Serious post today, guys. This is a very important update for legal reasons.
Sometimes you have good intentions, and yet it just doesn’t work out like you intended.
If you’ve been with me for a while, you know I do the occasional charity benefit. Cupcake the Dinosaur likes to appear at community events and raise money for, say, the local animal shelter or Needy Family Fund. I have sold books for charity fundraising before and participated in the Giftmas campaign each year for the Edmonton Food Bank. And most recently, I pledged to donate two dollars for every preorder sale of Shard & Shield to a specific charity organization.
Well, it turns out that was illegal.
The technical terms, with which I’ve become very familiar over the last couple of hours’ of reading, are “cause-related marketing” and “commercial co-venture.” Apparently there is no legal difference between a Fortune 500 company running a cause-related marketing campaign, with an accounting team to track millions of dollars of designated profits, and an unincorporated individual making a donation. So specifying that proceeds or profits go toward a specific charity or purpose trigger a whole host of state and federal laws on false and misleading advertising. If I make that promise outside of just locally — and my newsletter goes all over the US, to Australia, to Switzerland, to South Africa, all over the world — then I have to comply with all fifty US states’ regulatory laws as well as federal, requiring at minimum a CCV contract with the designated charity, in this case guaranteeing a minimum donation of $25,000.
I’m a mid-lister nobody, and $25,000 in preorders is… implausible. Even if I’d dreamed of that number, I didn’t guarantee it in advance to the charity.
You’ll notice that I keep saying “the charity,” because apparently even mentioning the organization’s name is enough to trigger cause-related marketing law. (From what I read, teeeeeechnically I might be able to mention the organization, since I have donated before and talked about those donations here on the blog, but I’m trying to walk the straight and narrow, here.)
Some states also require a CCV to post a bond for the full donation amount up front. That clearly did not happen, because I had no way of knowing how many preorders would sell and frankly I didn’t know I had to post a bond for them. In multiple states.
Illinois actually requires registration and continued annual filing as a “charitable trust.” Because Illinois.
But wait, there’s more: Because I would be handling the money in transit (retailer pays me royalties, I write a check to the charity) rather than having customers put their money in a locked box to be delivered directly, that could also potentially under some state laws put me in the role of “professional fundraiser,” opening massive cans of legal worms like Dune Makers.
Now, this is clearly a lot of Bad Things that have already gone wrong, and I recognize I’m taking a risk in acknowledging them publicly. But while I can scrub my blog of charity promises, I can’t retract all the word of mouth, the social media I’ve seen with people mentioning the charity, the newsletter I sent just this morning before I was informed. My best path, as I see it, is to be transparent, to demonstrate that I was not acting in exploitation or deception, and to explain what will happen next. (Also it would probably look bad if, after people had already ordered, I suddenly deleted all references to donating without an explanation.)
To be perfectly honest, I never dreamed that I could promise to lose a buck and a half on each sale and be at risk of legal trouble for exploitation. This isn’t The Producers; I was actually and happily in the red. And while many people do run the first book in a series as a loss leader, that only works if the rest of the series is available for sale, which this is not.
So, to be perfectly honest, I struggled on how best to handle this, and my choice is to be immediately upfront and hope my intentions were clear.
Above I listed what I didn’t know to do. Here’s what I did right:
- I made it very clear from the beginning that the designated charity did not endorse, support, approve of, or have any connection with my book, my sale, or myself. They didn’t even know about it to start. I never used the organization’s logo. There was never any false or misleading advertising to imply endorsement.
- I did not mislead consumers as to the effect any particular purchase would have on the overall donation. I was very clear on the system.
- I was equally clear on the duration of the campaign.
- And this isn’t a legal point, but I’m happy to say that I did introduce both a serious social ill and an organization fighting it to some people who were previously unaware, and that inspired some additional giving. So at least I achieved that charitable goal while unknowingly violating charitable law.
What Happens Next:
- I will still honor each and every preorder with the donation I promised. The fact that I didn’t sign a guarantee or post a bond does not change the fact that I promised. And no way will I change any terms after people have already preordered.
- I’m going to additionally spell out the preorder donation as clearly as possible. For each $1.99 preorder sale at Amazon, I make $0.70. I am donating $2 for each preorder sale reported by Amazon. This means I am in the hole $1.30 for each Amazon preorder, not counting any costs for marketing and other preorder bonuses and giveaways. (This number will vary slightly with other online retailers, due to slight variations in royalties. If you have a question about what I made and lost via the retailer where you purchased, you’re welcome to write for specifics.)
- I will also donate a flat amount above the preorder sum. To be perfectly honest, this was likely to happen anyway, as I donate regularly to this charity. But now instead of waiting until later in the year, I will donate an additional $500 on the day of Shard & Shield‘s release, July 2, in addition to and regardless of the preorder donations (which will happen later to allow for reporting lag). Clearly I am not exploiting or misleading for profit. There is no profit.
I’m not going to lie, I have a lot of emotions right now, none of them positive. I was excited to see people responding and to see some social media chatter about the cause. I had recorded a video about the preorder bonuses, including the charity donation, at Waimangu in New Zealand, and I can’t just pop back there to record it again but this time without mentioning the charity. And there’s the underlying point that for this to even be an issue, someone somewhere has to assume I’m capable of just exploiting sad stories about enslaved children and then laughing my way to the bank.
I understand the need for laws to prevent unscrupulous corporations from lying to consumers. I just didn’t anticipate that would extend to prohibiting an individual’s promise to donate.
When explaining that I would lose money on all preorders, I lightheartedly invited people to “punch me right in the charity,” and it really feels like that’s what happened here. Good job, Georgia Code § 43-17-6(a) and national colleagues, you hooked me a solid one and I didn’t see it coming.
I got the email alerting me to this issue, read it a couple of times, and then clicked though to a linked article which started my serial reading on CCVs, etc. It was, as you can imagine, surprising and frustrating. I closed the articles to return to later, closed the email, and opened the next message in queue.
It addressed a donation I’d offered for a fundraising auction — one without sponsor recognition, advertising, etc. It seems that my brand-new items totaling $42 in retail value were not up to the expected standard of an approximate $50 donation, so could I please list what additional items I could include and how I would be delivering them?
Back to back? Seriously? Am I just not supposed to be trying to help?
And oh yeah, also discovered today, my unreleased book is already on a pirate site. Either it’s a fake phishing file (happens) or one of my ARC readers has pirated my book (and there were a few whose behavior prompted me to even check for piracy, so….).
This is a day to demonstrate why we cannot have nice things.
I will wait a day or two for my adrenaline to settle back to something closer to baseline, and then I will explain that I will put the auction items to good use elsewhere. It will save me some packing and stress.
I will reevaluate my ARC reader system for future releases.
But the preorder donations and the additional flat donation will absolutely still go to the originally designated charity.
I’m sorry that I promised in enthusiasm without being better informed, and I hope it’s clear that everything was done with the best of intentions, that no misleading statements were made, and that all donations are still happening and in fact even more than planned. If anyone wants to donate directly, I’d love for you to join me, and I’ll post a link after release day when I can say where it’s going. ;-)
Thanks for reading to the end. I really appreciate you guys.