The Legal Consequences of Online Donation Portals

Online donation is a new way of social assistance. It has been used by banks to make up deficiencies in social assistance and serves as a broad channel for charity giving.

Donation portals is used to empower your donors with a self-serve, branded way to manage their donation information. Donors can update their profile, store payment methods, manage recurring plans, and download end-of-year tax receipts — all while staying aligned with your message and brand. Examples of donation portals are Mozilla, Future in sight, Obama Foundation, Oxfam, Pencils of Promise and NextGen Climate. There are many more types of donation portals.

Many online retailers, social media hubs, crowd-funding sites, and other online platforms offer "donation portals” that provide a list of charities people can choose to support directly from the online platform. These giving portals have created new ways for people to donate, allowing donors to support causes they care about and charities to get the financial support they need. Donors using donation portals may mistakenly believe that their donation is going directly to their designated charity. But, donations through an online donation 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.

Online donation portals should give clear information to donors about what happens with the money donated through the platform. This helps donors understand how the process works. It also helps ensure that the donation portal doesn’t violate advertising law principles. Here’s some guidance on what to tell donors and how:

Be clear

It’s important to provide clear and truthful information to donors. Some important information that donation portals should disclose:

  • Who gets the donor’s money? Before they donate, donors should be told where their contributions will go. Tell donors who will distribute the funds to the designated charity. If the designated charity will not receive the money directly or immediately, make sure this is clear to donors.
  • Are there any fees? Be clear about the total amount or percentage of a donor’s contribution that will go to the designated charity.
  • When will the charity get the donation? Disclose how long it will take for the designated charity to receive the funds. Explain clearly what happens if a donation portal cannot get the donation to the charity, how often this typically happens, and how the donation will be treated under such circumstances.
  • Will donors’ information be shared? Tell donors whether their personal information will be shared with the designated charity or anyone else, including the public. Let them choose whether they want it shared. 

Be Obvious

Important information, such as that described above, should not be in fine print, buried at the bottom of a page or in a poorly labeled hyperlink. 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. For example, additional considerations include:

The prominence of the disclosure;

Whether the disclosure is unavoidable;

whether the language of the disclosure is understandable to the intended audience;

if other parts of the web page distract attention from the disclosure;

if the disclosure needs to be repeated at different places on a website;

whether disclosures in audio messages are presented in an adequate volume and cadence; and whether visual disclosures appear for a sufficient duration.

Tell the truth:-

It also is important to present accurate information about the designated charities and the giving 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.

Many states have state-specific rules and regulations about what a third party can and cannot say about a designated charity. Be sure to consult applicable state laws.

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