I'm certain I'll regret this tomorrow but I do still follow this group and rely on its advice both. I also hope to see you in Chicago to debate this over a drink.
Having spent a great deal of time on Qualified Sponsorships these past several months, I'm not quite aligning with views proposed so far.
A qualified sponsorship looks at payments (Corp will give X) and benefits proposed in return. "We'll give X" is the gift portion. Your org offers Y in "advertising" in return. The question becomes all about the "advertising" offered in return. And the language has a major role!! But think of it as individual donor recognition for a gift. As long as that "recognition" doesn't breech the IRS standard for "advertising" the CONTRIBUTION is still a gift. Your NPO controls that language and the agreements that support it.
Should Org "Y" offer benefits that are true advertising (per IRS definition) then those values would need to be recorded as FMV or Non-gift (or not at all depending on your procedures).
The real crux that this colleague is questioning and is at the root of the answers posted to date is the "contract."
What is essentially different about a "contract" that says "we'll recognize you by doing this" and a GIFT AGREEMENT that says "we'll recognize you by doing THIS?"
My argument, of course, is nothing. Subtleties of language.
The differences are:
1) corporate entity
2) gift agreement vs contract
Let's not forget that the purpose of a gift agreement is for the parties to hold each other liable to each end of the deal. It shouldn't be technically different from the defcon "threat" level over which we're willing to take one another to court. And no one wants to do this really in either circumstance. Probably with the corporate entity, the contract has been reviewed and approved by an attorney. For an individual, the gift agreement may or may not have been through such a review (though hopefully for the receiving org's side it has in both cases!)
Therefore, buying advertising on behalf of our non-profit org, and offering recognition to our sponsor or donor within that advertisement, is still a form of recognition (messaging done correctly) and that sponsorship a corporate type of gift.
"Come see our new exhibit yyy, sponsored by Coca-Cola" is NOT advertising for Coca-Cola, no matter what the "contract" (read 'gift agreement') says. "Sponsored by Coca-Cola" is just as much recognition as "presented by the ABC Foundation" is. Recognition. Sponsorship isn't a dirty word because it's supported by a different type of agreement, is it? Or let's change that template.
SO that's a short version of my assessment following legal counsel as well as drilling a sponsorship development vendor this year. Completely open for debate. But I do feel this group has been overbearing on this topic.
My best to all,
Space Center Houston
Sent from my iPhone.
Please excuse typing errors.