Where does sponsorship money go? To answer this question, the Association for the Development of Industrial and Commercial Sponsorship questioned the sponsorship budgets of large companies, SMEs, and very small businesses, as well as their distribution. And to clear up any ambiguity about the practice of sponsorship, ADMICAL asked companies about their use of tax benefits, sponsorship reciprocities, and the motivations behind their sponsorship efforts.
The survey confirms that sponsorship is now a standalone strategy: companies do not leave the choice of their beneficiaries to chance. Indeed, two-thirds of responding companies support projects they have selected on their own initiative (by reaching out to the project sponsor themselves), via employees, or through calls for projects. Companies prefer to support projects for about a year and give the majority of new projects a chance each year. Good news for associations still hesitant to solicit companies: the beneficiary projects are constantly evolving!
–Strategy, innovation, and proximity
The typical beneficiary is a medium-sized French association conducting local action.
Associations are indeed the preferred structure for corporate sponsorship (chosen by 83%), followed by NGOs (36%), public institutions (30%), and foundations (30%).
79% of sponsoring companies primarily support structures acting locally. This trend is even stronger among SMEs / very small businesses, which prefer local structures at 82%.
A variety of budgets and projects
Large companies support an average of 11 to 50 projects per year, with an average support budget per project mostly exceeding €10,000. For SMEs / very small businesses, the average is 1 or 2 projects per year, with an average budget per project between €1,000 and €5,000.
Are SMEs / very small businesses more generous than large companies?
In 2011, the median sponsorship budget for large companies was €1 million. One in five large companies even had a sponsorship budget exceeding €5 million. For SMEs / very small businesses, it was mostly between €1,000 and €5,000… And yet, when considering the donations of companies in relation to their turnover, SMEs / very small businesses are more generous!
Indeed, while 73% of large companies dedicate less than 0.1% of their turnover to sponsorship, 58% of SMEs / very small businesses dedicate more than 0.1% of their turnover, with 23% of them dedicating over 0.5%!
Considering the law of August 1, 2003, which allows companies to tax-deduct 60% of their donation amounts while respecting a cap of 5 per thousand of their turnover (Article 238 bis of the CGI), these results advocate for a fiscal gesture towards SMEs / very small businesses, for whom the current system is not very incentivizing.
Admical has already proposed establishing an exemption of €10,000 for all amounts committed under sponsorship, beyond which the current cap of 5 per thousand would apply.
Why engage in sponsorship? For the public interest, not for the benefits
“Contributing to the public interest, being supportive” is the primary motivation for sponsoring companies. Companies also want to “unify/foster employee loyalty,” “give meaning to the profession,” and “build relationships with local stakeholders” through their sponsorship policy. The benefits that companies might gain are not decisive: three-quarters of companies do not consider them in choosing a project.
In fact, 73% of large companies reported only partially or not at all using the benefits.
Tax deductions: a real lever to give more
Nearly two-thirds of companies use the tax deductions associated with corporate sponsorship, and almost all are aware of this mechanism. While tax deductions do not appear in the motivations of companies (for whom, it is important to recall, sponsorship remains an expense), they play a real role for beneficiaries: they allow the company to give more.
