Staying compliant with California AB 488: a guide for cause marketing

Amar Shah
June 16, 2023

California AB 488, the latest cause marketing compliance law, has introduced significant regulations to ensure transparency and accountability in fundraising activities. Companies engaging in sweepstakes or other fundraising initiatives must understand and comply with these requirements to avoid legal implications. In this blog post, we'll explore the key provisions of California AB 488 and provide insights on how companies can prepare for and maintain compliance, allowing them to continue their philanthropic efforts while adhering to the law.

Understanding California AB 488

California AB 488 focuses on promoting responsible cause marketing practices, safeguarding donor interests, and ensuring transparency in fundraising campaigns. The law mandates specific requirements that companies must follow when running sweepstakes or raising funds for charitable purposes. Its purpose is to regulate and provide oversight for online charitable fundraising platforms and recipient charitable organizations, ensuring transparency, compliance, and accountability within the realm of digital philanthropy. This legislation aims to protect donors and ensure transparency and accountability in the nonprofit sector.

Compliance Measures

To prepare for California AB 488, companies should take the following steps to ensure compliance and maintain a strong and ethical approach to cause marketing:

1. Familiarize yourself with the law

Thoroughly read and understand the provisions of California AB 488. It is essential to grasp the regulations, including disclosure requirements, restrictions on marketing claims, and registration obligations. Seeking legal counsel can also be helpful.

2. Implement transparent disclosures

Ensure all marketing materials, including advertisements, clearly disclose the terms and conditions of sweepstakes and the intended charitable purpose of fundraising campaigns. Transparent disclosures help build trust with consumers and avoid any misleading or deceptive practices.

3. Obtain required licenses and registrations

Companies must register and obtain necessary licenses, as mandated by California AB 488. Failure to comply with registration requirements can lead to penalties and legal consequences. Familiarize yourself with the registration process and ensure timely submission of all required documents.

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4. Maintain accurate financial records

Properly document and track all financial transactions related to fundraising activities. This includes recording funds collected, expenses incurred, and donations disbursed to charitable organizations. Accurate financial records demonstrate transparency and accountability in compliance with the law.

5. Stay informed of updates and changes

Monitor any updates or amendments to California AB 488 to stay current with compliance obligations. Regularly review the legislation and seek legal counsel if needed to ensure ongoing adherence to the law.

California AB 488 has introduced important regulations to promote responsible cause marketing practices and protect the interests of donors and charitable organizations. By understanding and preparing for these compliance measures, companies can continue their fundraising efforts while maintaining transparency and accountability. Following the guidelines outlined in this blog post will help businesses navigate the requirements of California AB 488 and contribute to a more trustworthy and impactful cause marketing landscape in California. Remember, compliance is not only a legal obligation but also an opportunity to build stronger connections with consumers and make a meaningful difference in the communities we serve.

Take the Free Compliance Assessment

See if you're compliant with California AB 488. In just a minute and a half, you can discover if you are up to snuff with the new law or if there are tweaks you need to make to your approach to compliance. Gain peace of mind and ensure your cause marketing efforts align with the regulations by taking advantage of this valuable resource.

How Change Can Help

Change is a valuable resource for companies seeking compliance with California AB 488 and navigating the complexities of cause marketing regulations. Our comprehensive platform provides the tools and guidance necessary to ensure adherence to the new requirements. With Change, companies can easily meet the annual registration and reporting obligations, maintain transparent communication by disclosing fee details and fund utilization, and obtain the necessary written consent from charity beneficiaries. We facilitate restricted solicitation, ensuring that donations go to reputable organizations, and enables fund segregation to maintain transparency and accountability. Change also prioritizes prompt distribution of donations and grants, aligning with the urgency of charitable needs. With their robust accounting features, companies can effortlessly track and report on fees, promoting financial transparency and building trust among donors.

Change empowers companies to comply with California AB 488, fostering a responsible and ethical cause marketing environment. Book a demo with us today to learn more.