Guest post today courtesy of Kent E. Seton, founder and president of the Center for Nonprofit Creation.
If you are passionate about your nonprofit charity or business, branding your charity is an invaluable tool that can yield significant economic benefits. Some of the most well known nonprofits in the world, like United Way and the American Red Cross, are charitable entities that are just as well known as brands that do make a profit, like Coca Cola and Nike. How does a nonprofit translate into dollars and cents? Several companies, such as the American Red Cross, have brands so reputable that they license out their trademark to “for profit” enterprises. An example of this licensing in action is a seal of approval – if you go into a grocery store and see a Red Cross logo on a cosmetic item, it has been officially “certified” by the American Red Cross. Each time that product is sold, the American Red Cross earns a royalty. The American Red Cross generates a significant amount of revenue via this model.
You too can do this with your nonprofit! The first few steps involve working on building up your brand, but before you can begin, you need to make sure your brand is available. If someone already has the trademark and/or copyright for your brand, it could be a big problem later on. How do you insure your brand is available? You must learn what a trademark is and the benefits of obtaining a federal trademark in the United States on the Principal Register for a business name, mark or logo (i.e. a brand).
These benefits include the following:
1) Constructive notice to the public of the registrant’s claim of ownership of the mark.
2) A legal presumption of the registrant’s ownership of the mark and the registrant’s exclusive right to use the mark nationwide on or in connection with the goods or services listed in the registration.
3) The ability to bring an action concerning the mark in federal court.
4) The use of the U.S. registration as a basis to obtain registration in foreign countries.
5) The ability to file the U.S. registration with U.S. Customs and Border Protection to prevent importation of infringing foreign goods.
In addition to these benefits, according to the United States Patent and Trademark Office it’s important to know the following before you register a mark:
- You need to insure you have “used” the mark in commerce (which means real use).
- You need to conduct a trademark search to insure that your mark does not infringe another party’s mark – a service that our friends at MyCorporation can easily help you out with!
- Insure that it is not merely descriptive, a surname or somehow implying it represents a government or geographic region.
- File an application with the United States Patent and Trademark Office in each class in which you desire registrations; there are currently 45 classes.
- Once your mark is registered, you need to stay vigilant and “watch” to see if anyone is using your mark in a way that might infringe your mark’s use.
For charities, it’s important to make sure you have 501(c)(3) tax-exempt status, which we at the Center for Nonprofit Creation can help you obtain. It would be a shame for you to work hard to build your brand loyalty without being legally able to accept charitable contributions from donors, give donors a tax deduction, and also have the funds you receive be considered tax exempt. To become 501(c)(3) tax exempt now, click here.
Both trademarking and applying to the IRS to become 501(c)(3) tax-exempt take time, sometimes as short as 2 months to as long as 12 months. That being said, an ounce of prevention is worth a pound of salt; you are better off starting today!
Kent E. Seton is the Founder and President of the Center for Nonprofit Creation. The Center for Nonprofit Creation specializes in preparation of documents for nonprofit entities to apply for federal 501(c)(3) tax-exempt status. Over the last 12 years, Seton and his staff have prepared thousands of tax-exempt applications, all of which were successfully granted 501(c)(3) tax-exemption. The Center for Nonprofit Creation is a proud partner with MyCorporation.com, who helps you form your nonprofit and for profit corporations, as well as performs Trademark searches and filings.