This procedure outlines the criteria for the solicitation, evaluation, approval and monitoring process for sponsorship opportunities.
This procedure applies to all sponsorship arrangements between The Corporation of the Town of Oakville (hereinafter referred to as the town) and third parties.
This policy does not apply to grants received from the federal or provincial governments.
Criteria for Corporate Sponsorship
- Sponsorship arrangements must align and not compromise, influence or alter the corporate goals and priorities of the town, or in any way diminish the town’s public image or commitment to inclusiveness.
- Proposed in-kind gifts or donations must be cost-effective for the town and managing sponsorship arrangements should not require significant administrative resources.
- Sponsorship must enhance the delivery or general public awareness of town services or activities and complement the public relations, promotion and branding strategies of the town.
- Sponsorship arrangements must comply with all federal and provincial statutes, municipal by-laws, and corporate policies and procedures.
- Advertising devices must not impact the quality and integrity of any town property and or asset and provide no added risks to safety.
Restrictions for Sponsorship
- The town will not solicit or accept sponsorships, naming rights or advertising sales from companies whose reputation could prove detrimental to the town’s public image.
- The town will not allow sponsorships or advertising, either directly or through third party arrangements that:
- Promote consumption of alcohol, marijuana and addictive substances, at events or venues geared primarily to children
- Promote the sale of tobacco
- Promote pornography
- Promote the support of or involvement in the production, distribution, and sale of weapons and other life-threatening products
- Present demeaning or derogatory portrayals of individuals or groups or contain any message that is likely to cause deep or widespread offence
- During the budget business planning cycle, departments will identify sponsorship opportunities to support town programs or community initiatives.
- Where appropriate, departments will provide a description of the sponsorship opportunity, the benefits for participation, and a description of the open and competitive procedure for expressing interest for all sponsorships valued over $25,000.
- Town employees may seek in-kind donations or financial contributions for town or employee related events such as, but not limited to, donations to the United Way campaign.
- Departments may, where appropriate, offer special opportunities to sponsors as part of a sponsorship arrangement.
- External organizations will be given equal opportunity to compete for sponsorship opportunities where appropriate.
- The town will seek appropriate recognition for its sponsorship of community events or organizations.
- All sponsorship opportunities will be evaluated by considering the following factors:
- Whether the department has sufficient resources (staff and financial) to maximize the benefit of the sponsorship opportunity, without compromising the effective delivery of municipal services and goals of the town;
- Whether the sponsorship opportunity enhances the town's image; and,
- Whether the sponsorship recognition is relative to the scale of a participant's contribution.
- Whether the sponsor is in good standing with the town.
- Staff will maintain records of all sponsorship commitments.
- All sponsorship arrangements must be confirmed in writing with a written Letter of Understanding outlining the benefits, roles and responsibilities, fees, duration and other agreed terms of the sponsorship arrangement. Departments must maintain records of these agreements, including receipts.
- For events or other time limited sponsorship opportunities, all sponsorship funds must be paid to the town prior to the event.
Corporate Sponsorship Approval
- Department directors, or designates, have the authority to enter into sponsorship arrangements within their own departments up to an annual value of $25,000.
- Commissioners, or designates, have the authority to approve all proposals to seek sponsorship of town programs, services, events or assets up to an annual value of $50,000.
- The CAO, or his/her designate, must approve sponsorship agreements over the value of $50,000. Council endorsement may be required in specific instances as determined by the CAO.
- Sponsorship arrangements that are potentially controversial will be reviewed and approved by the Executive Management Team prior to entering into an arrangement.
- As part of the annual budget approval process and in accordance with existing policy, Council will approve departmental budget available for donations of staff time, financial contributions, promotional gifts, or fee waivers to the community.
Use of Sponsorships
- All sponsorship revenues will be allocated to the relevant program or departmental budget.
- Sponsorship fees will be used to manage the costs associated with the delivery of town services and applied to:
- Reduce or eliminate the net costs of delivering a service or acquiring goods/services;
- Enhance or expand a town service or the ability to acquire goods or services;
- Provide a new service, program, event or activity (subject to Non-Tax Supported Program Sustainability procedure);
- Enhance community image;
- Improve public awareness of town programs and services in the community.
- The town is an integral part of the community's fabric and will contribute to external community events, programs, projects or acquisition of community assets subject to budget availability and appropriate policies.
Official Income Tax Receipt
An official income tax receipt will be issued for monetary or in-kind sponsorships or donations, upon request. A charitable registration number is not required for the municipality to receipt its donors, as municipalities have the status of a qualified donee, according to the Income Tax Act.
Criteria for issuing an official income tax receipt:
- Sponsorships or donations must be in compliance with this procedure and pre-approved by the Financial Operations department if receipts are to be issued
- Official income tax receipts will not be issued prior to receipt of donation
- Property, usually in the form of cash, is transferred by the donor
- Transfer of property is voluntary - without legal obligation
- Transfer is made without "expectation of return" - no valuable consideration or benefit of any kind to the donor as a result of payment
- The town only issues official income tax receipts for donations greater than $25
- The town shall only issue official income tax receipts for funds that it will directly be responsible for spending
- Donations other than monetary such as transfer of tangible property, must be assessed for the fair market value of the property at the time the gift was made; donations in the form of in-kind contributions of services are not eligible for an official income tax receipt
- If there is an "expectation of return" i.e. dinner, drinks, advertising, etc. by the donor, then the fair market value of the “return” received by the donor would be reduced from the value of the donation in accordance with Canada Revenue Agency’s split receipting guidelines.
Issuing an official income tax receipt:
- Departmental staff in receipt of a donation or sponsorship must complete a Request for Official Tax Receipt Letter, appendix A
- For monetary donations or sponsorships, the completed form is sent to the Financial Operations department
- In-kind donations of property greater than $1,000 will require a qualified appraiser to provide the value and a completed form to the Financial Operations department. For some items such as used cars donated to the Fire department, a pre-determined amount has been established and is used for every donation.
- The Financial Operations department will review the form for completeness and prepare an Official Income Tax Receipt, appendix B. Receipts will be issued by February 28 to be eligible for the previous year's tax return.
- All receipts are numbered and signed by the Financial Operations department and will be mailed directly to the donors.
Monitoring and Evaluation
- Departments are responsible for monitoring the achievements of sponsorship agreements, objectives, and performance standards.
- Departments will file a copy of all sponsorship agreements over a value of $10,000 with the Financial Operations department. The Financial Planning department will report the total value of these sponsorship agreements to Council during the annual business planning and budgeting cycle.
- All sponsorship agreements should be evaluated by departments on an annual basis to determine continued benefit.
- The town and its departments reserve the right to terminate an existing sponsorship agreement should conditions arise that make it no longer in the best interests of the town.
- Departments are responsible for soliciting, negotiating and administering their own agreements subject to the policy and procedures approved by Council.
- The Legal department may assist departments in the establishment of sponsorship agreements exceeding a value of $25,000.
- The Strategy, Policy and Communications department may assist departments in the evaluation of all sponsorship proposals to determine the consistent use and placement of corporate logos.
- The Financial Operations department is responsible for issuing income tax receipts subject to the criteria in the procedure and the Income Tax Act.
Sponsorship: is a mutually beneficial arrangement between the town and an external party (individual, company, vendor or organization) wherein a party contributes funds, goods or services to an event, project, program, service or corporate asset in return for recognition, or other promotional consideration.
Forms of Sponsorship:
Cash – a sponsorship received in the form of money.
In-kind – a sponsorship received in the form of goods or services of value to the town.
Donation: a gift or contribution of cash, goods, or services given voluntarily toward an event, project, program, service or corporate asset and is eligible for a Charitable Tax Credit under the Income Tax Act.