Whats the difference between Sports Grants and Sports Sponsorship?
Grants are awarded – Sponsorship is a commercial exchange
Grants are awarded
Sports grants and community grants are funding that is awarded to an organisation, based on meeting a selection criteria. The grant issuer may stipulate how the funding should be used, but must not require an exchange of goods or services, like advertising or naming rights.
Grants are not loans, sponsorships or commercial exchanges.
The grant providers should not ask for endorsement. Grants should be free from a commercial arrangement.
The grant issuer will often receive much goodwill for supporting a community or sporting group, which they can use in their own marketing.
The sports club or community group will most likely give thanks publicly to the grant issuer. However, this should not a requirement of receiving funding and if the club is obligated to endorse the issuer, it falls under the category of a sponsorship, not a grant.
Sponsorship is an agreement
Sponsorships are great. After all, they are the go-to business model most professional sports clubs and athletes utilise, and have made sport sustainable.
The sponsor gives money (funds) or something of value, like sports equipment or supplies, receives something of value in return. Their name on your team jersey’s for example
Your sports club, in exchange for funding, may provide things like:
- naming rights
- some other type of benefit of value.
Don’t get caught out
If your organisation or sporting group makes a supply in return for the funding it is not a grant, and tax obligations may apply.
Did you know, that if your club does take a grant, that is actually a sponsorship (or commercial agreement), it changes your tax obligations? For more information on the subtle differences between grants and sponsorship see the Australian Taxation Office Website