Editorial: Charities see profits from logos

Tuesday, May 18, 1999 | 2:49 a.m.

A preliminary report by the National Association of Attorneys General finds these licensing agreements often convey a false impression that the products have been endorsed by the nonprofit partner and that they are superior to other products made by their competitors. These financial alliances also can be misleading since they sometimes fail to disclose that the nonprofit has been paid a hefty fee to use its name. Wisconsin Attorney General James Doyle estimates that businesses paid charitable organizations in North America $535 million during 1998 for the use of the nonprofits' names in marketing.

Misleading partnerships have led to state and federal law enforcement actions. For instance, 12 state attorneys general and SmithKline Beecham Consumer Healthcare reached an agreement regarding the company's use of the American Cancer Society's name and logo in its advertising of the company's smoking cessation product, Nicoderm. Under the agreement the company must clearly state that while the company has paid for the use of the American Cancer Society's name and logo, the nonprofit hasn't endorsed the product.

The concern expressed by the attorneys general is legitimate. When consumers buy health products and see a health charity's name attached, they instinctively are drawn to that product -- unless, of course, they know the nonprofit is getting a large fee for using its logo. Instead of having to address each marketing agreement separately, 16 attorneys general are recommending that all companies and charities voluntarily agree to disclose in the company's marketing and products that the charity is being paid a fee and is not endorsing the product. The attorneys general will hold a meeting next week on these proposals. The charities and companies should endorse these guidelines, which benefit the consumer and ensure that the good name of these charities won't be harmed by misleading ads.