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Posts Tagged sponsor

Use of Sponsor Web Links – DCCPTA Board Committee Report – Condensed Version

Committee members: Richard Godke – web@dccpta.org
Delores Appleby – Parliamentarian@dccpta.org
Cathy Guiler – Parliamentarian@dccpta.org
Mindy Eisman – Health-Safety@dccpta.org
Revised Date 10-15-2016

The DCCPTA Board appointed a committee to address the question.  “Can a local PTA, in accordance with IRS regulation, recognize a sponsor by posting a link back to their website?”

Disclaimer: No one on this committee is a lawyer or a tax professional and your PTA should consider this document as information only, not professional legal or financial advice.

According to Jean Hovey, Florida PTA Executive Director, “The safe way is to “Thank” the sponsor/business, not include a direct link to their business.”  After extensive research it was found both the Florida PTA and the National PTA recognize sponsors by posting a link back to their website.  It was also found that not for profit support organizations, law groups, and accounting firms believe that recognizing a sponsor by posting a link back to their website is not advertising and is legal according to their interoperation of the IRS code (SEE LINK).

So what does my PTA do?

  1. If a local PTA wants to avoid any questions regarding IRS interpretation. If they believe the sponsor links are considered advertising, they should not publish a sponsor link back to their website.
  2. If your local PTA uses less than the $1,000.00 per year limit for Unrelated Business Income (UBI), you can consider the link as (UBI) advertising and still avoid an IRS tax on that income.
  3. If a PTA interpret the IRS law that a sponsor link is not advertising (SEE LINK). And you chooses to post the sponsor’s link, then your PTA should: Use a software disclaimer that explains you are leaving the PTA website and your PTA is not responsible for anything on their website (see ATTACHMENT 1).  2. Local PTA units should have a signed Sponsor Agreement clarifying the agreement. (see ATTACHMENT 2)

What are the IRS penalties if they recognize a sponsor by posting a link back to their website as advertising?  The committee could not find any PTAs that has been cited for advertising with supporter link backs.  So no examples can be sited.  From IRS dealing with tax code violations, they would charge you for: the tax as an advertisement, interest on the amount of money not paid, and a penalty.  LINK HERE for more IRS information.

LINK HERE for full committee report.

Each Local PTA will need to make their own decisions on weather recognizing a sponsor by posting a link back to their website is worth the risk.

Use of Sponsor Web Links – DCCPTA Board Committee Report

Committee members: Richard Godke – web@dccpta.org
Delores Appleby – Parliamentarian@dccpta.org
Cathy Guiler – Parliamentarian@dccpta.org
Mindy Eisman – Health-Safety@dccpta.org
Revised Date 10-15-2016

Summary of Publishing Sponsor’s Link Back to Their Website Question

  • If a local PTA wants to avoid any questions regarding IRS interpretation. If they believe the sponsor links are considered advertising, they should not publish a sponsor link back to their website.
  • A PTA is allowed up to $1,000.00 per year limit for Unrelated Business Income (UBI). Advertising would be one item considered as a UBI.  So if you publish a sponsor’s link back to their website as an advertisement, and do not go over the UBI limit of $1000.00 you will still avoid an IRS tax.
  • If a PTA interpret the IRS law that a sponsor link is not advertising (see references supporting this view) and you chooses to post the sponsor’s link, then your PTA should: Used a software disclaimer that explains you are leaving the PTA website and your PTA is not responsible for anything on their website (see attachment 1).  2. Local PTA units should have a signed Sponsor Agreement clarifying the agreement. (see attachment 2)

Question

The DCCPTA Board appointed a committee to address the question.  “Can a local PTA, in accordance with IRS regulation, recognize a sponsor by posting a link back to their website?”

Example

The XYZ PTA recognizes these sponsors;

Joes Book Store
1111 Main Street
Jacksonville Florida 11111
Phone 904/000-0000
www.Joesbookstore.com

Florida PTA Position

Comments from Jean Hovey, Florida PTA Executive Director

“The safe way is to “Thank” the sponsor/business, not include a direct link to their business.”  “The decision for advertising and UBI would be up to each individual PTA.”  “All business postings should be carefully considered, with regarding to UBI, before posting of the website link, etc.”

The issue is in the definition of the revenue received for the posting of advertisement.  Advertisements are considered Unrelated Business Income (UBI).  A PTA is allowed up to $1,000.00 limit to Unrelated Business Income (UBI) per year.

 

Additional Factors to Consider

Revised Date 10-15-2016

Is listing the link considered advertising?  Review these findings to determine your Interpretation if a sponsors link as advertising.

  1. IRS’s definition of advertising does not include limits of sponsor web links. According to IRS – 3. Unrelated Trade or Business / Excluded Trade or Business Activities / Advertising, https://www.irs.gov/publications/p598/ch03.html#en_US_2014_publink100019559

Definition

Advertising includes:

  • Messages containing qualitative or comparative language, price information, or other indications of savings or value;
  • Endorsements; and
  • Inducements to purchase, sell, or use the products or services.

According to IRS’s definition, a link back to their website in my interpretation would not qualify advertising.

Interpretation

Printing sponsor website link does not containing qualitative or comparative language, price information, or other indications of savings or value. It is not an Endorsements; and does not Inducements to purchase, sell, or use the products or services

  1. National PTA Statement

The 2016–2017 National PTA, Official Back-to-School Kit, PTA Fundraising Quick Reference Guide, clearly allows for identification of the PTA sponsors.

Recognition Guidelines

“In return for sponsorship, a PTA may thank the sponsor for its contribution. The thank you may be in writing or on posters, banners or other appropriate media. The written acknowledgement must be limited to an expression of thanks and can list identifying information for the sponsor. The acknowledgement can never make a qualitative judgment regarding the sponsor or its product, and it cannot request that people patronize the sponsor or buy its products; otherwise, the sponsorship payment will be subject to federal income tax.”

Interpretation

Printing sponsor website link does not qualitative judgment regarding the sponsor or its product, and does not request that people to patronize the sponsor or buy its products.  A web address is an identifying information like a street address was 50 years ago.  Currently in some cases web links are the only form of company identification.  There are many companies that do not have street addresses to be identified by.

  1. Respected Greater Washington Society of CPAs clearly approves the use of websites links when recognizing sponsors

Sponsorships, Advertising, Endorsements and Cause Marketing: Understanding Critical UBIT Issues for Nonprofits

June 16, 2011 12:00 – 2:00 p.m. ET
Venable LLP
575 7th, Street, N.W., Washington, DC 20004

https://www.venable.com/files/publication/53acbc93-3732-480c-b1ba-4d40264e40dd/presentation/publicationattachment/d6758647-1a7f-468c-a461-3af6df931f43/sponsorships_advertising_endorsements_and_cause_marketing_understanding_critical_ubit.pdf

  1. Respected National Nonprofit Law Blog clearly approves the use of websites links when recognizing sponsors.

Nonprofit Law Blog
UBIT: Advertisements vs. Qualified Sponsorship Payments
By Erin Bradrick on March 13, 2014

http://www.nonprofitlawblog.com/ubit-advertisements-vs-qualified-sponsorship-payments

Qualified Sponsorship Payments
In contrast to advertising, a qualified sponsorship payment is any payment made to a nonprofit by an individual or company without an arrangement or expectation that the payer will receive a benefit in return.  The nonprofit may provide minor benefits in connection with a QSP without turning the QSP into advertising.  These minor benefits may include acknowledgement of the sponsorship through use of the donor’s name or logo, or goods or services of an insubstantial value.  If the nonprofit does provide the use or acknowledgment of a donor’s sponsorship, it should not include qualitative statements regarding or endorsements of the donor’s goods or services in the acknowledgment.  However, a use or acknowledgment may include a list of the donor’s locations, contact numbers, or website; a logo or established slogan; and value-neutral descriptions, displays, or depictions of products or services.  In general, the content of the use or acknowledgment should be controlled by the nonprofit and not by the entity making the payment

  1. Adler & Colvin A Law Corporation

CORPORATE SPONSORSHIP: FREQUENTLY ASKED QUESTIONS

“What acknowledgment can we give our sponsor without providing a substantial return benefit? You can acknowledge the sponsor by publishing its name; product lines; logos and slogans, as long as they don’t contain qualitative or comparative descriptions of its  products, services, facility or company; locations; telephone numbers; Internet URLs; and value-neutral descriptions, including displays or visual depictions, of its product lines or services.  You can also acknowledge the sponsor as your exclusive sponsor, or as your exclusive sponsor for a particular trade, business or industry.”

 

  1. The National PTA website use web links back to the sponsor’s website, some including sales info.

http://www.pta.org/about/content.cfm?ItemNumber=3019

Proud National Sponsors
Our highest level of corporate commitment, Proud National Sponsors make an annual investment in PTA which helps power key programs and services. We are especially grateful for their support and invite you to learn more about each of them.
Amazon Kindle
Kindle and National PTA are working together to help families get more involved in their children’s reading and enhance their emerging interest in books. In support of this mission, the PTA Family Reading Experience, Powered by Kindle, is an easily replicable event that local PTAs can implement within their schools to engage families in fun activities and provide them with tools and strategies to help their children become better readers. Connect with Kindle.

Interpretation
Listing sponsor website links are being used on the National PTA website.

  1. The Florida State PTA website they clearly use web links back to the sponsor’s website.

Links to https://legolandfloridatickets.legoland.com/LLF/Content.aspx?Kind=LandingPage

Interpretation

Listing sponsor website links are being used on the Florida PTA website.

Disclaimer

No one on this committee is a lawyer or a tax professional and your PTA should consider this document as information only, not professional legal or financial advice.

IRS Ramification

I could not find a PTA that has been cited for advertising with supporter link backs.  So I cannot give any examples of actual IRS penalties for using support link back.  From what I have seen from IRS dealing with tax code violations, they would charge you for the tax as an advertisement, interest on the amount of money not paid, and penalties

Additional Reference

IRS Unrelated Trade or Business

Conclusion

If your PTA wants to be safe they should not use a sponsor link to their website.  If a PTA interpret the IRS law that a sponsor link is not advertising (see references supporting this view) and you chooses to post the sponsor’s link, then your PTA should use sponsor links and:  1. Used a software disclaimer that explains you are leaving the PTA website and your PTA is not responsible for anything on their website (see attachment 1).  2. Local PTA units should have a signed Sponsor Agreement clarifying the agreement. (See attachment 2)


Link Off PTA Website to Sponsor’s Website Disclaimer Sample

Attachment #1

Richard Godke
DCCPTA Tech Chair
904-693-3501
rgodke@yahoo.com
www.dccpta.org
Revised Date 09-22-2016

If you offer a link to a sponsor off your PTA website you should always include a disclaimer.  This warns the user you are no longer on the PTA website and PTA does not control that information. Instead of a link that goes directly the sponsor the link goes to this message.  At the end of the message there is a link to the sponsor.  Try this is sample sponsor link.  XYZ Sponsor Sample

XYZ Sponsor Sample

You are leaving the XYZ PTA website. Offering this link does not imply endorsement by PTA. This web link is offered as sponsor identifying information not advertising.   PTA does not assume responsibility for the content of linked sites and does not independently verify or exert editorial control over information on the linked sites. PTA shall not be responsible or liable, directly or indirectly, for any damage or loss caused by or alleged to be caused by use of the linked site in any way.  Click Here to proceed.

XYZ Sponsor Sample Code

You are leaving the XYZ PTA website. Offering this link does not imply endorsement by PTA. This web link is offered as sponsor identifying information not advertising.   PTA does not assume responsibility for the content of linked sites and does not independently verify or exert editorial control over information on the linked sites. PTA shall not be responsible or liable, directly or indirectly, for any damage or loss caused by or alleged to be caused by use of the linked site in any way.  <a href=”http://smallfarminformation.com/” target=”_blank”>Click Here</a> to proceed.


Sample Sponsor Agreement – Attachment #2

The ______________________________ identifies the following company or individual as a
(PTA/ PTSA name)

PTA sponsor by listing:
Company or Individual Name: ________________________________

Address 1: ___________________________________________

Address 2: ___________________________________________

City _____________________ State ________ Zip __________

Phone #: _____________________________________________

Website link: _________________________________________

Logo (file name): ______________________________________

Agreement

As a sponsor your identification information will be included in a “PTA Sponsor List”.  As a sponsor, recognition of your web link does not imply endorsement by PTA. Your web link is offered as sponsor identifying information, not advertising. PTA does not assume responsibility for the content of linked sites and does not independently verify or exert editorial control over information on the linked sites. PTA shall not be responsible or liable, directly or indirectly, for any damage or loss caused by or alleged to be caused by use of the linked site in anyway.  Sponsor agrees to prohibit lobbying and electioneering on the connected web page.  A sponsor can be removed from the “PTA Sponsor List” if the PTA finds the sponsor not complying to set requirements.

Sponsor’s Name (print): ________________Signature: _______________Date: _________.

PTA’s Name (print): ____________________Signature: _______________Date: _________.

DCCPTA 09-28-2016

 

 

Additional Reference

IRS Unrelated Trade or Business

Sponsor Agreement – Sample – Attachment #2

The ______________________________ identifies the following company or individual as a
(PTA/ PTSA name)

PTA sponsor.  Please complete and return.
Company or Individual Name: ________________________________

Address 1: ___________________________________________

Address 2: ___________________________________________

City _____________________ State ________ Zip __________

Phone #: _____________________________________________

Website link: _________________________________________

Logo (file name): ______________________________________

Agreement

As a sponsor your identification information will be included in a “PTA Sponsor List”.  As a sponsor, recognition of your web link does not imply endorsement by PTA. Your web link is offered as sponsor identifying information, not advertising. PTA does not assume responsibility for the content of linked sites and does not independently verify or exert editorial control over information on the linked sites. PTA shall not be responsible or liable, directly or indirectly, for any damage or loss caused by or alleged to be caused by use of the linked site in anyway.  Sponsor agrees to prohibit lobbying and electioneering on the connected web page.  A sponsor can be removed from the “PTA Sponsor List” if the PTA finds the sponsor not complying to set requirements.

Sponsor’s Name (print): ___________________________________Signature: _________________________________Date: ______________.

PTA’s Name (print): ______________________________________Signature: _________________________________Date: ______________.

Disclaimer: No lawyer or a tax professional were use to prepare this sample.  Your PTA should consider this document as information only, not professional legal or financial advice.

Leaving the PTA Website Disclaimer – Sample – Attachment 1

Link Off PTA Website to Sponsor’s Website Disclaimer (Sample)

Attachment #1

Richard Godke
DCCPTA Tech Chair
web@dccpta.org
Revised Date 10-11-2016

If you offer a link to a sponsor off your PTA website you should always include a disclaimer.  This warns the user you are no longer on the PTA website and PTA does not control that information. Instead of a link that goes directly the sponsor the link goes to this message.  At the end of the message there is a link to the sponsor.  Try this is sample sponsor link.  XYZ Sponsor Sample

XYZ Sponsor Sample

You are leaving the XYZ PTA website. Offering this link does not imply endorsement by PTA. This web link is offered as sponsor identifying information not advertising.   PTA does not assume responsibility for the content of linked sites and does not independently verify or exert editorial control over information on the linked sites. PTA shall not be responsible or liable, directly or indirectly, for any damage or loss caused by or alleged to be caused by use of the linked site in any way.  Click Here to proceed.

XYZ Sponsor Sample Code

You are leaving the XYZ PTA website. Offering this link does not imply endorsement by PTA. This web link is offered as sponsor identifying information not advertising.   PTA does not assume responsibility for the content of linked sites and does not independently verify or exert editorial control over information on the linked sites. PTA shall not be responsible or liable, directly or indirectly, for any damage or loss caused by or alleged to be caused by use of the linked site in any way.  <a href=”http://smallfarminformation.com/” target=”_blank”>Click Here</a> to proceed.

Disclaimer: No lawyer or a tax professional were use to prepare this sample.  Your PTA should consider this document as information only, not professional legal or financial advice.

Legal Use of Sponsor Web Links

DCCPTA Board Committee Report Research Findings

Revised Date 10-15-2016

Is listing the link considered advertising?  Review these findings to determine your Interpretation if a sponsors link as advertising.

  1. IRS’s definition of advertising does not include limits of sponsor web links. According to IRS – 3. Unrelated Trade or Business / Excluded Trade or Business Activities / Advertising, https://www.irs.gov/publications/p598/ch03.html#en_US_2014_publink100019559

Definition

Advertising includes:

  • Messages containing qualitative or comparative language, price information, or other indications of savings or value;
  • Endorsements; and
  • Inducements to purchase, sell, or use the products or services.

According to IRS’s definition, a link back to their website in my interpretation would not qualify advertising.

Interpretation

Printing sponsor website link does not containing qualitative or comparative language, price information, or other indications of savings or value. It is not an Endorsements; and does not Inducements to purchase, sell, or use the products or services

  1. National PTA Statement

The 2016–2017 National PTA, Official Back-to-School Kit, PTA Fundraising Quick Reference Guide, clearly allows for identification of the PTA sponsors.

Recognition Guidelines

“In return for sponsorship, a PTA may thank the sponsor for its contribution. The thank you may be in writing or on posters, banners or other appropriate media. The written acknowledgement must be limited to an expression of thanks and can list identifying information for the sponsor. The acknowledgement can never make a qualitative judgment regarding the sponsor or its product, and it cannot request that people patronize the sponsor or buy its products; otherwise, the sponsorship payment will be subject to federal income tax.”

Interpretation

Printing sponsor website link does not qualitative judgment regarding the sponsor or its product, and does not request that people to patronize the sponsor or buy its products.  A web address is an identifying information like a street address was 50 years ago.  Currently in some cases web links are the only form of company identification.  There are many companies that do not have street addresses to be identified by.

  1. Respected Greater Washington Society of CPAs clearly approves the use of websites links when recognizing sponsors

Sponsorships, Advertising, Endorsements and Cause Marketing: Understanding Critical UBIT Issues for Nonprofits

June 16, 2011 12:00 – 2:00 p.m. ET
Venable LLP
575 7th, Street, N.W., Washington, DC 20004

https://www.venable.com/files/publication/53acbc93-3732-480c-b1ba-4d40264e40dd/presentation/publicationattachment/d6758647-1a7f-468c-a461-3af6df931f43/sponsorships_advertising_endorsements_and_cause_marketing_understanding_critical_ubit.pdf

  1. Respected National Nonprofit Law Blog clearly approves the use of websites links when recognizing sponsors.

Nonprofit Law Blog
UBIT: Advertisements vs. Qualified Sponsorship Payments
By Erin Bradrick on March 13, 2014

http://www.nonprofitlawblog.com/ubit-advertisements-vs-qualified-sponsorship-payments

Qualified Sponsorship Payments
In contrast to advertising, a qualified sponsorship payment is any payment made to a nonprofit by an individual or company without an arrangement or expectation that the payer will receive a benefit in return.  The nonprofit may provide minor benefits in connection with a QSP without turning the QSP into advertising.  These minor benefits may include acknowledgement of the sponsorship through use of the donor’s name or logo, or goods or services of an insubstantial value.  If the nonprofit does provide the use or acknowledgment of a donor’s sponsorship, it should not include qualitative statements regarding or endorsements of the donor’s goods or services in the acknowledgment.  However, a use or acknowledgment may include a list of the donor’s locations, contact numbers, or website; a logo or established slogan; and value-neutral descriptions, displays, or depictions of products or services.  In general, the content of the use or acknowledgment should be controlled by the nonprofit and not by the entity making the payment

  1. Adler & Colvin A Law Corporation

CORPORATE SPONSORSHIP: FREQUENTLY ASKED QUESTIONS

“What acknowledgment can we give our sponsor without providing a substantial return benefit? You can acknowledge the sponsor by publishing its name; product lines; logos and slogans, as long as they don’t contain qualitative or comparative descriptions of its  products, services, facility or company; locations; telephone numbers; Internet URLs; and value-neutral descriptions, including displays or visual depictions, of its product lines or services.  You can also acknowledge the sponsor as your exclusive sponsor, or as your exclusive sponsor for a particular trade, business or industry.”

 

  1. The National PTA website use web links back to the sponsor’s website, some including sales info.

http://www.pta.org/about/content.cfm?ItemNumber=3019

Proud National Sponsors
Our highest level of corporate commitment, Proud National Sponsors make an annual investment in PTA which helps power key programs and services. We are especially grateful for their support and invite you to learn more about each of them.
Amazon Kindle
Kindle and National PTA are working together to help families get more involved in their children’s reading and enhance their emerging interest in books. In support of this mission, the PTA Family Reading Experience, Powered by Kindle, is an easily replicable event that local PTAs can implement within their schools to engage families in fun activities and provide them with tools and strategies to help their children become better readers. Connect with Kindle.

Interpretation
Listing sponsor website links are being used on the National PTA website.

  1. The Florida State PTA website they clearly use web links back to the sponsor’s website.

Links to https://legolandfloridatickets.legoland.com/LLF/Content.aspx?Kind=LandingPage

Interpretation

Listing sponsor website links are being used on the Florida PTA website.

General Meetings:

General DCCPTA Meeting, Tuesday, September 26 @ 9:30 am - 11:00 am, hospitality 9:00 -9:30 a.m. meeting 9:30 am. Make sure your PTA/PTSA has a representative. Join us at:
Duval County Public Schools
School Board Building
Cline Auditorium, 1st floor
1701 Prudential Dr
Jacksonville, Florida 32207

PTA – Applications – Forms – Spreadsheets – Samples

Mailing Address:

DCC PTA
P.O. Box 5397
Jacksonville, FL 32247
Email DCC President
Email Local Unit Team