BNP Newsletter-Fall 2011
The sponsor versus the donor: a right to visibility for recognition ?
By Jean-Nicholas Marziali, vice-President, BNP Stratégies
The donor wants recognition and the sponsor, visibility. However, the difference between the two is easily confused. You have probably already experienced a situation where a donor wanted his/her donation to be treated as a sponsorship, and vice versa.
The golden rule: the donation is tax deductible whereas the sponsorship is attached to a service of visibility and is tied to a business transaction.
The sponsorship implies an obligation for your organization. The sponsor provides funds or services for a determined activity and accepts to be tied to your organization for an event, an activity, a program that will in turn give them an image that the public will associate to a just cause. The sponsor therefore wants public recognition for its support to your organization. If you receive or treat a contribution as a sponsorship, you cannot provide an income tax receipt for this contribution.
The donation is a gift with no expectation of a measurable benefit to the donor. The law states that a contribution where the donor receives an advantage can still be considered a donation in certain circumstances and the donor can declare the admissible amount. This is the reason why a donor recognition policy is essential for the development of an organization receiving philanthropic revenues.
Donor Recognition Policy
The necessity to thank a donor for their generosity goes without saying, but thanking hundreds of donors requires an organized system – it’s a question of volume and equity. Overly recognizing a small donor publicly, can seem unjust to larger donors.
The elaboration of a donor recognition policy is one of the most important tools in any fundraising program. It will include two essential elements: a thank you on the one hand, and means of recognition on the other.
Thank you
After a contribution, the donor needs feed-back for three reasons:
- To know rather quickly that the gift has been received by the organization;
- To have the acknowledgement that the gift is being used for the destined purpose;
- To know that the project was a success thanks to the campaign to which the donor contributed.
Acknowledgements can take many forms – written or verbal. They will be established according to the level of the donation. We can also use many means to thank a donor for the same gift, and establish different levels of acknowledgement according to the size of the gift. Below is a list of the most frequent acknowledgement methods:
- Thank you card
- Thank you letter
- A telephone call to thank the donor for donation
- In person thank you
Recognition methods are authorized and planned in a donor recognition program.
Like the acknowledgements, the recognition methods can take many forms and be cumulated to form a program according to the different gift levels.
Here are a few examples:
- mention of gift in organization’s publications;
- mention of gift on website;
- mention of gift on campaign donor wall;
- mention of gift in the media;
- photo of donor in organization’s publications;
- photo of donor in media;
- dedication of a space or commemorative plaque in a strategic location;
- party for donors;
- souvenir for donors;
- creation of a special club for donors where they would be invited to participate in and become increasingly associated with the organization for the mutual benefit of the donor and the organization.
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