Community Partners does not allow fundraising through the sale of advertising. Revenue from advertising is subject to unrelated business income tax (UBIT), unless the activities involved are substantially related to your project’s tax-exempt purpose. The IRS defines advertisements as including qualitative or comparative language, price information, or other indications of savings or value, and endorsements or inducements to buy, sell, or use products or services.
In contrast, sponsorships are an appropriate, and often beneficial, form of fundraising. Sponsorships are payments made by businesses with no expectation of receiving any substantial benefit in return for the payment. Sponsorship dollars are not subject to UBIT. Sponsorships allow the use of established product logos and tag lines, and can entail product display or distribution.
For example, when a business fundraises for your project by donating a percentage of their sales of certain items or on certain days, this is generally considered a sponsorship. You can even announce this sponsorship on your website or through an email or flyer to your mailing list. Contact our programs team if you have questions about this or other forms of sponsorship.