Sponsoring
What it is
The sponsor pays, the sponsored party makes it visible. The contract states the media (jerseys, posters, website, social networks), the duration, any exclusivity and what each may say about the other. Sponsoring is the most common funding mode of sport and culture, and for a few years it has opened to social projects, where the visibility rests on a result that lasts.
Legally it is a service contract: the sponsored party sells visibility, it invoices, VAT applies when it is VAT-registered, and the sponsor books an advertising expense. That is what sets it apart from donations and patronage, where nothing is sold.
The forms
- Event sponsoring: a festival, a race, a conference; the visibility lasts as long as the event and its communication
- Organisation sponsoring: a club, a team, an association; the visibility follows the season or the year
- Social sponsoring: a project of general interest with a lasting result, such as a website that stays online for years
- In-kind sponsoring: equipment, services or time against the same visibility, valued in the contract
What a good contract contains
A good sponsoring contract fits on one page: what is paid, what is made visible, on which media, for how long, who produces the media (the high-resolution logo, the profile), and how delivery is proven. Counterparts are dated: "logo on the website from go-live", "thank-you campaign at the end of the cohort". That list is what the final report is made of.
Two points often forgotten: the right to use the association's name and logo in the sponsor's communication (and the other way round), and what happens if a counterpart is not delivered. Writing these two lines avoids most misunderstandings.
In Kern4Good
The sponsorship packs (Friend, Supporter, Partner, Impact, Association Sponsor) are social sponsoring contracts: each pack lists its counterparts, from the name cited in the thank-you campaign to the logo on the associations' websites, the dedicated page and consulting days at KERN-IT. The delivered websites also include a partners section to host each association's own sponsors: the programme encourages associations to find theirs. The packs are on the Companies page.
Further reading
- Social sponsoring, the other way to do marketing
- Patronage, sponsoring,donation: the three frameworks
Is sponsoring subject to VAT?
Yes, it is a service. The sponsored party's invoice carries VAT when it is VAT-registered; a small non-profit that is not registered invoices without VAT. KERN-IT invoices the Kern4Good packs with VAT.
Can an association look for its own sponsors?
Of course, and the programme encourages it: the counterparts (logo, partners page) are planned on the delivered websites to host each association's own sponsors too. A local company is often the first to say yes.
What is the difference between sponsoring and advertising?
Advertising buys a space; sponsoring buys an image association with an activity or a cause, and the visibility that comes with it. The accounting treatment is the same: a communication expense, with an invoice.
What if the sponsor wants to influence the project?
The contract says what the sponsor gets: visibility, not a say on the activity. An association keeps its independence; that is even what gives value to its recommendation.