Still looking for that perfect holiday gift? How about an NFT featuring Melania Trump’s “cobalt blue eyes” by artist Marc-Antoine Coulon, accompanied by an audio recording from Mrs. Trump with a “message of hope.” (Still not sure what an NFT is? You can get up to speed by reading my colleagues’ great primers, here and here)
Not sold? How about the fact that a “portion of the proceeds” from the sale of these NFT will purportedly “assist children aging out of the foster care system by way of economic empowerment and with expanded access to resources needed to excel in the fields of computer science and technology.” That's a compelling promise but, unfortunately, there are no specifics about how it's going to work, either in the press release Mrs. Trump tweeted out or on the website where the NFT sale is taking place. Is there a charity involved in the effort? A computer science program? And, most importantly, exactly how big is that portion of the proceeds going to helping kids who are aging out of foster care? Fifty cents per NFT sale or fifty dollars? For a consumer motivated to make a purchase based on the promise of helping poor kids, size can certainly matter.
As we’ve blogged about before, charitable efforts are subject to active oversight by state and federal enforcement agencies and claims that a for-profit is supporting charity through the sale of its goods are like any other advertising claims: they must be truthful. Further, such campaigns should clearly describe what’s happening so consumers can make an informed purchasing decision, and so charities working with the for-profits will know how much money they'll receive from the campaign, or at least the basis on which their take will be calculated. Indeed, as the BBB Wise Giving Alliance provides, "Promotions that promise a buyer that the purchase of a good or service will benefit a specified charity should clearly disclose the amount the charity will receive… Unless informed otherwise, donors may believe that much more of the purchase is going to the charity than is actually the case. Transparency helps avoid false assumptions and misunderstandings."
Many state charitable solicitation laws also require specific disclosures in ads that promote that the sale of a product will benefit a charity or a charitable effort. And if the campaign constitutes a "commercial co-venture," as variously defined in different states, some of those states also require registration and bonding. (For a run-down of the rules governing commercial co-ventures, see here.)
All this as a reminder that it's well and good to promote the sale of your products with a (truthful!) promise to support a charitable effort, but even if you're Melania Trump, there are rules to follow. Consumers -- and the kids -- deserve nothing less.