Sponsorship vs Corporate Giving
Spot the Difference
As I’m about to run a workshop on Successful Sponsorship, I thought I’d talk about the different types of corporate support that your non-profit could benefit from.
But first of all, what’s the difference between sponsorship and corporate giving?
Often the two terms are talked about interchangeably which is confusing – they’re not the same thing.
Sponsorship is a business transaction. Plain and simple. It’s not about philanthropy. It’s about benefits. What will the sponsor and your charity get out of this relationship?
As a business transaction, sponsorship tends to come out of marketing budgets (although this does vary depending on each company so you’ll need to do your research). If you’re in the UK, you’ll need to add VAT on top of your sponsorship. So if you need £10,000 remember to charge the company £10,000 PLUS VAT. Otherwise, at the end of the tax year, HMRC will charge you 20% and you’ll have to find it out of your own budget. Sponsors expect it to be added on top, so add it, put it to one side and have it ready for the tax man!
Corporate giving IS a charitable donation and, as such, companies can claim tax relief on the value of their donation. The flip side of this is that they have strict limits on what they can receive as a benefit. So, unlike sponsorship, you can’t put a corporate donor’s logo all over your promotional material or give them lots of tickets to your theatre productions (unless you don’t sell them in the first place). A corporate donation is philanthropic and not about what benefit they will get. Employees can volunteer for your charity though and raise money through their own events and activities (or getting involved in yours).
The tax situation is different depending on where you live, so be sure to check with your local tax autority BEFORE you negotiate the deal. But don’t worry about it. The tax man (or woman) is usually very helpful!
