The Importance of Trademarks to NonProfit Organizations

A nonprofit organization (NPO) is a type of entity that has a purpose other than making a profit, such as a social cause.  Put another way, rather than distributing profit to shareholders, as is typical in a corporation, any additional revenues are used to further the nonprofit’s mission.  That said, make no mistake about it, nonprofit organizations are not always charities and it is typically equally important to maintain organizational sustainability.  As such, nonprofits will identify ways to generate revenue so as to allow them to continue to invest time and resources into furthering their mission.  Some examples of nonprofits include UNICEF, Rotary, Kiva, Ted Talks, LPGA, United Way, Livestrong and Goodwill.  These nonprofits own registered trademarks and attend to them just as a for-profit organization does.

As one can imagine, just like a for-profit business seeks to leverage its brand and identity in order to further garner goodwill and generate revenue, nonprofits also are well-served when they do the same.  In addition, nonprofits want to avoid public confusion with like-minded nonprofits and, even worse, non-affiliated entities that try to profit off the consumer recognition of the nonprofit.  So, just like for-profit organization, as a nonprofit you should:

1. Identify your marks, including character mark, logos and taglines
2. File trademark applications with the United States Patent and Trademark Office (USPTO) and other government bodies in geographic locations in which you operate or intend to operate.  You should be particularly mindful to file in connection with your particular services, such as in International Classes 35 and 36 for charitable fundraising services” for solicitation of donations, promoting public awareness of . . .” or “public advocacy to promote awareness of . . .” for advocating a particular cause or issue or the interests of a group’s members or a certain class of people.
3. Ensure proper usage of your trademarks via licensing agreements and otherwise.  However, be mindful of the potential to create unrelated business income tax” (“UBIT”) on income earned from activities regularly carried on that are not substantially related to the organization’s tax exempt purpose (typically pursuant to 501(c)(3)).  Also, it is important to avoid any private inurement or benefit that may again impact the nonprofits tax exempt purpose.
4. Monitor unauthorized third party usage of your trademarks.
5. Take action in the event of trademark infringement, dilution of your brand or other unfair competition that adversely effects your nonprofit.

If you are nonprofit, you can not ignore the importance of sound business decisions, which necessarily includes proper management of intellectual property.  Remember, trademarks are important to furthering your mission and part of a sustainable organization.