A commercial co-venture is a fundraising tool where a nonprofit engages with a for-profit entity to raise funds for the nonprofit through the sale and promotion of commercial goods and services. Under the California Alcohol Beverage and Control Act, an ABC licensee (e.g., a distributor or seller of alcoholic beverages) is prohibited from giving a premium, gift, or free goods in connection with the sale and distribution of any alcoholic beverage. Until 2022, the Department of Alcohol Beverage Control had taken the position that this prohibition made it unlawful for an ABC licensee to advertise that a portion of the purchase price of an alcoholic beverage will be donated to a specific nonprofit. As a result, nonprofits were unable to engage in commercial co-ventures with for-profit entities that sell or distribute alcoholic beverages.
However, effective January 1, 2022, the law was changed – at least temporarily until December 31, 2024 – to authorize certain manufacturers, distributors, or sellers of alcoholic beverages to donate a portion of the purchase price of a beverage to a nonprofit charitable organization. In order to do so: (1) the donation must be in connection with the sale or distribution of alcoholic beverages in manufacturer-sealed containers; (2) the promotion or advertisement of the donation must not directly encourage or reference the consumption of alcoholic beverages; (3) donation cannot benefit a retail licensee or a nonprofit established to benefit the employees of retail licensees; and (4) the advertisement or promotion of a donation cannot, directly or indirectly, advertise, promote, or reference any retail licensee.
This law authorizing commercial co-ventures related to alcohol beverage sales was set to expire on January 1, 2025. AB 3285 extends this the law January 1, 2030.
(AB 3285 amends sections 23827 and 25600 of the Business and Professions Code.)