External Sponsorship of University Programs and Events

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Policy Number:
UW-204
Responsible Office:
Office of Strategic Communication

University Policy

Rationale/​Purpose:

This policy describes the conditions and requirements applicable to the receipt of sponsorship support from non-university entities for university or registered student organization (RSO) events, programs, publications, or other activities

Definitions:
Acknowledgment
Public recognition of sponsorship support that consists of mere recognition of sponsorship payments and may include sponsor logos and slogans (that do not contain comparative or qualitative descriptions), sponsor locations and telephone numbers, value-neutral descriptions (including displays or visual depictions) of a sponsor’s product-line or services and sponsor brand or trade names, and product service listing.
Advertising
Public recognition of sponsorship support that includes messages containing qualitative or comparative language; price information or other indications of savings or value associated with a product or service; an endorsement or inducement to purchase or use the sponsor’s company, service, facility or product, or which otherwise falls outside of the Internal Revenue Service rules for qualified sponsorship payments.
Endorsement
Any statements or depictions that can be reasonably construed to contain or imply a preference by the university, by any of its units or employees speaking or acting as representatives of the university, or by an RSO for one non-university interest over any other.
Exclusive Provider Agreement
An agreement with a sponsor to limit the sale, distribution, availability, or use of products or services to only those of the sponsor in connection with a university activity (for example, an arrangement where only one bakery’s cookies will be available at an event or across campus). These are distinct from exclusive sponsorship arrangements, which limit the type of sponsor sponsoring the event (for example, an arrangement where only one bakery sponsors an event).
Qualified sponsorship
A payment by a sponsor where there is no arrangement or expectation that the sponsor will receive any substantial return benefit in exchange for the payment.  The only return benefits to the sponsor are an acknowledgment of the sponsorship, or goods and services that are of a nominal value and are disregarded for purposes of charitable contribution deductions under Internal Revenue Service rules.
Sponsorship
The provision by a non-university entity of money, goods, or services to a school, college, department, unit, or RSO in support of one or more activities, events, or programs. In return, the sponsor may be provided an acknowledgment of the sponsorship, as defined below, event tickets or programs, food, beverages, or other tangible return benefits. Sponsorships, and sponsorship acknowledgments, are not advertising, which is governed by a separate policy, and may not include an endorsement, as defined below. Sponsorships may fall into one of two categories, also defined below.
Substantial Return Benefit
Any benefit other than a use or acknowledgement of the sponsor’s name or logo, or disregarded benefits. A benefit is disregarded if the aggregate fair market value of all the benefits provided to the payor during the organization’s taxable year is not more than 2% of the amount of the payment. Examples of substantial return benefits include advertising, exclusive provider arrangements, goods, facilities or services, or rights to use the name, logo or trademarks of the university in the sponsor’s own advertisements. If there is an arrangement or expectation that the payor will receive a substantial return benefit with respect to any payment, then only the portion of the payment that exceeds the fair market value of the substantial return benefit is a qualified sponsorship payment.
Scope:

This policy applies to schools, colleges, departments, academic or administrative units, and registered student organizations (RSOs) which obtain external sponsorship support.

Policy:
  1. It is generally permissible for the university, schools, colleges, departments, units and RSOs to accept sponsorship for events, programs, publications or other activities from business and other external organizations.
  2. Accepting sponsorship from an external organization implies alignment between the mission and values of the university with the mission and values of the sponsor. Depending on the unit or event, it may be advisable and is permissible to decline sponsorship support from a particular industry or organization.
  3. Certain types of sponsors and sponsor messages are incompatible with university values and are not permitted.  For example, a sponsorship is unacceptable that:
    1. is in conflict with university policies.
    2. adversely affects the university’s reputation.
    3. appears to create an endorsement by the university of a particular company, product, political candidate, or position regarding public policies.
    4. contains obscene, indecent, or profane material.
    5. ridicules, exploits, or demeans persons on the basis of their age, color, creed, physical or mental disability, physical appearance, national origin, citizenship, veteran status, marital status, race, religion, sex, sexual orientation, gender or gender identity.
    6. promotes tobacco products.
  4. Sponsorship by alcohol companies or organizations associated with gaming is subject to additional review by the vice chancellor for strategic communication or designee before such sponsorships may be accepted.
  5. It is strongly recommended that campus units structure Sponsorship arrangements to meet the qualified sponsorship requirements so that income from sponsorships may be treated as tax-deductible donations. Income from sponsorships that are not qualified sponsorships may be taxable as unrelated business income and require complicated tax reporting. Non-qualified sponsorships must be reviewed by the unit’s business office, with input as needed from the tax compliance manager in the Division of Business Services, before formalizing the relationship.
  6. Sponsorship of a university or RSO activity or event itself does not automatically give the sponsor the right to use any university trademarks, names, or logos. Permission must be granted by the vice chancellor for strategic communication or designee and such arrangements must be reviewed for potential substantial return benefit and/or unrelated business income and include agreement terms defining the scope of use.
  7. The Internal Revenue Service generally considers exclusive provider arrangements to result in a substantial return benefit to the sponsor. Accordingly, if a sponsorship is dependent on an exclusive provider arrangement, only the portion of the sponsorship that exceeds the fair market value of the exclusive provider arrangement and any other benefits is a qualified sponsorship and not unrelated business income. University units considering an exclusive provider arrangement are encouraged to contact the tax compliance manager in the Division of Business Services before formalizing the relationship.
  8. Only qualified sponsorship payments may be deposited with the UW Foundation, and appropriate documentation must accompany deposits to enable accurate accounting and gift receipting. Sponsorship payments, or any portion thereof, which do not meet the definition of qualified sponsorship are revenue and must be deposited in a university account in accordance with UW-3029 Revenue Accounting.
  9. Designation of “official,” exclusive, or campus-wide sponsors of the university or its programs must be approved through the Office of the Vice Chancellor for Strategic Communication.
  10. Instances where campus units intend to sponsor an event at another agency by providing funding are outside the scope of this policy and should be routed through purchasing when they exceed $5,000 or include contractual terms. When a non-competitive purchase request form is required, the description should indicate the anticipated benefits to the UW of the sponsorship agreement, such as marketing UW programs or recruiting students or faculty.
Related UW-Madison Policies:

Policy Administration

Approval Authority:
Vice Chancellor for Strategic Communication
Policy Manager:
Assistant Vice Chancellor, Strategic Communication
Contact:
Assistant Vice Chancellor, Strategic Communication -- Tricia Nolan, tricia.nolan@wisc.edu, (608) 265-9005
Revised Dates:

01-15-2021, 06-21-2024

Retrieved:
07-26-2024 21:51:36