Legally Donating A Percentage of Your Sales To A Cause

Do you want to donate proceeds from your next offer to a nonprofit whose causes near and dear to your heart?

First of all, I see you. That's amazing.

Second of all — wet blanket time — it's not super straightforward or legally easy to do that.

I’m your “woo-woo” spiritual friend Maria — who just happens to be a lawyer for coaches and healers — here to tell you about the legal nitty gritty that goes into legally donating a percentage of your sales to a cause.

Scroll down to read more about the legal requirements (or watch below) for donating a percentage of your proceeds to charity. At the very end of this blog post, I’ll give you an example of a workaround that does it right.

Essentially, each state has what's called “charitable sales promotion laws.” I'm going to talk about Tennessee law because I'm located in Nashville, Tennessee.

Under applicable Tennessee law, we're looking at the Charitable Solicitations Act. And what I'm looking for specifically is the part that talks about a commercial co-venturer.

Stick with me.

Okay, a commercial co-venturer is anybody who is:

1. a business organized for profit

2. that is regularly and primarily engaged in a trade or business other than soliciting for charitable and civic organizations.

So again, a commercial co-venturer’s primary business activity is not really charitable fundraising,

A co-venturer conducts an advertised charitable sales promotion for a specific period of time. If you're advertising that you're going to submit a portion of proceeds to charity, that counts.

So here are the requirements in order to advertise that you — a co-venturer — are donating a portion of your proceeds to that charity.

Requirements in order to donate a portion of your proceeds to a charity

Requirement No. 1: The Charity Must Be Registered

First, the charitable organization being promoted must be registered with division of charitable services (or exempt according to law). Again, this is the Tennessee State terms, but many states have similar requirements, so, you get the picture.

Requirement No. 2: A Written Agreement

Next, you must have a written agreement with that charitable organization. Yep. No way around getting something in writing with the charity.

Requirement No. 3: Your Promotion Records

Finally, you have to keep all records in connection with that promotion for no less than three years after the promotion ends.

Where it gets complicated

Now, those requirements? That’s just for the state of Tennessee.

Complications come in when you are advertising on the worldwide web, and someone from, say, California, buys something from your website. (The same website where you’re advertising a charitable sales promotion.)

22 states regulate the commercial co-venturer thing and about 11 of those states require some kind of registration. So you can see where the time investment can take a toll if you’re required to register in multiple states.

To sum up…

I love, love love that more businesses are getting interested in this and donating a portion of their proceeds to worthy causes. But I just want to make sure you’re not getting into legal hot water for doing so.’

If you want to legally donate a percentage of sales to a charity, make sure you follow the legal steps required by your state in order to do so.

Bonus: A workaround

Want to see a great example of a workaround?

Here’s a box of tea I was recently gifted. (I edited out the company name.)

You’ll notice that they don’t say a portion of proceeds are going to a specific charity.

See? They don’t name a specific charity. But, the company makes clear that their profits go towards a cause that’s dear to it. The giving vibe is still there. 🖤