FTC Gives Tips for Online Giving Portals

Advertising Law

What do online charitable giving portals need to know to avoid violating advertising law principles?

The Federal Trade Commission, in response to its own concern that such portals can inadvertently create donor confusion, published new guidance for online retailers, social media hubs, crowdfunding sites and other online platforms that provide a list of charities people can choose to support directly from the online platform.

“Donors using giving portals may mistakenly believe that their donation is going directly to their designated charity,” the agency wrote. “But, donations through an online giving portal may first go to an organization that accepts the donation and issues the donor’s tax receipt. That intermediary organization might keep a service fee from the original donation before sending the rest to the designated charity.”

The FTC’s central message: Provide donors with clear information about how the donated money is allocated. Not only are donors more likely to understand how the process works, but it also helps ensure the giving portal complies with advertising law principles.

“It’s important to provide clear and truthful information to donors,” the FTC wrote. Among other things, the portals should disclose who distributes the donor’s money and, if the charity will not receive the money directly or immediately, make this fact clear to donors. Portals should also disclose whether any fees are related to the donation by stating the total amount or percentage of the contribution that the charity will receive.

Portals should also disclose whether donor information will be shared, when the charity will receive the donation, what happens if the giving portal cannot get the donation to the charity, how often this happens, and how the donation will be treated under these circumstances. The FTC suggested the donors be provided with the option of whether they want their information shared.

Giving portals should also “be obvious,” the agency advised. The important information “should not be in fine print, buried at the bottom of a page or in a poorly labeled hyperlink,” the FTC said. “Donors must be able to see the key information and disclosures before giving through online portals. In evaluating whether a disclosure is clear and conspicuous, consider its placement on the page and its proximity to the relevant claim.”

The commission also discussed the prominence of the disclosure, whether the disclosure is unavoidable, whether the language of the disclosure is understandable to the intended audience, whether other parts of the web page detract attention from the disclosure, and whether the disclosure should be repeated at different places on a website. Disclosures in audio format should be presented in an adequate volume and cadence, the agency said, and visual disclosures should appear for a sufficient duration of time.

Finally, the FTC emphasized the need to truthfully describe the designated charities and the portal’s relationship to those charities. “Using specific and plain language to describe what type of screening (if any) is done before a charity is included on the giving portal can help avoid creating a false impression that a charity is recommended or otherwise evaluated or endorsed by the giving portal,” according to the guidance.

Consulting state law is also essential, the agency noted, as many states may have their own rules and regulations about what a third party can and cannot say about a designated charity.

To read the FTC’s guidance, click here.

Why it matters: Online giving portals have created new ways for people to support causes they care about and for charities to obtain the financial support they need, the FTC recognized. But giving portals “must ensure that their efforts to provide more giving options do not inadvertently create donor confusion or violate advertising law principles,” the agency cautioned. By following the new guidance—and being clear, being obvious and telling the truth—online giving portals can avoid such problems.