Sponsorship: Company funds β marketing benefits (branding, visibility, leads). NO tax receipt.
Donation: Philanthropic motivation β tax receipt issued (Canadian registered charities).
Tax Implications
- Sponsorship: Sponsor gets no receipt (business expense)
- Donation: Sponsor gets tax receipt (charitable deduction)
- Hybrid: Sponsor does both ($5K sponsor + $5K donate)
Smart Nonprofit Strategy
Offer BOTH: corporate sponsorships ($5Kβ$50K for marketing ROI) + major gifts/donations ($1Kβ$100K+ for philanthropy). Many companies do both.