Corporations engage with UT Austin in numerous ways, one of which is through sponsorship of university programs. Sponsorships can be either charitable or non-charitable, as determined by the IRS. Broadly speaking, a sponsorship is charitable when the corporation pays for all or some of the costs associated with a project or program and receives recognition for its support. Recognition may mean that the company is identified in signage as a contributor to the program or acknowledged in another way.
Sponsorship or Advertising?
When the company receives something of commercial value in exchange for its financial support, this is considered advertising rather than a charitable sponsorship. The IRS lays out distinct differences between advertising and sponsorship, in terms of what is charitable and not charitable. In general, any payment or activity that is not advertising is regarded by the IRS as sponsorship or recognition and therefore permissible under the rules for charitable contributions.
The information below is excerpted from IRS Publication 598:
“This is any payment made by a person engaged in a trade or business for which the person will receive no substantial benefit other than the use or acknowledgment of the business name, logo, or product lines in connection with the organization’s activities. ‘Use or acknowledgment’ does not include advertising the sponsor’s products or services. The organization’s activities include all its activities, whether or not related to its exempt purposes.”
“A payment is not a qualified sponsorship payment if, in return, the organization advertises the sponsor’s products or services. For information on the treatment of payments for advertising, see Exploitation of Exempt Activity—Advertising Sales in chapter 4.
The use of promotional logos or slogans that are an established part of the sponsor’s identity is not, by itself, advertising. In addition, mere distribution or display of a sponsor’s product by the organization to the public at a sponsored event, whether for free or for remuneration, is considered use or acknowledgment of the product rather than advertising.”
For more information about sponsorships at UT Austin, view the links below or contact Jill Bond at firstname.lastname@example.org or 512-475-9628.