Maine Eases Cause Marketing Regulation

October 10, 2013

Effective this month, Maine will no longer require commercial co-ventures (a/k/a cause marketers) to be licensed by the state’s Department of Professional and Financial Regulation, Office of Professional and Occupational Regulation (OPOR). Prior to amending its Charitable Solutions Act to repeal the provisions governing commercial co-ventures, Maine had one of the more burdensome state laws, requiring annual licensure and bonding of commercial co-ventures, as well as annual financial reporting. The Maine Statute had broadly defined commercial co-ventures as a commercial entity that “conducts a sale, performance, event or collection and sale of donated goods that is advertised in conjunction with the name of any charitable organization.”

In testimony supporting the elimination of licensing for commercial co-ventures, Anne Head, Director of OPOR and Commissioner of the Department of Professional and Financial Regulation, stated that OPOR “had never received a complaint relating to the conduct of a commercial co-venturer. The agreement between the charitable organization and the sponsor is a matter of contract. Any dispute arising between a charitable organization and a sponsor concerning [contributions] can be resolved by those parties or the courts as a matter of contract law.”

Of course, cause marketing in Maine and elsewhere remains subject to federal and state deceptive advertising laws and many states continue to expressly regulate cause marketing. Most common is the requirement of a written agreement between the commercial co-venturer and the charity, with several states mandating the inclusion of certain contract provisions. Massachusetts, and Alabama require registration and bonding of commercial co-ventures. Illinois, South Carolina, Mississippi, Hawaii, and California require some form of registration, although California waives registration provided the agreement between the commercial co-venture and the charity contains specific provisions designed to protect the charity.