Sponsorship vs Corporate Giving
What’s the difference between sponsorship and corporate giving?
Often the two terms are talked about interchangeably which is confusing – they are 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?
Corporate giving is a charitable donation and, as such, companies can claim tax relief on the value of their donation.
So, unlike sponsorship, we can’t put a corporate donor’s logo all over our promotional material. A corporate donation is philanthropic and not about what benefit you will get. Employees can volunteer for our charity though and raise money through their own events and activities (or getting involved in yours).
Which is right for you?
Meaning of “sponsorship:” This is not a defined term in the Act. CRA takes the view that “sponsorship fees” are “not gifts because the sponsor receives something in exchange” and “they are usually paid to support a charity event in return for advertising or some other consideration.” Pointed out in an employee speech by a senior official of CRA, the word “sponsorship” is poorly defined and it could take on different meanings. CRA pointed out that there is some confusion as to the proper use of the term, and some question on the part of recipient charities as to whether they should be issuing receipts or not, in light of the proposed arrangement between them and the sponsor. CRA pointed out that the Concise Oxford Dictionary gives several definitions of First, the corporation can obtain a donation receipt for having made a gift. The deduction of sponsorship fees as business expenses under is not limited, provided that the deduction is made in respect of an outlay or expense that was reasonable. A charitable tax deduction can be carried forward for a period of five years, while a sponsorship fees must usually be deducted within the fiscal year in which it was made.