Coventuring and giving back online is both complicated and expensive — here’s what you need to know. (P.S. DailyKarma solves these issues for you!)
As a VP of marketing or business owner who cares about doing good with your U.S.-based brand, you may have heard of commercial coventuring (and perhaps scratched your head).
Here’s the thing: if you’re donating a portion of proceeds, you need to comply with certain laws to stay out of trouble. It’s complicated … and did we mention it’s expensive?
But fear not! Here at DailyKarma, we not only UNcomplicate and untangle commercial coventuring for you, but we also make the exorbitant cost — POOF — disappear.
Keep reading for everything you need to know to stay compliant and support causes you love seamlessly through your e-commerce store.
What is commercial coventuring anyway?
Any time you are engaged in any kind of giving as a for-profit company, you are subject to commercial co-venturer laws and need what’s known as a commercial co-venture (CCV) agreement.
More than 19 states have special regulations governing these things (language requirements, disclosures, etc.).
To remain compliant, brands are required to register seven states for each nonprofit you support. That means that if you sell to shoppers spread across the country, you’ll need to register in all of the states where your shoppers live. Additionally, each nonprofit you support is required to register in 14 states.
And on top of that, if you want to support a different nonprofit each month — you’ve got to register for 12 nonprofits a year. Do you like to select multiple causes for each product collection you sell? Well, that number just got a lot bigger, didn’t it?
Oh, and one more thing: the nonprofit you support needs to register in all 50 states. (These regulators make it a delight to give back, don’t they?)
The cost of coventuring and giving back online
And wait, there’s more! Because it’s not just about registering. It’s also about paying for each registration each year.
Not only is it expensive to stay compliant, but also you’ve got to pay every year – to the tune of $4,000 annually!
Why is it so expensive? Here’s a breakdown of commercial coventuring costs for e-commerce brands like yours:
- Nationwide commercial co-venture agreement with a single nonprofit: $3,000
- Legal fees and time: $1,000
- Additional fees per nonprofit you support: $2,000-$3,000
Great news: DailyKarma eliminates this burden for you!
We’re thrilled to let you know that by using Shop for Good by DailyKarma to give back through your store, you’re in the clear. We take care of everything for you.
This is because we funnel the funds you and your customers raise through The DailyKarma Foundation before delivering those funds to their intended nonprofits. As a result, the need for you to register becomes unnecessary, as technically the transaction is taking place via our software rather than via your store.
Thus, Shop for Good grants you substantial cost savings as well as flexibility to give back creatively and abundantly throughout the year, every year.
To ensure compliance measures are being met, our software also goes through an annual compliance review (a.k.a. we hire lawyers so you don’t have to!).
You’re expected to keep detailed records of your giving for a minimum of seven years (in case of a financial audit). The analytics section of your Shop for Good dashboard generates and keeps detailed records of your giving for you in case you ever need them. Done!
In a nutshell: with Shop for Good, you are relieved of the commercial coventuring hassle + expense and also gain access to forward-thinking technology and in-depth analytics. Pretty excellent, right?
We’re here to help you give back, grow sales, and make a difference.
Get started with Shop for Good today
Additional resources to learn more about commercial coventuring and giving back online:
- The Better Business Bureau (BBB) recommends transparency in cause marketing. In other words, they recommend disclosing how much you’re donating, especially when running a Portion of Sales campaign. You can read about that here under Standard 19. This will help the nonprofits you’re supporting feel good and also give more peace of mind to your customers. It’s a win-win.
- Article on Commercial Co-Ventures and Cause Related Marketing from the Council of Nonprofits
- Article on 10 Legal Requirements Cause Marketers Need To Know from Engage for Good