Legal Question in Business Law in California

10% of purchase to go to non-profit

Hi,

Is it legal to put a statement such as

the below on my website to tell

customers that 10% of each

purchase will go to a non-profit?

Or do I need an explicit partnership

with a non-profit?

-------------------------------------

We're donating 10% of each

purchase to three non-profit animal

organizations per year. Each

organization will receive 10% of our

proceeds earned within a four month

time period. At the end of the specific

time period, the organization will be

presented with a check from us.


Asked on 4/09/09, 11:17 am

3 Answers from Attorneys

Edward Hoffman Law Offices of Edward A. Hoffman

Re: 10% of purchase to go to non-profit

I agree with Mr. Muntean and Mr. Stone.

Note also that your proposed language is internally inconsistent. It says both that you will donate "10% of each purchase" and "10% of [y]our proceeds". "Proceeds" generally means only the profit on a transaction, not the entire amount of the transaction. If you promise to donate 10% of the total purchase price but actually donate only 10% of your profit, you will be committing fraud.

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Answered on 4/09/09, 3:41 pm
Mark Muntean Mark Muntean, Attorney at Law

Re: 10% of purchase to go to non-profit

Although this is a very noble gesture, no kind act is ever easy. The California Attorney General regulates charities and the organizations that raise money on their behalf. Thus, the fund raising effort you propose will need to satisfy the attorney general regulation requirements. While this sounds like a pain, the consequence of not doing so could be a lot more painful.

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Answered on 4/09/09, 11:41 am
Michael Stone Law Offices of Michael B. Stone Toll Free 1-855-USE-MIKE

Re: 10% of purchase to go to non-profit

By "non-profit" I am assuming you mean "charitable," the two terms are not synonymous. You must fulfill any promise that you make in this regard, but I'm not aware that you need to have an advance arrangement with a charity.

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Answered on 4/09/09, 1:31 pm


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