First of all, let's be clear that this is not an either/or debate. It's
not sponsorship versus advertising. What we are talking about is whether
the nature of benefits provided to a sponsor constitutes advertising in the
eyes of the IRS. When it does, it negates the entirety of the sponsorship
payment as a charitable gift and may even result in unrelated business
income. When the benefits do not cross this "advertising line," the
sponsorship payment may constitute a charitable donation to the extent that
the payment exceeds the value of tangible benefits given in exchange.
As noted in the IRS and ASAE documents found at the download site, there
are many recognition benefits you can bestow on a sponsorship donor that
does not cross this line. And there are many that do. And if you are ever
in doubt as to whether the lines are being crossed you must turn to your
own Counsel and CFO. But the lists provided by the IRS are pretty straight
forward.
Here is what *will* cross the advertising line - I have highlighted the
item that relates to the original question:
- qualitative or comparative language;
- price information or other indications of savings or value; or
- an endorsement or inducement to purchase, sell, or use the sponsor's
service, facility, or
product.
And here is what you can provide without crossing the line:
- exclusive sponsorship (as opposed to exclusive provider) arrangements;
- the sponsor's location, telephone number, or Internet address;
- value-neutral descriptions, including displays or visual depictions,
of the sponsor's product
line or services;
- displays of brand or trade names and product or service listings;
- logos or slogans that are an established part of the sponsor's
identity; and
- mere display or distribution (for free or at a cost) of the sponsor's
product at a sponsored
activity.
I will cover this is much greater detail in Chicago next month.
John
John H. Taylor
Principal, John H. Taylor Consulting
2604 Sevier St.
Durham, NC 27705
johntaylorconsulting@gmail.com
919.816.5903 (cell/text)
Join me for 2-days of Advancement Services programming at the
Midwest Meeting of the Minds conference this August!
http://midwest-motm.org/
On Wed, Jul 10, 2019 at 11:33 AM Mary L. Oliver <
oliverm@wittenberg.edu>
wrote:
> John,
>
> This is very timely, as our Athletic Department has just shared with me a
> tiered corporate sponsorship program that they would like to implement for
> the upcoming year. In Elizabeth's original email, where is the endorsement
> by the university coming in? Is it the reading of the advertisement during
> the games? All but two of the proposed sponsorship levels include public
> address announcements, website logo placement and promotional table at a
> home sporting event. Does this combination make these advertisements
> instead of sponsorships with a charitable gift?
>
> Thank you
>
> Mary Oliver
> Director of Advancement Services
> Wittenberg University | PO Box 720 | Springfield, OH 45501
> Tel: 937.327.7421 | Fax: 937.327.7444 | Email:
oliverm@wittenberg.edu
>
>
>
>
Original Message-----
> From: Advancement Services Discussion List [mailto:
> FUNDSVCS@LISTSERV.FUNDSVCS.ORG] On Behalf Of John Taylor
> Sent: Wednesday, July 10, 2019 11:07 AM
> To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG
> Subject: Re: [FUNDSVCS] Sponsorship and Athletics
>
> Because you are endorsing the company by recommending folk go there you
> have crossed the advertising line. There is no gift here.
>
> BTW, providing a link to their website isn’t an issue but the color ad
> could also be a problem depending on it's contents.
>
> John
>
> John Taylor
> 919.816.5903
> johntaylorconsulting@gmail.com
>
> Big ideas; small keyboard
>
> > On Jul 10, 2019, at 10:48 AM, Elizabeth Toman Tavares <
> eliza.toman@gmail.com> wrote:
> >
> > Hello all,
> >
> > I know I should know this but I'm getting turned around by some of the
> IRS publications about sponsorship vs. advertising. We recently received a
> check from Jimmy John's for their sponsorship of our Athletics department
> and in the contract Athletics signed with them, we agreed to the following:
> > - fully custom, corporate advertisement read during every home sports
> broadcast
> > - logo advertised in ad space on university athletics home page
> > - quarter-page, full color ad in football soccer, and basketball game
> programs
> > - Jimmy John's banner displayed at athletic complex and basketball gym.
> >
> > I've put the custom advertisement below for reference. While I'm not
> concerned about any mentions of qualitative or comparative language or
> pricing information, the ad does recommend buying sandwiches from Jimmy
> John's. This makes me think that by reading the text at games, the payment
> ceases to be a gift.
> >
> > I'm also concerned that the logo on the athletics site will disqualify
> the payment as tax deductible since clicking on it goes to a page where
> products are marketed or sold.
> >
> > As always, thanks for your help.
> >
> > Elizabeth
> >
> > Elizabeth Toman Tavares
> > Director of Advancement Services
> > North Park University
> >
> > Ad information:
> > • Jimmy John’s is proud to sponsor North Park University Athletics.
> At Jimmy John’s, they spend 6 hours prepping every day – baking bread,
> slicing all-natural meats, and slicing fresh veggies – so they can make you
> a sandwich in just 30 seconds. Because sandwich. Order today at Jimmy
> John’s dot com.
> > • Jimmy John’s is proud to sponsor North Park University Athletics.
> Jimmy John’s knows how much you care about freshness, quality and value.
> That’s why they spend six hours slicing and baking every day to make your
> sandwich in 30 seconds. They bake fresh bread all day, so it’s always
> served less than four hours out of the oven. They slice all-natural meats
> to perfection, and they hand-slice fresh veggies daily. Because sandwich.
> Order today at Jimmy John’s dot com or with their app.
>