Handling Sponsorships and Related Registrations

Sponsorship Packages

Prior to any event/activity communications, announcements, solicitations, or payments received, units determine the price and assign a fair market value to registration, tickets, and sponsorship packages.

Units provide sponsors with a sponsorship package form (example UM 1840 (DOCX) and UM 1841 (DOCX)) detailing the price of the sponsorship package, any return benefits offered, and how and where to remit payment based on the Job Aid for Sponsorship for University-Hosted Events/Activities. Units should also complete a return benefits valuation worksheet included as part of UM 1840 and UM 1841 for internal purposes, identifying the fair market value of each return benefit.

1. Sponsorship package forms should include at a minimum the following details:
   1. University program that benefits from the event
   2. Total payment and the tax-deductible gift portion, if any
   3. Detail of each benefit included in a package (including total fair market value of the benefit)
   4. Sponsor Information (name as they wish to appear in marketing materials, contact name and title, address, email and phone, website, etc.)
   5. Billing and payment options and information. Indicate payable to the “University of Minnesota Foundation” (for Gift Eligible Sponsorships) or to the “Regents of the University of Minnesota” (for Non-Gift Eligible Sponsorships)
   6. Signature Line for the sponsor
   7. Option to only make a donation to the cause (and not purchase a sponsorship package)
2. Each sponsor should submit the sponsorship package form with their payment.

Processing Sponsorship Revenue and Expenses

Gift Eligible – Deposit at University of Minnesota Foundation (UMF)

If the sponsorship is deemed to be Gift Eligible and is allowable for UMF to accept, per the Job Aid for Sponsorship for University-Hosted Events/Activities, direct the revenue to UMF in accordance with the current gift processing procedures.

Options for directing event/activity revenue to UMF:

1. Most units set up a UMF fund that is a specific fund for the event. All the revenue for the event is deposited into the specific UMF fund. The University incurs expenses to put on the event and withdraws funds from the specific UMF fund to cover those expenses. The balance in the specific UMF event fund is moved to another UMF fund that supports the cause or purpose of the event. The process allows for the costs of the event, such as catering costs, to be withdrawn and paid for prior to transferring the balance to a research fund.
2. Use University-approved event/activity systems (currently UMTE – U of M Tickets and Events) to route the gift portion to the UMF fund that supports the event/activity cause. Route the non-gift portion used to cover event/activity expenses to an EFS ChartField String from which event/activity expenses will be paid.

Withdrawing event/activity revenue from UMF:

1. When incurring expenses in the University-designated ChartField String related to the event/activity, reimbursement can be obtained by creating a bill in the EFS Billing module requesting disbursement from the UMF fund, consistent with donor intent, and as close to time that funds are needed as possible. Access the Controller's Office Training Documentation to access the Creating a Bill for U of M Foundation (UMF) Transfer for details.
2. Use revenue account code 540101 - Gifts and Bequests for donations of funds or non-capital property from businesses, foundations, or individuals, or for bequests from individuals.

Non-Gift Eligible – Deposit at University

If the sponsorship is not allowable for UMF to accept per the Job Aid for Sponsorship for University-Hosted Events/Activities, bill the sponsorship package in accordance with Administrative Policy: Managing Billings to and Receivables from External Customers.

1. Bill the sponsorship through EFS Billing module. The bill provides payment instructions for the sponsor when paying by check, electronic funds transfer, or credit card. Contact your Financial Cluster for billing instructions.
2. Use the following revenue account codes based on the transaction:
   1. 520102 - Ticket sales, admission and event registration fees for non-athletic events
   2. 520204 - Fees charged by academic units to participants for trips and tours associated with non-credit conferences or courses hosted by the University
   3. 520213 - Academic unit revenues from the rental of booth or exhibit space
   4. 520218 - Sponsorships for revenue received from sponsors to assist in covering the costs of events that are non-athletic related and not considered advertising
   5. 520222 - Revenues generated from advertisements
   6. 520603 - Fees charged by units to participants for non-credit conferences or courses hosted by the University
   7. 520604 - Non-academic unit revenues from the rental of booth or exhibit space
3. Do not use revenue code 540101 - Gifts and Bequests for donations of funds or non-capital property from businesses, foundations, or individuals, or bequests from individuals.
4. For athletic sponsorships use account 520704 - Athletic Marketing Sales. This accounts for revenue generated by intercollegiate athletics from advertisements, promotional events/activities, and sponsorships.
5. The unit may acknowledge the sponsor with a thank you; specific situations may require the unit to work with the Tax Management Office on an appropriate acknowledgment.

Processing Registration Revenue

All event/activity registration and ticket revenue will be processed through the University unless the registration or ticket contains a charitable gift component or is part of a Gift-Eligible Sponsorship package per the Job Aid for Sponsorship for University-Hosted Events/Activities.

Internal Sponsorships 

University departments can choose to participate in other University-department hosted events/activities by selecting a sponsorship package offered to external organizations. In the case of an internal sponsorship (between departments), sponsorship payment or reimbursement may be processed via a journal entry or journal voucher. The revenue should be classified under the appropriate 5001xx account value.

Reporting and Reconciliation

1. For those events/activities that have Gift Eligible (funds deposited at UMF) transactions, use the UMF Donor Management System (DMS) to access the Fund Statement report. For those events/activities that have Non-Gift Eligible transactions (funds deposited at the University) use the University Account Budget Status Report to track revenue and expenses for the event/activity. These two reports may need to be combined for a comprehensive event/activity review.
2. Review the UMF fund for the specific event/activity and reconcile expenses incurred at the University to ensure enough funds have been drawn from the UMF-specific fund to cover the University-incurred expenses for the event/activity. Current Unrestricted funds can only be used for events/activities if UMF funds are insufficient to cover University-incurred expenses for the event/activity and are allowable. Refer to Administrative Policies: Hospitality and Entertainment of Non-Employees and Business Expenses for further guidance.
3. Units must review and reconcile the financial transactions of the event/activity between the UMF fund and the University ChartField String in accordance with Administrative Policy: Reconciling and Verifying General Ledger Accounts and Other Financial Information at least twice a year by December 31 and June 30.

Determining How to Handle Events/Activities From a Sponsorship Perspective

1. To request assistance in determining how to handle an event/activity, send a copy of the planned sponsorship and/or event, date of event, contact person, and other pertinent information to [email protected].
2. The University’s sponsorship classifications group, comprised of representatives from the Tax Management Office, UMF, and the Controller’s Office, will review the materials and respond to those who are uncertain how to handle an event/activity. An answer related to proper handling or a request to obtain clarifying information will be provided to the requestor within three working days.
3. Additional resources related to Unrelated Business Income - Advertising and Unrelated Business Income - Corporate Sponsorships can be found on the Tax Management Office website.