Charity donation promotions for medical practices: ‘we donate for each new patient’ and the rules behind it

A practice that wants to give back and be seen doing it reaches for a simple line: for each new patient this month, we donate to the local food bank. The promise is generous and easy to say in an ad, on a sign or in a social post. It also ties a charitable gift to a purchase of your services, and that link is what state charitable solicitation laws, the FTC Act and the federal beneficiary inducement law look at. A plain gift from the practice to a charity, with no tie to patients booking, raises far fewer questions than a donation that grows with each visit.

This guide is for practice owners and marketing staff planning a cause promotion. It covers the commercial co-venturer laws in New York, California and Massachusetts as examples, how to state the donation honestly, Medicare and Medicaid patients, patient privacy in donation posts, and using the charity’s name and logo. For paying to sponsor an event or put your name on a program, see our healthcare sponsorships and naming rights guide, and for events run with a community partner, our health fair and screening event guide. Hospital and nonprofit appeals that use patient data follow HIPAA fundraising rules; see hospital fundraising and HIPAA.

The short version

• Saying a purchase will benefit a charity can make you a commercial co-venturer. New York, California and Massachusetts all define the term to cover a for-profit business that advertises that buying its services will benefit a charity.
• Get a signed written agreement with the charity first. California and Massachusetts both tie the co-venturer rules to a written contract signed by two officers of the charity.
• State the donation exactly. Amount per what, to which charity, for what period and any cap. A vague promise is a claim the FTC Act can reach.
• Think about Medicare and Medicaid patients. The beneficiary inducement law reaches remuneration likely to influence a patient to choose a provider, and a donation the patient controls or benefits from may look like that.
• No patient names in donation posts without written authorization. Saying someone is your patient discloses health information.

When a practice becomes a commercial co-venturer

New York Executive Law 171-a(6) defines a commercial co-venturer as any person who for profit is regularly and primarily engaged in trade or commerce other than raising funds for a charitable organization, and who advertises that the purchase or use of goods, services, entertainment or any other thing of value will benefit a charitable organization. California Government Code 12599.2(a) uses nearly the same words: a for-profit person or entity, primarily in trade other than charitable fundraising, that represents to the public that the purchase or use of any goods or services will benefit a charitable organization or be used for a charitable purpose.

A medical practice sells services for profit. An ad that says each new patient visit triggers a donation represents that buying the service benefits a charity, which fits those definitions on their face. A practice that writes one check to the food bank and posts a thank-you, without tying the gift to patients or visits, is a donor rather than a seller promising a benefit. No federal rule or state definition we read draws that line in those words. We recommend asking counsel which side your promotion falls on before it runs, because the duties below attach to the co-venturer side.

California: contract, transfers and accounting, or register

Under California Government Code 12599.2(b), a commercial coventurer is a trustee under the state’s charitable trust law. It does not have to register or file periodic reports with the Attorney General if it meets three conditions. First, it has a written contract with the charity, signed by two officers of the charity, before it represents to the public that the purchase will benefit the charity. Second, within 90 days after the representations begin, and at the end of each 90-day period after that while they continue, it transfers to the charity all funds received as a result of the representations. Third, with each transfer it gives the charity a written accounting detailed enough for the charity to confirm the representations were kept and to prepare its own report to the Attorney General.

Under 12599.2(c), a commercial coventurer that does not meet all three conditions must register and report to the Attorney General, with an annual registration or renewal fee of two hundred dollars, which the Attorney General may adjust. For a practice, the practical point is the order of steps: the signed contract comes before the first ad, not after the campaign is under way.

Massachusetts: a written contract filed before the solicitation

Massachusetts General Laws chapter 68, section 22(a) says a contract between a commercial co-venturer and a charitable organization that is required to hold a certificate of registration under section 19 must be in writing, signed by two officers of the charity, and filed with the director of the division within ten days after it is entered into. No solicitation may be conducted before the contract is filed. Under section 22(b), the contract must state the charitable purposes to be described in the solicitation and the minimum share of gross receipts that will be used only for those purposes.

We cite New York Executive Law 171-a here for the definition only; read the rest of Article 7-A of the Executive Law for what it asks of a co-venturer. Other states may set their own rules. Check the law of each state where your ads run or your patients live, and ask the charity whether it is registered where it needs to be.

Stating the donation honestly

Under 15 USC 45(a)(1), unfair or deceptive acts or practices in or affecting commerce are unlawful. The FTC Policy Statement on Deception describes a deceptive practice as a representation, omission or practice that is likely to mislead a consumer acting reasonably in the circumstances, to the consumer’s detriment, and that is material. A donation promise can mislead through what it leaves out as easily as through what it says.

No federal rule sets the wording of a donation promise. We recommend stating five things in the ad itself or one click away: the amount, in dollars, and what triggers it (a new patient visit, a completed appointment, a booked consult); the charity by its legal name; the start and end dates; any cap on the total; and whether the donation depends on anything else, such as a minimum purchase. Then keep a record that lets you show the donation was made as promised. If the promotion says 10 dollars per new patient up to 1,000 dollars, a patient who books after the cap is reached should not still be seeing the ad.

Avoid wording that suggests the charity endorses your care, that a share of each fee goes to the charity when it does not, or that a patient’s visit is itself a donation they can deduct. A tax question belongs with a tax adviser, not in an ad.

Medicare and Medicaid patients

Under 42 USC 1320a-7a(a)(5), a civil monetary penalty can apply to a person who offers or transfers remuneration to a Medicare or state health care program beneficiary that the person knows or should know is likely to influence the beneficiary to order or receive items or services from a particular provider. Under 1320a-7a(i)(6), remuneration includes transfers of items or services for free or for other than fair market value.

A donation that goes to an unrelated charity is not a transfer to the patient in the plain sense. The analysis changes when the patient gets something of value through it: the patient chooses a charity that pays their own bills, a school or team their family belongs to receives the money, or the patient receives a certificate or credit in their name. We found no OIG guidance written for per-patient charity donations by practices. We recommend keeping the charity fixed by the practice, unrelated to the patient, and asking counsel before letting patients direct the gift.

A separate question arises when the charity can send you patients. A community group, school nurse office or support group that refers people to you and receives money tied to visits is in the territory of the anti-kickback statute, 42 USC 1320a-7b(b), which makes it a felony to knowingly and willfully offer or pay remuneration to induce referrals of federal health care program business. Our sponsorships guide linked above walks through that analysis.

Patient privacy in donation posts

A post that says a named person’s visit funded a donation tells the world that person is your patient. Under 45 CFR 164.508(a)(1), a covered entity may not use or disclose protected health information without a valid authorization unless the Privacy Rule permits it, and under 164.508(a)(3) it must obtain an authorization for any use or disclosure for marketing, with narrow exceptions. Post totals, not patients. If a patient asks to be featured, get a written HIPAA authorization first.

Counting new patients to compute the donation is an internal use of your own records. Do not send the charity a list of the patients whose visits counted; the charity needs the total, not the names.

Using the charity’s name and logo

Under 15 USC 1125(a)(1)(A), a person who uses a name, symbol or misleading representation in commerce that is likely to cause confusion as to affiliation, connection or association with another person, or as to sponsorship or approval of their services, can be liable in a civil action. A charity’s logo next to your practice name can suggest a partnership or approval. Ask the charity for written permission, in the same agreement as the donation terms, and use the logo only as they allow.

Questions to ask before the promotion runs

• Does the ad tie the donation to a purchase, visit or booking?
• Is there a written agreement with the charity, signed by the officers the state law names, before the first ad?
• Which states do our ads reach, and what does each require of a commercial co-venturer?
• Does the ad state the amount, the trigger, the charity’s legal name, the dates and any cap?
• Who receives the money, and could a patient benefit from it?
• Can the charity refer patients to us?
• Do we have written permission to use the charity’s name and logo?
• Who keeps the record of the total and the transfer dates?

Use and avoid

• Use: a fixed dollar amount per defined event, a named charity, dates and a cap, all in the ad.
• Use: a signed agreement with the charity before launch that covers the terms and logo use.
• Use: a public thank-you that reports the total donated and the date it was sent.
• Avoid: open promises such as a portion of proceeds, with no amount or charity named.
• Avoid: letting patients pick a charity that pays their own bills or benefits their family.
• Avoid: donations tied to visits that go to a group that refers patients to you.
• Avoid: naming or picturing patients in donation posts without a HIPAA authorization.

An illustration

This example is invented. [Practice name], a family dental office in [Town], wants to run a spring promotion: for each new patient, the office will donate to the [Town] food pantry. The first draft of the social post says the office gives back with each visit, shows the pantry’s logo and promises to post photos of new patients holding a donation sign.

The revised plan starts with a written agreement, signed by two officers of the pantry, that sets 10 dollars per completed new patient exam from April 1 to May 31, a cap of 1,000 dollars, a transfer date within 90 days and a written accounting, and permission to use the pantry’s name and logo. The ad states those terms in plain words. The photo idea is dropped; the office posts the total and a photo of the check being delivered to pantry staff who agreed to be pictured. The office manager asks counsel whether the pantry or the state requires any filing before the post goes up, and the ad stops running the day the cap is reached.

Checklist

• Decide whether the promotion ties the gift to a purchase or visit.
• Confirm the charity’s legal name and registration status.
• Sign a written agreement covering amount, trigger, dates, cap, transfer timing, accounting and logo use.
• Check each state where the ad runs for co-venturer filing or contract rules.
• Write the ad with the amount, trigger, charity, dates and cap.
• Keep the charity fixed and unrelated to patients and referral sources.
• Track the total without sending patient names to the charity.
• Transfer the funds and the accounting on the agreed dates, and keep the records.
• Post totals, not patients, and stop the ad when the promotion ends.

How we help

We build practice websites, local SEO, Google Ads and lead generation and an AI front desk for independent practices. For cause promotions, we write landing pages and ads that state the donation terms in plain words and end the campaign on schedule. Our tools are built with HIPAA in mind. We confirm in writing what a BAA covers before any patient information flows through a tool, and if it is not covered, we do not route patient information through it. We are not a healthcare provider and we do not give legal or medical advice. For the wider rules, see our healthcare marketing rules guide.

Sources

• New York Executive Law 171-a: Definitions (commercial co-venturer)
• California Government Code 12599.2: Commercial coventurers
• Massachusetts General Laws chapter 68, section 22: Contracts
• 15 USC 45: Unfair methods of competition unlawful
• FTC Policy Statement on Deception (1983)
• 42 USC 1320a-7a: Civil monetary penalties
• 42 USC 1320a-7b: Criminal penalties for acts involving Federal health care programs
• 45 CFR 164.508: Uses and disclosures for which an authorization is required
• 15 USC 1125: False designations of origin and false descriptions

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