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One transaction, clear responsibility

How LocalLoop product fundraisers work

A supporter buys products from the local product Vendor. LocalLoop supplies the digital sell sheet, checkout, records, and settlement workflow. The verified charitable Organization receives fundraising proceeds and serves as the bulk-delivery and supporter-distribution point.

LocalLoop does not buy, own, manufacture, warehouse, possess, or deliver the products. The Organization does not choose the catalog, Vendors, Products, or supporter prices. Every checkout payment is tied to identified products; the product fundraiser does not include a standalone contribution option.

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Transaction and fulfillment flow

From supporter checkout to organization payout

1 · PURCHASE

Supporter

Shops through the Organization's fundraiser storefront and pays the product price plus any sales tax shown at checkout. The Organization is already established before checkout.

2 · ORCHESTRATE

LocalLoop + Stripe

Capture the order, route the Vendor settlement, preserve transaction records, and calculate authorized allocations.

3 · FULFILL

Vendor

Acts as seller of record. The Vendor does not fulfill or deliver orders daily, weekly, or on a rolling basis. After Campaign ordering closes, the Vendor prepares all accepted orders and makes one consolidated bulk delivery on the drop date agreed in the Campaign Schedule.

4 · DISTRIBUTE

Organization

Accepts the bulk delivery, sorts orders, runs supporter pickup, and receives the reconciled fundraising payout.

Products are not individually shipped to supporter homes. A supporter receives the product through the Organization's announced pickup or distribution process.

Payment waterfall

What happens to each checkout payment

  1. Product price and tax are separated. Any applicable sales tax is charged in addition to the product price and reserved for the party legally required to report and remit it.
  2. The Vendor settlement is protected. The Vendor receives its contracted product amount for accepted, conforming fulfillment. Ordinary Stripe processing fees do not reduce that amount.
  3. LocalLoop receives its contracted platform compensation. LocalLoop's fee pays for the catalog, storefront, checkout, reconciliation, reporting, and support services.
  4. Actual payment-processing cost is assigned to the Organization allocation. The full actual Stripe processing fee attributable to the order is deducted from the Organization's gross fundraising allocation.
  5. The remainder is the Organization's net fundraising proceeds. LocalLoop reconciles and pays that amount after authorized refunds, chargebacks, credits, reserves, and other documented adjustments.

Vendor responsibilities

  • Act as seller of record and complete Stripe Express onboarding.
  • Provide accurate product, ingredient, allergen, packaging, fair-market-value, and tax-classification information.
  • Maintain required licenses, insurance, safety, traceability, and recall records.
  • Prepare and deliver the final bulk order to the approved Organization location.
  • Fund remedies caused by product defects, shortages, recalls, mislabeling, or Vendor fulfillment failures.

Organization responsibilities

  • Maintain verified Section 501(c)(3) status and required Colorado charitable registration, or document an applicable exemption.
  • Provide authorized signer, W-9, good-standing, delivery, and distribution information.
  • Approve the charitable purpose and the amount or percentage disclosed as benefiting the Organization.
  • Promote the campaign accurately and handle storage, sorting, pickup communications, and final supporter distribution.
  • Bear the actual payment-processing fee through a deduction from its gross fundraising allocation.

LocalLoop responsibilities

  • Maintain the static platform catalog, approve Vendors and Products, and set supporter prices.
  • Provide the digital sell sheet, checkout, order capture, participant attribution, reconciliation, and support tools.
  • Administer Stripe destination-charge and application-fee instructions under the approved processor configuration.
  • Apply tax calculation, collection, and remittance rules assigned to LocalLoop by law, while preserving Vendor classifications and transaction evidence.
  • Maintain private compliance records and produce an organization-level audit package when properly requested.

Supporter responsibilities

  • Review the Product, fundraiser, participant attribution, price, tax, and pickup terms before checkout.
  • Pay any sales tax separately stated at checkout.
  • Pick up or receive the order through the Organization's distribution process.
  • Understand that the purchase supports a charitable purpose but is not automatically represented as fully tax-deductible.

Digital compliance onboarding

What Organizations provide before launch

Required identity and eligibility file

  • IRS legal name and EIN.
  • IRS determination or affirmation letter, or qualifying group-exemption evidence.
  • IRS Tax Exempt Organization Search verification, including Pub. 78 eligibility and automatic-revocation review.
  • Colorado charity registration number and current status, or written evidence supporting a statutory exemption.
  • Colorado entity ID and good-standing evidence when applicable.
  • Form W-9, authorized-signer information, signed Organization Agreement, signed Campaign Schedules, and e-signature completion certificates.

Audit-ready retention

  • Original files are stored privately; each version receives a SHA-256 integrity hash.
  • Verification source, status, reviewer, review date, renewal date, and expiration date remain indexed.
  • Replacements create new records instead of silently overwriting earlier evidence.
  • A hash-chained activity log records submissions, reviews, downloads, and audit exports.
  • An authorized administrator can export the evidence, signed records, verification history, order ledger, fee allocations, tax amounts, and refunds in one ZIP package.

A Colorado sales-tax exemption certificate may be retained as supporting evidence, but it does not by itself determine the tax treatment of a supporter's retail purchase.

Important legal and tax boundary

Contract language can allocate economic responsibility, but it cannot override a duty imposed directly by law. The agreement therefore assigns tax classification information to the Vendor and requires sales tax to be collected, reported, and remitted by whichever party the applicable marketplace, state, home-rule, and local rules require.

These onboarding materials explain the operating model. Final agreements, tax settings, charitable-sales-promotion disclosures, and registration classifications should be reviewed by qualified Colorado counsel and tax professionals before live launch.