Some chapters refer to those who place “ads” in their publications as sponsors, and other chapters call their sponsors advertisers. What is the difference between an advertiser and sponsor?
According to IRS Publication 598: Tax on Unrelated Business Income of Exempt Organizations, a qualified sponsorship payment is any payment made by a person engaged in a trade or business for which the person will receive no substantial benefit other than the use or acknowledgement of the business name, logo, or product lines in connection with the organization’s activities. For example, you can print a sponsor’s business card, but you can’t list prices or allow a sponsor to claim their product is better than another. At that point, your sponsor becomes an advertiser. Unlike a sponsor, an advertiser’s message includes: • qualitative or comparative language, price information, or other indications of savings or value; • endorsements; and • inducements to purchase, sell, or use the products and services.
