Charitable Sales Promotion Agreement

September 13th, 2021

Written contract with a non-profit organization. It is advisable to enter into negotiations with the nonprofit in a timely manner prior to the nonprofit call to ensure compliance with state laws. The contract must be signed in writing and signed by the parties (Massachusetts and Virginia require signatures from two executives of the nonprofit organization) before the invitation is made. In some states, the contract must be performed a certain number of days before the non-profit invitation (for example. B at least 15 days in Alabama). The contract should not only clearly define the respective obligations of the parties with regard to sales promotion (e.g.B. management and control of funds, advertising activities, performance, guarantee, compensation conditions), but require many statutes that the contract controlled binding conditions. Representative examples of these terms are as follows: there is nothing wrong with entering into an agreement with a for-profit company for a non-profit organization in order to obtain a percentage of the turnover. However, it would be naïve to ignore the fact that for-profit companies can benefit from consumers` motivation to buy goods or services by thinking that they are donating to a non-profit organization. Studies show that consumers are motivated to make purchases when they think that a percentage of revenue is being used for a “good cause,” hence the name “cause marketing.” Therefore, public regulators have an interest in protecting nonprofits from exploitation and protecting consumers` expectations of where the money will land. About twenty-two nonprofit advertising statutes regulate nonprofit calls from “commercial co-venturers.” 1 In general, a commercial co-contractor is a person who “carries out a regular activity and mainly in commerce for profit or other consideration, except in the context of advertising for a non-profit organization” and who provides a non-profit sales promotion. In most of these states, 2 commercial co-managers are not required to register each year or issue a loan, which is a welcome message for those conducting non-profit sales transactions. The law on non-profit promotions/cause marketing and “commercial joint ventures” is evolving.

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