UNDERSTANDING COMMERCIAL CO‑VENTURES & STATE‑SPECIFIC COMPLIANCE OBLIGATIONS BY HANNAH FISCHER FREY, KATIE KALKOWSKI & CONNOR OLDENBURG, BAIRD HOLM LLP IF YOU’RE FROM NEBRASKA, FOLLOW the College World Series (CWS), or simply watch the news, chances are you’ve heard of Rocco’s Jell-O Shot Challenge. Now a CWS tradition, the challenge pits fans against each other in a spirited competition to rack up the most Jell-O shots for their favorite team—all while raising money for a good cause. Last year’s CWS was a record-setting year, generating more than $145,000 in donations to food banks affiliated with the CWS participating schools as well as a local Omaha food pantry, simply from the sale of Jell-O shots. This year, Rocco’s upped the game by donating 40% of each Jell-O shot sale. As Rocco’s demonstrates, many businesses seek to better their business and better their community by engaging in what is often referred to as “cause-related marketing.” This sort of marketing involves a collaboration between a for-profit business and non-profit entity. Businesses engage in this sort of activity with the goals of increasing profits and giving back to the community due to a sense of corporate social responsibility. Although Rocco’s cause-related marketing tradition functions in Nebraska without much regulation, the same cannot be said for the majority of the country. This specific type of cause-related marketing and charitable fundraising is typically referred to as a commercial co-venture (CCV). The ability to boost sales while donating to charity is seen as a win-win to many businesses. However, it is important that a business carefully consider the steps necessary to make sure any such campaign is compliant with state laws and regulations. A business that operates a CCV without complying with a state’s specific CCV laws may face a variety of consequences, including monetary penalties and enforcement by that state’s attorney general. Therefore, it is critical BETTER BUSINESS, BETTER COMMUNITIES 16 Nebraska CPA
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