Help With For Profit Business Looking To Donate To Charity

January 4, 2011 7:25 PM

This may be one of those "you should consult a lawyer" questions, but I thought I'd give it a shot and see if anyone might be able to help. Basically, I'm in the middle of starting a business that will be donating 50% of our net profits to charity, but I have a few questions:

• Is it illegal to mention the specific charities we plan on donating to? Do we need consent from each charity?
• Can we publish our donation receipts online? We want to show our customers how we're doing with our donation goals and we'd like to do a monthly blog with our receipts. Personally, I can't really think of WHY this might be frowned upon, but I thought I should at least ask before brazenly posting away.
• To anyone that might have specific experience in this matter, are there any other laws or "fine-print" I should be aware of when donating through a for-profit business? I'm obviously going to emphatically state that we are donating NET profits as opposed to gross profits.

If it makes any difference, we're a registered DBA (soon to be LLC) in the state of Illinois. For our first month or so, we'll be donating under our DBA. Thanks. Any help is much appreciated.

posted by ISeemToBeAVerb to Law & Government (3 answers total)

This is, as always, not legal advice, but as far as I am aware, as long as you do (or intend to do) legal things with your money, it is legal to publish facts about those intentions and actions. In fact, even if you were doing illegal things with your money, it'd still be legal to tell people about it (through whatever means), though doing so would probably lead to an indictment or some such.

The only case I can imagine to the contrary would be a charity that requires some sort of non-disclosure agreement in order to donate (e.g., if they don't want it known that people are donating to them), though that would be one odd charity indeed.
posted by astrochimp at 7:45 PM on January 4, 2011

I can only speak to part of this. The charity part. You cannot use any charity's name, brand, likeness without their consent if they have an established trademark. If they do, they can tell you to remove it. "Fundraising" on a charity's behalf can be tricky as it is a two way street. You benefit from their brand (potentially) and they from yours. Talk to

There are instances where charities may not want to be affiliated with your brand/business. As I don't know what you do...it is hard to know. Think of tobacco or strip clubs. Do you want them advertising that they give 50 percent of their profits to Sister's of Holy Charity? I've seen checks returned.

I'd talk to the charities that you'd like to donate to. They might be very interested in what you are doing and be able to post something on their website.

Donation receipting monthly is up to you. You just want to make sure that donors can opt out if they wish to be anonymous. You should make sure that people know that they cannot take the tax write off if they receive a good/service. The last thing that you want is the IRS peeking through how you operate looking for a fraudulent practice.

Good luck. Sounds like an interesting business model.
posted by zerobyproxy at 7:45 PM on January 4, 2011

Response by poster: Thanks for the replies Astrochimp & Zerobyproxy.

I kinda figured there might be some issues with trademark laws so I'll be contacting the charities just to be safe. Our products aren't controversial in any way so I don't see a problem there.

The actual donations would be through our company rather than our individual customers so there isn't any issue with anonymity. I'm more concerned with any laws pertaining to charitable donations through the business. I'm sure there will be some tax issues to deal with, though I don't know what they might be at the moment. I guess that kind of stuff is hard to discuss without concrete details.

Anyhow, thanks for the input!
posted by ISeemToBeAVerb at 9:24 PM on January 4, 2011