Corporate Sponsorship

Under regulations (T.D. 8991) on Section 1.513-4 concerning “qualified sponsorship payments,” ministries can acknowledge corporate sponsorships, avoiding the activity of being subject to the unrelated business income (UBI) rules. However, “advertising” is subject to the UBI guidelines. The key subparagraphs are in Regulation Section 513-4 (iv) as follows:

 (iv) USE OR ACKNOWLEDGMENT. For purposes of this section, a substantial return benefit does not include the use or acknowledgment of the name or logo (or product lines) of the payor’s trade or business in connection with the activities of the exempt organization. Use or acknowledgment does not include advertising as described in paragraph (c)(2)(v) of this section, but may include the following: logos and slogans that do not contain qualitative or comparative descriptions of the payor’s products, services, facilities or company; a list of the payor’s locations, telephone numbers, or Internet address; value-neutral descriptions, including displays or visual depictions, of the payor’s product-line or services; and the payor’s brand or trade names and product or service listings. Logos or slogans that are an established part of a payor’s identity are not considered to contain qualitative or comparative descriptions. Mere display or distribution, whether for free or remuneration, of a payor’s product by the payor or the exempt organization to the general public at the sponsored activity is not considered an inducement to purchase, sell or use the payor’s product for purposes of this section and, thus, will not affect the determination of whether a payment is a qualified sponsorship payment.

 (v) ADVERTISING. For purposes of this section, the term advertising means any message or other programming material, which is broadcast or otherwise transmitted, published, displayed or distributed, and which promotes or markets any trade or business, or any service, facility or product. Advertising includes messages containing qualitative or comparative language, price information or other indications of savings or value, an endorsement, or an inducement to purchase, sell, or use any company, service, facility or product. A single message that contains both advertising and an acknowledgment is advertising. This section does not apply to activities conducted by a payor on its own. For example, if a payor purchases broadcast time from a television station to advertise its product during commercial breaks in a sponsored program, the exempt organization’s activities are not thereby converted to advertising.

For specific application of these regulations, ECFA recommends consulting your CPAs or attorneys.


This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.

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