A recent New York Times article on embedded giving (http://www.nytimes.com/2007/12/16/washington/16giving.html?_r=1&oref=slogin), explores Sen. Robert Menendez (D-NJ) announcement of plans to introduce federal legislation this week to better regulate this fast-growing fund-raising practice, which involves building a gift to charity into everyday purchases. This fundraising tactic is often abused -- some programs fail to disclose what part of a transaction will go to charity, others fail to name the charity that will benefit (or even notify them!), and often, consumers have no way of knowing if their money actually went to charity and how much was raised overall. Menendez is exploring measures to address all of these issues.

This legislation would be an important national step toward helping consumers have a better understanding of how their dollars are being used – and ensuring that charity is not being used solely as a sales/marketing/PR tactic. (For example, when a company positions itself as a leader in the struggle to eradicate breast cancer while actually engaging in practices that may be contributing to rising rates of the disease, it’s knownn as “pinkwashing.”)

Some nonprofits do have in-house legal counsel who can deal with companies who use their names without permission – but if they don’t know about it beforehand, all they can do is issue a cease-and-desist and consider further legal action, they can’t put the horse back in the barn after a company has publicly claimed an association with them and their mission. New Jersey’s new (2006) regulations could be a model for federal legislation; they require all embedded giving programs to provide the state with copies of the contract between the charity and the retailer at least 10 days before they start; retailers and manufacturers involved in the program must also report the amount raised; and the charities involved must report how much was actually given to them.