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The words donation and sponsorship are often used in the same context to describe funds that have been received as gifts. Donations and sponsorships are, however, two completely different concepts in the world of fundraising.
Donations are made by an individual/company/foundation/trust, etc for specific development projects at tertiary institutions or NGOs. When approaching companies for donations, these funds are usually obtained from the Corporate Social Investment (CSI) departments. Company shareholders decide on a certain percentage of company profit to be allocated to corporate social investment annually.
If there are no conditions to the donations, they are bona fida donations and donors are entitled to tax rebate certificates according to Section 18A of the Income Tax Act.
Sponsorships are obtained from companies' marketing departments and are regarded as marketing budget expenditure — therefore sponsorships are not bona fida gifts and are not eligible for tax rebate certificates.
Sponsors regard their contribution as a commercial transaction and expect return on investment by means of marketing opportunities, e.g. the company's logo on course material, folders, sport bags and clothes; banners at the venue of for example a conference, course, event, etc.
Key selling points for an event or project are: audience size and geographical scope; the prestige of the offering to the audience; opportunity for client entertainment; sole sponsorship; brand exposure opportunitues and value of the exposure.
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The information published on the DIA blog is intended for project leaders at the University of Pretoria.
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