Creating a relationship with your corporate sponsors is like building a burrito: you can’t put one thing in it and call it a day, especially if the ingredient is gassy.
Filling your corporate sponsorship burrito with different benefits and knowing exactly what you can and can’t put in it creates the perfect recipe for success and doesn’t leave your sponsors with a bad taste in their mouth. Differentiating between corporate sponsorship and advertising can be the key to making the most of corporate interest and avoiding headaches during tax season.
During session at the Bridge to Integrated Marketing and Fundraising Conference, Shiree Skinner, director of resource development at Habitat for Humanity of Northern Virginia, spoke regarding the key differences between sponsorship and advertising. In “Corporate Sponsorships: Nonprofit Donation vs. Corporate Marketing,” Skinner noted that:
- Sponsorships should be a mutually beneficial partnership; you need to offer more than just a listing in the program. Some perks could include, event tickets, logo placement, special meet and greets, or volunteer opportunities for staff.
- In a sponsorship, the main goal is to support the charitable organization. Use of logos and slogans on nonprofit event materials and acknowledgments is permitted, but qualitative or comparative statements constitute advertising.
- Nonprofits might be subject to Unrelated Business Income Tax if the business receives advertising benefits.
- It is important to involve your finance team early on for general finance and audit compliance.
- Be open to feedback from your sponsors. They will get the most of their sponsorship if they are on board early.