Whereas sponsorship is an agreement between two parties in which both seek material benefits, donors cannot seek any direct material benefit. Donations are often philanthropic in nature.
Philanthropy refers to benevolent acts that are of practical benefit to mankind.
The three principal sources of philanthropic support are:
- charitable trusts and foundations
- corporate foundations and employee giving programs
- private individuals.
Sport and recreation organisations can increase their probability of receiving donations, by developing a better understanding of the motivations of people's and organisation's motivations to contribute to sport and recreation organisations.
Charitable Trusts & Foundations
A philanthropic trust is a foundation or trust that supports a range of activities in the community that are deemed to be charitable under taxation law. The tendency over recent years is for benefactors to be more strategic in the way they allocate funds. Trusts are identified by five criteria:
- Non-profit making.
- Financially independent and self-governing.
- Controlled by its own trustees.
- Involved in activities for the welfare of the community.
Corporate foundations are interested in a slightly different set of characteristics than charitable trusts and foundations. The more important characteristics include:
- How well the sport and recreation organisation delivers its services.
- Extent of services in local communities.
- Whether the organisation helps those people who wouldn't otherwise get help.
- Degree of support from other sources.
- Use of volunteers to run programs.
- Extent to which the sport and recreation organisation serves corporate employees and their families.
The majority of philanthropic giving comes from individual donors. The reasons individuals make donations vary as much as the individuals who make donations. The challenge for the sport and recreation organisation is to attempt to make their project appeal to individuals.
Donor Recognition & Relations
Giving may be its own reward, but a donor recognition program that is thoughtfully conceived is crucial to many fundraising programs.
The best type of recognition is personal and at a level that is appropriate to the level of support without breaching taxation law. Some examples include:
- letter from the president of the organisation
- personal note from someone who benefits from the donor's philanthropy.
Australian Sports Foundation Ltd
The Australian Sports Foundation (ASF) was established to offer tax deductibility for donations in support of sport-oriented projects, programs and events. Non-profit and incorporated or government organisations are eligible to register fund-raising projects with the ASF.
The ASF can assist:-
- non-profit sporting bodies
- local councils
- community service organisations, e.g. Lions, Rotary
- trusts, foundations, church groups that are unable to secure tax deductibility in their own right for sporting projects.