Sponsorship agreements are often negotiated by both parties as important contracts. Both the economic promoter and the non-profit organization want to ensure that the agreement is fair and beneficial to their cause. A typical agreement contains terms such as: tax sponsorship is often used by newly created non-profit organizations, which must raise money during the start-up phase before being recognized as exempt by the IRS. The use of tax sponsorship allows a program or organization that is not itself considered tax-exempt to obtain funds for its transactions which – via the tax sponsor – are tax deductible for donors. As a result, tax sponsorship agreements benefit organizations or programs that are not tax-exempt by providing a debit route for income that the organization might not otherwise be able to collect. Note that corporate sponsorship may result in an involuntary tax liability, including for tax-exempt non-profit organizations. We advise you to read the Non-Profit Council`s resources for the tax treatment of corporate sponsorship income, so that you can distinguish between tax-free charitable contributions and payments from a corporation to the non-profit organization that will label the IRS as “independent business income.” The Church Law Center of California serves religious and secular non-profit organizations throughout California. Call us today to talk about your organization`s sponsorship plans. We can help you develop a form agreement or negotiate terms to protect your organization`s mission. Contact us at (949) 689-0437 or via our contact page. When negotiating a sponsorship contract, a non-profit organization can benefit from a clear idea of what it offers in exchange for sponsorship. Companies that sponsor non-profit events do so on the end of the day, expecting their contribution to the event to be of considerable value to the company. The sponsor realizes the value by regular and high-level use of its name and logos, and by its association with one thing that is in its analysis is one that its customers also want to support.
Economic promoters expect their beneficiaries to take steps to involve them in speeches, promotional materials and other event-related activities. This also applies to the social media accounts of the non-profit organization. Many sponsors will expect some control over the use of their name and logos, with some insisting on full supervision of any communication containing his name. A non-profit organization must take these requirements seriously, including staff training, in order to meet the sponsor`s expectations. Business sponsorship support is a payment from a company to a non-profit organization to promote the mission of the non-profit organization, generally recognized by the non-profit organization, recognizing that the company has supported the activities, programs or special events of the non-profit organization. Corporate sponsorships attract the attention of for-profit businesses because sponsorship thieves publicly recognize the connection between the company and a particular charitable cause, which can help businesses attract new customers or enhance the company`s reputation, because the goodwill of the non-profit organization “Halo-Effekt” is good.