NCURA Policy on Advertising and Sponsorship
NCURA's core purpose is to serve its members by advancing the field and profession of research administration.
In carrying out this core purpose, the NCURA National Office and Regions may find it beneficial to secure advertising and sponsorship revenue. All should be aware, however, that the Internal Revenue Service has special rules for tax-exempt organizations, like NCURA, which distinguish between advertising and sponsorship income. While dollars received from sponsorships are tax exempt, dollars received from advertising are subject to Unrelated Business Income Tax (UBIT).
Opportunities for confusion and error abound, since the placement on an NCURA national or regional web page or publication of a logo, text, or other identifier may serve as either an advertisement or sponsorship depending on the context. The purpose of this policy is to 1) briefly explain the difference between advertising and sponsorship, 2) make clear NCURA's position regarding the same, and 3) provide Regions with guidance on what to do when collecting sponsorship and advertising revenue.
Advertising
The IRS considers advertising
to include, "Messages containing qualitative or
comparative language, price information, or other indications of
savings or value; Endorsements; and Inducements to purchase, sell,
or use the products or services."
In the case of an advertisement, the placement of a logo, text, or other identifier (including the incorporation of a link to a website external to NCURA) on an NCURA national or regional web page or publication is intended to promote for a commercial purpose a service, facility or product offered by the paying entity. The income received from advertising is subject to Unrelated Business Income Tax.
The focus of all NCURA advertising content shall be the identity of the advertising party rather than specific products and/or services of the advertising party. Such ads should in no way imply endorsement of products or services offered by the external entity. Any descriptive text accompanying the link should be value-neutral. Acceptable language might include: "For more information: [link]." An example of unacceptable language would be: "Check out this great web site [link]."
Sponsorship
To qualify as tax-exempt
revenue, sponsors must neither expect nor receive "any
substantial return benefit ... other than the use
or acknowledgment of [the sponsor's] name, logo,
or product lines in connection with the activities of the
tax-exempt organization. 'Use or
acknowledgment' does not include advertising the
sponsor's products or services."
In the case of a sponsorship, the placement of a logo, text, or other identifier (including the incorporation of a link to a website external to NCURA), on an NCURA national or regional web page or publication is intended to acknowledge a donation of services, products, or financial support to NCURA from an organization that is substantially related to furthering the exempt purpose of NCURA. The income received from such sponsorships is not subject to Unrelated Business Income Tax.
Note that income received from the sponsorship of an organization that is not substantially related to furthering the exempt purpose of NCURA will be subject to Unrelated Business Income Tax.
Oversight of Advertising and Sponsorship Policy
The presence of an advertisement or sponsorship on an NCURA
National or Regional web page or publication does not and should
not imply endorsement of the sponsor or advertised company or any
products of the sponsor or advertised company.
NCURA will refuse any advertisement or sponsorship that is believed to be incompatible with its core purpose or in poor taste. If there is any uncertainty or dispute as to the suitability of an advertiser or sponsor, NCURA's National Executive Committee will convene and make a decision.
Guidance Regarding Advertising and Sponsorships
Regions are encouraged to contact the NCURA National Office for guidance related to this policy, including assistance with interpretation of the Internal Revenue Service's treatment of advertising versus sponsorship income, Unrelated Business Income Tax, and financial reporting of the same. While the NCURA National Office will pay the Internal Revenue Service on behalf of the Regions for all Unrelated Business Income Tax obligations that may result from their activities, the Regions should be aware that the NCURA National Office must be compensated by the Regions for paying such obligations. The NCURA National Office will seek reimbursement from the Regions for any UBIT obligations incurred on their behalf.
