Sponsor (commercial)

Under sponsorship refers to the promotion of individuals, a group of persons, organizations or events, supporting by an individual, an organization or a commercially oriented company, in the form of money, property and services with the expectation that one 's own communication and marketing objectives to receive in return. In this case " analysis, planning, implementation and control " play these and the contractual relationship between the sponsor and Sponsored, are defined in which performance and reward, an important role.

Sponsorship is used by organizations operated ( the sponsor ) for the purpose of the communication policy of marketing. The aim is to make your own company, mainly in connection with a media- event, attentive. Sponsorship is part of the public relations company that offers an " experience utility" should be added with the objective of promotion of products and services for which the product benefits.

• 6.1 Tax treatment of the sponsor 6.1.1 consideration as operating expenses
• 6.1.2 considering a donation
• 6.1.3 Non-deductible costs of private life or constructive dividends

Demarcation

Unlike the pure patronage, in which no economic benefits for expecting a number of explicitly defined benefits and rights of use is offered from the sponsored. In contrast to a real power exchange in which performance and reward equivalent to each other face, the sponsorship is based on a certain conveying intention. The modern sponsorship goes out into the advertising of the sponsor far beyond mere presentation of company logos and brands, or integration. The sponsorship has considerably professionalized in recent years, especially in the areas of sport, culture and social issues.

With the usually included in the sponsorship contracts notion of passive toleration of the Sponsor approves the communicative use of the project, the person, institution or group. The reciprocal relations are referred to as sponsorship; in German-speaking countries, the term sponsorship is most commonly used. The problem associated with the public interest Image (even sympathy ), which is met with the sponsored, should be ( Image Transfer) for the sponsor of benefits in marketing and communications. The sponsorship supports and complements other communication instruments of the company ( this integrated communication ) or can act as a basis for such.

Numerous consideration make the sponsorship of companies interesting integration into corporate communications, in lobbying processes in the advertising, marketing and PR. Furthermore, reduced or free admission may be included for customers or employees of the sponsor in the sponsor contract with the sponsored events. But most important of contact with potential business customers ( key individuals) as well as the target group is often rated. Nevertheless, it is the sale of services that constitute a win- win situation for both partners, not always about sponsorship.

Benefits

• Address and Contact maintaining the target group (s ) in non-commercial situations is possible.
• The image of the person or group can be used for corporate purposes or to the Sponsor's image (as shown on the product, the brand or the company ) is transferred and used for your own communications objective.
• Sponsorship provides in many cases a higher quality than the traditional contact ( advertising).
• It can be for audiences that can not be achieved with classical communication activities.
• Sponsorship offers the possibility to circumvent communication barriers (such as in Germany advertising ban after 20:00 clock in the public service broadcasters ).
• Mass media (television or newspapers ) can be used as a multiplier for sponsorship messages.
• Increase awareness of the company is possible.
• Motivation of employees can be improved.
• Event marketing and corporate image measures and PR policies are supported.

Disadvantages, problems and challenges of sponsorship

• It can be presumed influence on the operational activities of the company or institution.
• Sponsorship offers the possibility to circumvent advertising bans (such as advertising bans in schools).
• Lack of transparency in the use of customer, competitor and employee data can cause privacy problems.
• Incalculable risks ( doping cases in athletes ), poor services (with an impact on the respective performance benefits within the Sponsoring - Dependenzmarketing )
• Risk of adverse reactions associated with non-fans of sponsored teams;
• Risk of inappropriate or unwanted images is given, so is before an image - affinity test to be applied.

Manifestations

In practice, there are different forms of sponsorship ( by rank of importance ): sports sponsorship, arts and cultural sponsorship, sociolinguistics and social sponsoring, Ökosponsoring, science sponsorship. In the media sector program and media sponsorship and online sponsorship is used as a specific form of advertising.

Sports sponsorship

Of all the types of sponsorship for sports sponsorship occupies the most dominant position. The high sporting interest of consumers and the general acceptance form the basis of corporate communication goals ( positive image transfer ). Sports sponsorship can according to the criteria of sport (football, handball, basketball, motorsport, tennis), organizational unit (association, competition, club, team, individual athletes ) and power level ( professional, amateur, recreational sports ) are divided.

Since the sponsorship requires a certain TV media interest, benefit especially prominent sports media, so in Germany the football, Formula 1 and tennis sponsorship contracts. Other sports that are rarely or never seen on TV, but still have a large following, often experience instead sports sponsorship by the manufacturers of sport-specific products. In order to create the necessary public, individual athletes from sports such as motocross or supermoto now have the free opportunity to their sports sponsorship partners as well as to imagine themselves in individual dossiers.

In football has prevailed above all, the naming rights of stadiums, stadium parts ( such as bleachers ) or buildings for sale, so that the money can be used to co-finance - order or construction of stadiums. Pioneer in Germany was the Volksparkstadion in Hamburg, which was sponsored initially by an Internet service provider (AOL) and, since 2010, Imtech Arena is called. The East Stand of the Weser stadium is officially called force curve. But even in indoor sports naming rights are often sold with the expansion of the arena. The idea comes from the United States, where almost all the stadiums or arenas of the five major leagues (NBA, NFL, MLB, NHL, MLS) sponsors names have.

The team names, the name sponsorship takes place in Germany, especially the basketball league, here almost all teams have a sponsor names, Alba Berlin after the recycling company, EnBW Ludwigsburg to the energy companies and Telekom Baskets Bonn to the telecommunications companies, as well as teams in which the very traditional, especially in Germany locating missing and therefore the spectator is made ​​more aware of the sponsoring donors, such as Brose ( from Bamberg ) Fraport Skyliners or ( from Frankfurt). This is due to the fact that many clubs do not own the naming rights of the halls (and therefore can not sell ) and not take it so much through banner advertising and spectators. In ice hockey are the 2006/2007 season the Sinupret Ice Tigers and DEG Metro Stars of the DEL, the only teams with sponsors name without localization. The idea was taken from Spain and Italy, where sports such as handball, baseball, rugby union, basketball, despite higher interest for a long time living from this sponsorship.

That arise in competition name sponsors, is still rare in Germany. Already the summer of 2006 took place in Germany, the field hockey World Championship for Men 2006 instead, which officially BDO World Cup Men was said, and the 2nd hockey league was in season 2006/ 07 " Asstel Hockey League ." The FIH Champions Trophy of the sponsors has a name for several years. In football, have among the best leagues in the English ( Barclays Premiership ), Italian ( Serie A TIM), French ( Ligue 1 Orange ) and Portuguese ( bwin League ) a namesake. In Rugby Union leagues from England ( Guinness Premiership ) and the Celtic world ( Magners League) have also sponsors for some time.

Arts and Culture Sponsorship

In addition to the sports sponsoring the art or cultural sponsorship has become increasingly important. These include sponsoring activities and involvement in the visual arts, music, theater, literature, pop music, design, photography, film.

Socio - and environmental sponsorship

Sponsorship actions in the social and environmental areas include assistance towards charitable institutions, training centers and projects, often through the provision of financial or material resources or services. The Sponsor will be given with this specific form of sponsoring the possibility of an ecological, socio-political, and social responsibility (Corporate Social Responsibility) to exercise and to communicate them to the public.

Socio - or social sponsorship since 2000, developing as a major theme in corporate sponsorship and is taken seriously for several years by the social organizations and institutions. In the past, funds and grants from the companies were often adopted by social institutions and associations. But this basic understanding of a partnership commitment with appropriate consideration was often weak. So the sponsorship was for many years attributed to the fundraising in the social field and mostly processed by employees in fundraising. Basically, fundraising and sponsoring two different financing methods and should not be mixed.

Social sponsorship is considered as an approach to solve social, social and humanitarian problems. The Sponsored it may be individuals or independent institutions that focus on social and humanitarian problems of persons, groups of persons or companies and trying to solve. The range of social sponsorship goes from supporting local nurseries, schools and disabled associations to development projects in Africa. It relates to the support of charitable organizations and educational institutions, but also in general, the partnership with different social organizations and projects.

Environmental sponsorship, sometimes called Ökosponsoring, enables the company as well as the socio- sponsorship to practice corporate responsibility and its display. In these specific forms can be problematic credibility due to the complexity. The commitment of Krombacher to rescue parts of the rainforest was considered questionable and is probably more traditional advertising belonging. In this new area of sponsorship softer laws than in the sports and cultural sponsorship currently apply.

Wissenschaftssponsoring

With the research-sponsoring for several years receive an attractive form of financing in science and research collection. One of the pioneers, the Institute is part of the future of work. A private company handles all aspects of funding for the research without the results are as in the case of externally funded research, in their own interest. With respect to a professional sponsorship strategy of companies, it is usually only a nuance.

As in sport comes in the science area in front of the name - sponsorship, the company name is sponsored by a neutral, non-profit financial gift. An example of this is the private International University Bremen, which has been called since 2007, Jacobs University Bremen.

Health Sponsorship

In the health sector, especially campaigns for health education and prevention through donations and monetary grants are sponsored. From the Ministry of Health for 2009 and 2010 accrued sponsor funds in the amount of 61.2 million euros 61 million went to the Federal Office for gesundheiliche Enlightenment. Converted to EUR 26.8 million came from the trade association for the use of outdoor advertising poster open spaces for AIDS and alcohol prevention. For the prevention of gambling addiction by the State Toto -Lotto GmbH Baden -Württemberg were asked 1.4 million euros available; 223,000 euros donated to the Association of the German machine industry for the prevention of compulsive gambling.

Media and sponsorship program

Media and sponsorship program called the support of media (print, TV, radio, Internet). This special form of media advertising financed TV shows, TV shows or series. The "sponsor" is, for example, with its logo and a corresponding text hint ( "is presented by " ) integrated in the daily overview in the program part and on the respective highlight side of the program day in the immediate environment or on TV before, after and depending on the well during the commercial breaks mission appears. With the amendment of the Broadcasting Treaty with the distinction between advertising and sponsorship was largely abolished, so it is 20 clock and national holidays are no longer sponsoring since January 2013 in public television. In the field of the internet you often speaks of Websponsoring.

In addition here is to call the advertising form of product placement, are used in the branded products as a prop in a targeted actions. In exchange, monetary and non-monetary gifts be made.

Measurement of impact and success of the sponsorship

The assessment of sponsoring measures is limited in practice mostly to capture the media response. It is assumed that it is sufficient if the target audience perceives the sponsor as such ( Public Awareness ). But the reality is far more complex: Sponsors pursue various goals ( the image of the sponsor 's entitlement to the own brand transfer, gain reputation, the brand with the characteristic of the respective event emotions link ). These objectives must reach the success of control (that is, the set / actual comparison ) are considered.

A necessary condition is, therefore, a systematic planning target: companies should have specific goals in mind that they want to reach with sponsorship. Furthermore, the success of control assumes that the success can be quantified. To this end, several measurement instruments have already been developed ( sponsor meter of the European sponsorship market, sponsoring Navigator TU Dresden). According to these approaches sponsorship is regarded as successful if the target group has an effect according to the company's goals is measurable; if the company is valued as a known, likeable, unique. Here, the performance measurement should be a control group approach is based on: The measured among visitors to the sponsored event values ​​are compared with a reference group, which has not experienced the sponsorship. With the help of statistical methods can now determine which features (nature of the performance, integration of sponsorship, selection of the sponsor lender), decide whether sponsorship succeed. Using this approach, the Department of Marketing at the TU Dresden was able to identify the success factors of sponsorship as part of an investigation of numerous sponsorship activities.

Tax treatment of sponsorship

Apply to the income tax treatment of sponsorship - regardless of the sponsored area (sports, cultural, socio, eco and Wissenschaftssponsoring ) - the following principles:

Under sponsorship is usually the awarding of monetary or non-monetary benefits understood by enterprises to promote individuals, groups and / or organizations in sporting, cultural, religious, scientific, social, environmental or similar significant socio-political areas, with the regularly own business-related goals of the advertising or public relations are traced. Services of a sponsor are often based on a contractual agreement between the sponsor and the recipient of services ( sponsorship deal ), are governed by the nature and extent of the services of the sponsor and the recipient.

The Federal Ministry of Finance ( BMF) published in 1997 the principles for the " income tax treatment of sponsorship ". In February 1998 and in January 2001, this decree was supplemented.

Tax treatment of the sponsor

The expenses incurred in connection with the sponsorship can be

• Operating expenses individual section of § 4 para 4 Income Tax Act,
• Donations, b under the conditions of § § 10 Income Tax Act, 9 paragraph 1 No. 2 Corporation Tax Act, 9 No. 5 GewStG may be deducted, or
• Non-deductible cost of living ( § 12 No. 1 ITA ), for corporations constructive dividends ( § 8 paragraph 3 sentence 2 of the Corporation Tax Act )

Consideration as operating expenses

Expenses of the Sponsor are business expenses if the sponsor economic benefits that may lie predominantly in securing or increasing its business reputation ( cf. BFH of 3 February 1993, IR 37/91, BStBl 1993 II p 441, 445 ), for his company seeks or wants to promote his company's products. This is especially the case if the recipient of services on posters, event announcements, in exhibition catalogs, on the used vehicles he or other objects on the company or the products of the sponsor indicating effective advertising. The coverage in newspapers, radio or television can an economic advantage which the sponsor seeks for itself, justify, especially when it is integrated into its public relations, or by assisting the sponsor in press conferences or other public events of the recipient and their own statements about his company or his can deliver products.

Economic benefits for the company of the sponsor can also be achieved, that the sponsor makes publicity attention by use of the name, emblems or logos of the recipient or otherwise of his achievements.

For consideration as a business expense, it does not matter whether the services are necessary, usual or expedient; expenses may also be deducted as business expenses if the money or in kind of the sponsor and the aspired advertising goals for the company are not equivalent. In a stark disparity between the level of sponsorship and to the economic benefit of the business expense deduction ( § 4 section 5 sentence 1 No. 7 of the Income Tax Act ), however, is to fail.

Level of sponsorship as part of the sponsorship deal, the. The conditions of paragraphs 3, 4 and 5 meet for the deduction of operating expenses, no gifts are defined in § 4 paragraph 5, sentence 1, No. 1 Income Tax Act.

Into account as a donation

Grants the Sponsor, which are not operating expenses are to be treated as donations ( § 10 b Income Tax Act), if they are provided to promote tax-privileged purposes voluntarily or following a voluntary received legal obligation, no fee for a particular service of the recipient and are not in a actual economic context of its services are ( BFH on 25 November 1987, IR 126/85, BStBl 1988 II p 220; September 12, 1990, IR 65/86, BStBl 1991 II p 258).

Non-deductible costs of private life or constructive dividends

As sponsorship expenses designated expenses that are not business expenses and any donations, " non-deductible costs" of private life (§ 12 clause 1 sentence 2 ITA). With the appropriate contributions of a corporation constructive dividends may be, for example, if the shareholder is favored by the grants or own expenses as a patron spared (see Section 31 para 2 sentence 4 KStR 1995).

Tax treatment in tax-favored receivers

The services received in connection with the sponsorship, if the recipient is a tax- privileged corporation is ( = non-profit or public ), be tax -free income in the ideal range, tax-free income from asset management or taxable income from economic operations. The tax treatment of benefits at the receiver basically depends not on how the relevant expenses are payable at the company. For the definitions, general principles apply ( see in particular the application decree Tax Code to § 67 a, paragraph I / 9 ). After that there is no economic business operations when the tax-privileged to the sponsor only allowed the use of their name for publicity purposes in such a way that the Sponsor for advertising purposes or even for image building to its services indicates to the body. An economic operations is also not present if the recipient of the services on posters, event announcements, in exhibition catalogs or otherwise, on the support of a sponsor only indicative. This notice may be implemented using the name, emblem or logo of the sponsor, but done without special highlighting. An economic operation exists, however, if the corporation is involved in the promotional activities. The economic operation can not be a purpose operation ( § § 65 to 68 AO).

The sponsorship decree governs your questions in the income tax law (corporate tax, income tax and business tax). Issues of tax he omits altogether. This creates for many corporations received sponsorship partnerships, a high tax risk. According to § 64 para 6 AO the authority concerned may choose a lump-sum taxation method and thus reduce the tax burden ideally at about 6%. However, the sales tax issue is in this case also observed.