Newsletter: Do Cause Marketers Go to Jail? 🤨; Coke's 'Peace Tea' Rewards Random Acts of Kindness✌️; Where the Hell is Geoffrey the Giraffe??🦒
Two weeks ago I wrote about using Facebook to promote your partnerships. I mentioned that in some states it may be illegal to promote your partnerships because of commercial co-venture laws.
That's not quite true, according to my supah-smaht friend and cause marketing lawyer, Karen Wu.
It is not actually “illegal” for nonprofits to promote their partnerships – rather, the main potential consequence is that the money the nonprofit receives from those partnerships could be viewed as taxable advertising income, rather than nontaxable contribution or royalty income.
When I wrote Commandment #8 “Thou Shalt Be Aware of UBIT” (“UBIT” meaning “unrelated business income tax”), I very intentionally used the words “be aware” rather than “beware,” which makes UBIT sound more perilous than it need be. If the organization must pay UBIT on the payments it receives, it will reduce the amount of money available to spend on programmatic activities, so it is something to be aware of for planning purposes. If a substantial portion of an exempt organization’s overall income is generated from unrelated business activities, the organization may lose its tax-exempt status, so that is where there is a significant legal consequence.
The IRS has not drawn an explicit line in the sand about when an organization has too much unrelated business income to qualify for tax-exempt status, so nonprofits should seek legal counsel if they want to better understand that risk (or lack thereof) in light of their overall activities. Being aware of what UBIT is, and when it is triggered, allows nonprofits to make informed decisions about what types of benefits they offer to their partners.
However, Karen was clear on the dangers of UBIT:
The main UBIT danger areas are (1) encouraging people to buy the company’s products/services (even ones that will ultimately generate funds for the charity); and (2) promoting the company in qualitative ways (“Coca Cola is the best cola”), etc. For your interest, here are two slides with examples of when statements may be a non-taxable acknowledgement vs. a potentially taxable advertisement.
By the way, I put in one “tricky” example in the “acknowledgments” slide about “Wheaties, the Breakfast of Champions®” – normally, something like that would sound like an endorsement of quality, but there’s a little exception within the IRS rules on acknowledgements that “Logos or slogans that are an established part of a payor’s identity are not considered to contain qualitative or comparative descriptions.”
As you can see, the rules around UBIT are very nuanced, including one big exception for activities that are “not regularly carried on” – I’ve had many a discussion with folks about the “one-off” promotional activity, and at what point “one-off” is no longer one-off and becomes regularly carried on!
My whole conversation with Karen confirmed that you need to know the laws and guidelines covering commercial co-ventures and you should talk to a lawyer to understand the risks and opportunities.
Thanks, Karen. You're the best! (Wait...can I say that??? 🤭)
Partnership notes 📝
🕊Coca-Cola brand Peace Tea is tapping its group of influencers, called the Peace Tea{m}, for a #ChoosePeace campaign that encourages Randomer Random Acts of Kindness. Peace Tea's influencers will share their own acts of kindness on Facebook and Instagram. For every like, the company will donate $1 to Random Acts, a group that encourages random acts of kindness worldwide.
💄Great interview with Lush's director of brand communications on what activism means for the beauty brand. It's amazing all the things they are involved in how they are not afraid to take a stand.
🦁Partners of the newly launched The Lion’s Share fund will contribute 0.5% of their media spend to the fund for each advertisement they use featuring an endangered animal. Those funds will be used to support animals and their habitats around the world. The Fund seeks to raise $100 million a year within three years. Pair this story with how the defunct gossip blog Gawker may return as Gawker for Good.
Marketing your cause 🤑
🎯Lead magnets are woefully underused by nonprofits...but not by the National Audubon Society. They're offering something valuable and interesting in exchange for your email. What could you offer to earn a supporter's email??
🤝Is the RAICES Fundraiser to reunite immigrant families the next Ice Bucket Challenge? Beth Kanter thinks so. Me? I bought this lipstick. 💋
✍️Email marketing is critical to your success. How to ensure those emails reach Gmail's primary tab.
🤝Sponsor
DoTopia’s 31 Days of Giving campaign with Deepak Chopra is wrapping up this week. You still have a chance to get $10 to give to your favorite nonprofit when you sign up for a free giving account.
Why wouldn’t you? It’s a win-win. Good for you. Good for the world.
More info at: 31DaysofGiving.DoTopia.com.
Cool jobs in cause** 😎
1. Corporate Giving Associate, Xerces Society (Portland, Oregon)
2. Director, Corporate Fundraising & Marketing Partnerships, JDRF (Chicago)
3. Corporate Relations Manager, Land Trust Alliance (Washington, DC)
4. Manger, Corporate Relations Manager, Greater Boston Food Bank (Boston)
5. U.S Public Relations and Communications Lead, Movember Foundation (Culver City, CA)
**Have your cause-related job featured here for FREE. Hit reply or email me at joe@selfishgiving.com.
Brain food 🧠🍎
🦒Toys "R" Us is gone. But what happened to their iconic mascot Geoffrey the Giraffe? He's on the mend in a New Jersey hospital.
😍This Alabama man’s free lawn service is changing lives one yard at a time across the 50 states. Great story! Thanks for sharing, Laura Ferry.
🇬🇧I'm in London July 11 -18! Hit reply and let me know if you are too and we can grab a Cup of Joe. One early RSVP: Donald Trump and his baby blimp.😑I may need this Shakespeare Punching Puppet.
Have a question, story suggestion or category you want to see covered? Just leave a comment below. 🙏
