Corporate Sponsorship vs. Advertising
We frequently receive questions from sponsored projects regarding the difference between corporate sponsorship and advertising. Our projects are always looking for ways to diversify their revenue streams and attracting corporations to give is an appealing option. While corporate support is not the strongest revenue stream out there, it doesn't hurt to approach a corporation when it's a good fit for the work you are producing.
Sponsored projects should keep a few things in mind when approaching corporations for support:
- our fiscal sponsorship program will not accept money from corporations (or any type of business) purchasing advertising from a project
- our fiscal sponsorship program does accept donations in exchange for corporate sponsorship
So what's the difference between the two? The IRS defines advertising as competitive pricing or product information created and provided by the corporation. Advertising is when the corporation creates the content.
Sponsorship is when you create the content and it should be limited to the sponsor's location, telephone number, web address, a neutral description of the sponsor's products or services, the sponsor's name, logo, or business card, and your thanks.
It's okay to acknowledge a corporation's support for a special event with a banner displaying the sponsorship information mentioned above, but if the corporation would like to give you specific text to display on the banner announcing their newest product, it will be considered advertising and is not a tax deductible donation that Fractured Atlas can accept for sponsored projects.
We're not doing this to be difficult! If you want to sell ads, go for it! We just can't be involved. If you're interested in brushing up on the tax laws surrounding corporate sponsorship and advertising, this blog delves in a bit deeper.
Please note that this blog post discusses legal concepts surrounding charitable tax laws. This post is provided for educational purposes only, is not a comprehensive treatment of the topics addressed, and is not legal advice. If you need legal advice, please consult a lawyer.