There are many fundraising events where business and/or individual sponsors play an important role.Â Here is a great question that we recently received on this topic:
What is the role of sponsors? Is the money raised through sponsors only used to help reach the goal or can some funds be used to help with running the event?
Thanks you for your time,
First let’s clarify that by “sponsors” we are referring to companies who are recognized in an event program or other advertising. In that case companies will put the donation into the “advertising” category of their accounting. Because you are offering them advertising in exchange for the money, they generally cannot claim it as a charitable donation for tax & accounting purposes.Â It would be best to consult with an accountant regarding more specifics about tax receipts.
Unless the donor specifies otherwise, all money that comes in for an event can be used for planning and running of the event.Â Most people will assume that some of their money must go toward planning and overhead. However, many supporters also want assurance that the bulk of their gift goes toward your cause, and its programs, not administrative costs.
This is another way that corporate sponsors can help out.Â If you can get a company to “underwrite” the cost of a certain aspect of the event, then individuals can make donations to the charity and know their gift is going toward mission.Â For example, if you were hosting a walk-a-thon, the cost of the sound and timing equipment could be paid for by a particular company.Â Your organization would recognize them through banners, recognition in flyers and publicity, as having donated this specifically.Â Then when walkers get pledges or make personal donations, their gift goes toward the cause more directly.