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  • 1.  Sponsorship QPQ?

    Posted 04-11-2024 12:21 AM

    My institution is evaluating holding a public forum, free and open to the public.  They are considering offering sponsorship opportunities for several 501c3 organizations to help defray the cost of the event. 

     

    Right off the bat, I think that tax deductibility might not matter to these organizations, but let me lay out the potential sponsorship benefits.  Most are recognition only.  Does it matter the extent of the recognitions – how many impressions/mentions?  I'm also curious about VIP seating (for a free event).

     

    1. Organization logo on marketing materials, advertising, website, news release, and correspondence related to the event.
    2. Org logo on on-site event signage
    3. Verbal acknowledgement by moderators
    4. On-air underwriting credit via radio
    5. X number of reserved VIP tickets for the event. 

     

    Would there be a quid pro quo there, or is this sponsorship entirely an outright gift?

    Thank you!

     

    Meg Tallman
    (she/her)
    Senior Director, Gift Administration and Data Management

    University of Delaware  |  Office of Development & Alumni Relations
    83 East Main Street, Third Floor, Newark, DE 19716

    302-831-2308  |  www.udel.edu/alumni-friends  


    CONFIDENTIALITY NOTICE: This email, including any attachments, contains information from The University of Delaware, which may be confidential or privileged. The information is intended to be for the use of the individual or entity named above. If you are not the intended recipient, be aware that any disclosure, copying, distribution or use of the contents of this information is prohibited. If you have received this email in error, please notify the sender immediately by "reply to sender only" message and destroy all electronic and hard copies of the communication, including attachments.

     

     



  • 2.  RE: Sponsorship QPQ?

    Posted 04-11-2024 04:52 AM
    The question regarding sponsorships is not as much about tax deductibility. It is more about whether the payment results in advertising opportunities. While the sponsor may not be eligible to receive a tax deduction as is true for a 501c3, their payment could still be defined is paying for advertising - which becomes taxable income to you. And there is the problem.

    As long as the "advertising" you offer to these organizations does not involve more than name, logo, and contact information - and mentions of thanks for sponsoring without offering endorsements or inducements to use their services - you should be fine. Please locate a copy of the ASAE summary of permissible activities in the archives I have shared many times.

    I am not concerned about "VIP" seating since this is a free event.

    John

    John H. Taylor
    919.816.5903 (Cell/Text)

    Big Ideas; Small Keyboard



    Original Message


  • 3.  RE: Sponsorship QPQ?

    Posted 04-11-2024 01:51 PM
    The issue of sponsorship is mainly whether it generates UBIT for you, but generally, co-sponsorship arrangements between nonprofit organizations can be structured not as a sale of sponsorship benefits in exchange for a payment, but rather, a sharing of program costs incurred for mounting a program consistent with the missions of all the related organizations. There is no UBIT in such a case, though this does have practical limits - not every event can truly be on-mission for any nonprofit. 

    Even within the UBIT analysis, what is considered UBIT is:
    1. payments contingent upon reaching a minimum number of attendees/listeners/receipients
    2. Any advertising
    3. Acknowledging the sponsor in your ongoing communications that are not related to the sponsored event
    4. Any payments connected with trade shows, conventions, etc. 
    I don't see any of that present in your program, so long as signage, etc. do not include qualitative claims or comparisons to others that would make them into ads.


    Thank you,
    Isaac Shalev
    Data Strategy Expert
    Sage70, Inc.
    (917) 859-0151
    isaac@sage70.com

    Schedule a 30-minute consultation now:




    Original Message


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