How to Write a Sponsorship Contract
Identify the parties to the agreement and the agreement's effective dates., State the purpose of the agreement or the goal to be achieved., Describe the rights, duties, and responsibilities of the corporate sponsor., Describe the rights, duties, and...
Step-by-Step Guide
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Step 1: Identify the parties to the agreement and the agreement's effective dates.
Include the full legal name of the business as well as the non-profit organization, along with a full description of the non-profit organization's tax-exempt status if applicable.
This section also should include basic contact information for each party to the agreement, such as addresses and phone numbers. -
Step 2: State the purpose of the agreement or the goal to be achieved.
Ideally the sponsorship should have a concrete goal beyond the business's desire to improve its reputation and the non-profit's need for fundraising.Discussions between non-profit and business executives can identify realistic objectives to complete using the business's contribution., Typically the corporate sponsor provides a specific amount of money in exchange for the ability to advertise or sell its products at the non-profit's event.For example, suppose a non-profit organization that fights cancer is organizing a 5k run/walk in your city.
You own a grocery store, so you offer to sponsor the race.
In exchange, the organization allows you to identify yourself in your advertisements as the "exclusive grocery store" of the race., The non-profit must use the money received through corporate sponsorship in the same way it would use any other donation.
The non-profit organization doesn't have to pay any income taxes on corporate sponsorship income provided the corporate sponsor doesn't receive a substantial benefit in return for its money.
Essentially, this means the non-profit can't give the corporation anything that has any real value, aside from the free advertising the sponsor gets through its affiliation with the non-profit., If either party is allowing use of trademarked logos or other intellectual property in conjunction with the sponsorship, correct usage should be spelled out explicitly in the sponsorship contract.
For example, your non-profit organization may have the right to use a soft drink corporation's logo on signs and t-shirts promoting its events.
Likewise, the corporation is granted the right to state in its advertising that it is the official soft drink of your organization.Define specifically what products or goods may be licensed, and whether this license is exclusive., Sponsorship contracts should require the corporate sponsor to comply with all legal requirements and state that the corporate sponsor indemnifies the non-profit organization for any loss or claims arising from acts of the sponsor or its employees., Miscellaneous or "boiler plate" provisions are those which would apply to any contract, but aren't necessarily related to any particular part of this contract specifically. , Representatives of both entities must sign the agreement before it is legally binding. -
Step 3: Describe the rights
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Step 4: duties
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Step 5: and responsibilities of the corporate sponsor.
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Step 6: Describe the rights
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Step 7: duties
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Step 8: and responsibilities of the non-profit organization.
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Step 9: Provide for exclusivity or use of intellectual property.
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Step 10: Include warranty and indemnity provisions.
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Step 11: Include any necessary miscellaneous provisions.
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Step 12: Sign the agreement.
Detailed Guide
Include the full legal name of the business as well as the non-profit organization, along with a full description of the non-profit organization's tax-exempt status if applicable.
This section also should include basic contact information for each party to the agreement, such as addresses and phone numbers.
Ideally the sponsorship should have a concrete goal beyond the business's desire to improve its reputation and the non-profit's need for fundraising.Discussions between non-profit and business executives can identify realistic objectives to complete using the business's contribution., Typically the corporate sponsor provides a specific amount of money in exchange for the ability to advertise or sell its products at the non-profit's event.For example, suppose a non-profit organization that fights cancer is organizing a 5k run/walk in your city.
You own a grocery store, so you offer to sponsor the race.
In exchange, the organization allows you to identify yourself in your advertisements as the "exclusive grocery store" of the race., The non-profit must use the money received through corporate sponsorship in the same way it would use any other donation.
The non-profit organization doesn't have to pay any income taxes on corporate sponsorship income provided the corporate sponsor doesn't receive a substantial benefit in return for its money.
Essentially, this means the non-profit can't give the corporation anything that has any real value, aside from the free advertising the sponsor gets through its affiliation with the non-profit., If either party is allowing use of trademarked logos or other intellectual property in conjunction with the sponsorship, correct usage should be spelled out explicitly in the sponsorship contract.
For example, your non-profit organization may have the right to use a soft drink corporation's logo on signs and t-shirts promoting its events.
Likewise, the corporation is granted the right to state in its advertising that it is the official soft drink of your organization.Define specifically what products or goods may be licensed, and whether this license is exclusive., Sponsorship contracts should require the corporate sponsor to comply with all legal requirements and state that the corporate sponsor indemnifies the non-profit organization for any loss or claims arising from acts of the sponsor or its employees., Miscellaneous or "boiler plate" provisions are those which would apply to any contract, but aren't necessarily related to any particular part of this contract specifically. , Representatives of both entities must sign the agreement before it is legally binding.
About the Author
Pamela Harvey
Specializes in breaking down complex practical skills topics into simple steps.
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