donation was made and sent.
    3. Amount of each donation, any fees charged and by whom, and amount after fees have been deducted.
      1. REMARK: “Fees” include any amount from the original donation that is not passed on to the charity, including distribution, platform, service, technology or transaction fees, and processing fees digital payments.
    4. Name and contact information (email/telephone) of each donor who has provided prior written consent to disclosure.
    5. For peer-to-peer, also include: name and contact (email/phone) of people participating in peer-to-peer if consent is provided and information on how the donation may be used, if applicable

Commercial joint ventures

  1. Donations must be made within 15 days of the end of each 90-day promotional period.
  2. Donation to include:
    1. Information on the acts of solicitation that led to the making of a donation.
    2. Amount of each donation, with accounting, including any fees charged and by whom.


Source link

Comments are closed.