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PUBLIC RELATIONS

In colloquial language, we often do not even no- nisation that is registered as a charity, you are
tice the difference. And yet there it is - and its big. entitled to tax relief for the donation. These
The main difference between a sponsorship donations can be deducted from your compa-
and a donation is that sponsorships are based ny’s profits for the year in which the donation
on reciprocity – where cash or in-kind gifts are is made, meaning you may be liable to pay less
contributed, usually in exchange for marke- corporation tax.
ting or advertising consideration. The UK law sets out there the difference
Sponsorship usually means supporting spe- between sponsorship and donation clearly:
cial or ongoing events, activities, or organiza- “Charity sponsorship payments are different
tions. This is done financially or through the from donations because your company gets so-
provision of products or services. mething related to the business in return.”
Sponsorships are more of a marketing tactic, Of course, both strategies – donation and
putting a company’s name on an event or ad sponsorship – are worthy, and definitely have
to boost revenue. Donations are charitable in their place. Although sports, culture, educa-
nature and purely benefit the organization at tion, health support or care for the helpless,
hand. Sponsorship is highly public. sponsorship and donation call for giving mo-

Money usually comes from the marketing, ney to a third party in an effort to improve
advertising or communications budget and is their performance, the two things are substan-
decided by the person(s) managing these areas. tially different from a marketing point of view
A donation is an altruistic gift, either with – or, they should be...
a general charitable purpose or for the sup- Donation shouldn’t ever be used for mar-
port of a particular project. keting purposes. Yes, the recipient can thank
Donations may come in the form of cash or you publicly, which will affect your reputati-
in-kind gifts such as gift vouchers from a local on. And so it is right. There is less public fan-
retail store, food from a supermarket, office fare around this type of giving. Donors are
equipment from a small business, etc. usually thanked privately, often with a perso-
It should be considered as a goodwill con- nalized acknowledgment, and in a quiet way.
tribution, without the need for anything in ex- Even so, they are gaining recognition.
change from the non-profit organization. While donations are not made for marketing
Sponsorship is a cost item in your accoun- purposes, a business can (and should) let their
ting, while a donation is a payment from the community know that they have recently do-
distribution of profits. nated to a charitable cause. It’s always great to
But there are states that support donations. share that warm and fuzzy feeling when you’-
If you’re making a donation to a team or orga- ve done something charitable!
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