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  • 1.  Is this advertising? Any issues if not connected to a sponsorship? But is linked to cause marketing?

    Posted 07-17-2023 04:32 PM

    Colleagues, 

    My org has published a newsletter where we highlight a few of our (many many) cause marketing partners, saying something like:

    Business A sells cool things like art kits. Order your kit today and $5 of every kit purchases helps kids get care they need at our hospital... or
    Business B can deliver delicious goodies to your doorstep, and 10% of any order will go back to the hospital. Order your produce and use the code "LUCILEPACKARD."

    The businesses all have a cause marketing agreement in place with us, and we do not promise to highlight any business in our newsletter; we chose them.

    Are there any IRS issues with this kind of promotion to our existing supporter base? Anything else to be aware of? 

    Thanks AASP experts!



    ------------------------------
    Faith Danforth
    The Lucile Packard Foundation for Children's Health
    faith.danforth@lpfch.org
    ------------------------------


  • 2.  RE: Is this advertising? Any issues if not connected to a sponsorship? But is linked to cause marketing?

    Posted 07-17-2023 04:40 PM
    These statements likely violate IRS rules regarding sponsorships which nullify their donations when the charity endorses them or otherwise induces people to purchase their products or services.

    I would seek legal guidance. However, if none of these partners receive or expect to receive a tax receipt for any payment they make, you won't have a deduction issue. However, there could be a UBI consequence for providing advertising of this sort. That might require a chat with your CFO.

    Please share the attached with Counsel and the CFO for their opinion.

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987




    Original Message


  • 3.  RE: Is this advertising? Any issues if not connected to a sponsorship? But is linked to cause marketing?

    Posted 07-18-2023 10:07 AM

    Thanks so much, John, I suspected so, much appreciate your expertise and quick reply, thank you!



    ------------------------------
    Faith Danforth
    The Lucile Packard Foundation for Children's Health
    faith.danforth@lpfch.org
    ------------------------------

    Original Message


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