Does anyone know the legality of doing character appearances for charity work?

There are many kinds of princesses, so it would certainly be possible to create princess characters who do not infringe any of Disney's intellectual property. Just look at the Renaissance Fair - they have a whole royal family that has no resemblance whatsoever to anything Disney does. However, having a stable of fairy tale princesses whose dress, while not an exact copy of the costumes worn by the Disney princesses, is notably similar and evokes comparisons to the characters could be a problem. If your characters are found to be too close to Disney's characters, the fact that you are only performing for charity or doing it "for the children" will not eliminate liability. Disney protects their intellectual property very vigorously. If you have concerns, you should consider discussing the specifics of what you intend to do with an intellectual property attorney and you may also consider determining what it would take to get Disney to grant you a license for the characters you wish to imitate.

Attorney Harkess has very ably answered your question. I write only to provide you with a link to the Disney Consumer Products department. Call or write and discuss your proposal with them -- they may have a charity-specific, free license [though I doubt it]. Good luck.

As Attorney Harkess correctly notes, Disney is known for aggressive enforcement of its rights --they actually have a well-deserved reputation for suing everyone and never settling any dispute that would imply any weakness on their part. Also, it's true that any request from a charity-based program is more likely to be received well by them, but not necessarily. They're a huge conglomerate geared to make profit and they don't need to care about anyone's good intentions. The fact that your query and your comment mentions Disney --and not e.g. Marvel or DC Comics or Nickelodean or some other company -- make me wonder about these characters "not being being billed as Disney characters," if they in fact are. Ask for permission and getting a license for this narrowly drawn use during a carefully defined timeframe is your best bet.

To be legal and safe you need permission from Disney. But all is not lost, Disney has an outreach program, and I think that is where your request should go to have the best chance for a positive reception. You want your request received by the part of Disney whose purpose it is to help organizations like yours, not the part that is interested in generating licensing revenue, stopping unlicensed use, and selling consumer products. The place you want to pitch this, I think, is: http://disney.go.com/guestservices/faq?id=donations1 The site implies that your request, being in Colorado will be handled by charitable outreach at Disneyland, and that for charitable outreach in Central and Eastern US, it's handled out of DisneyWorld. While you are at it, go for it and ask them for a donation to help fund your effort, with a plan B of just getting permission. The typical donation is several hundred dollars worth of free tickets to Disneyland. You might get pleasantly surprised, and perhaps if turned down will at least be told to go ahead on your own with their blessing.