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NIE Guide—U.S. Newspapers (Effective April 1, 2009 through September 30, 2010)

Sponsorship Funding

Definition

Sponsorship funding refers to all money received by a newspaper from outside donors intended for use as payment for copies claimed on ABC documents as education program copies. This includes NIE classroom copies, NIE home-delivered subscriptions, and registered college student copy programs.

Eligibility of Funds

Funds obtained from sponsors, including money generated from compliant fundraising events, are acceptable as payment for education program copies under the following conditions:

  1. An internal structure is in place at the newspaper to account and track all financial transactions relative to the donations and application to the school accounts.

  2. The funds are donated.
  3. The donor specifically intended the donated money, goods or services to be used to purchase educational program copies. The funds were not given to the newspaper as payment for the purchase of any other item—tickets, advertising, t-shirts, etc.

  4. When the donation is a good or service, rather than money, the newspaper may resell or auction those items to the public in order to convert the value of the donated items to usable cash to pay for educational program copies. Only the actual cash received is eligible for use as sponsorship funding.

Ineligible Funds

Some sources are not eligible to contribute money, goods or services for payment of circulation claimed on ABC documents as educational program copies. These sources include, but are not limited to, the following:

  1. Employee or agents of the newspaper
  2. A newspaper’s independent contractors
  3. A newspaper’s subsidiaries, affiliates or parent company
  4. Other publications (newspapers, magazines, etc.)
  5. Money generated from ongoing business operations (i.e., a company store or recycling center)
  6. When the donor was not informed the money was intended for the purchase of educational program (a.k.a. NIE) copies
  7. When the donor received goods or services in return for their contribution, including discounts or coupons
  8. Money pledged, but not received by the time the audit occurs

Corporate Donations

Corporate donations are funds from any type of business or organization such as retailers, corporations or advertisers. A corporate donation may be in the form of cash, goods or services. The donation is eligible as payment for education program copies provided the cash, goods or services are given voluntarily and without the organization receiving anything in return (except an ABC compliant thank you ad).

There are four common types of corporate donations.

  1. A simple, straightforward donation of cash (check, pledge, credit card).

  2. The donation is commingled with other transactions with the newspaper.
    • All documentation must clearly indicate the amount specifically intended as the educational program donation and state the donation is to serve as payment for educational program copies (versus teacher materials, workshops or other educational program expenses).
    • The donation is not influenced by other goods and services exchanged in the transaction. For example, if a retailer wishes to donate money as payment for educational program copies, then the wholesale rates or advertising charges for that retailer should not be discounted by the newspaper as a direct result of the retailer’s decision to donate.
    • The amount of money indicated as a donation for payment of educational program copies, and not influenced by other transactions, may be used as payment for educational program copies.
    • Examples: Donation with an advertising contract, Retailer “2 cent” program


  3. A donation is commingled with the sponsorship of a serial, tab or supplement.
    • A written agreement (or invoice) must exist itemizing the following:
      • Amount given to the newspaper to purchase the “sponsorship” of the tab.
      • Amount given to purchase any advertising in the serial, tab or supplement.
      • Amount intended as a donation for payment of newspaper copies claimed on ABC documents.
    • Only the amount specifically directed as a donation for payment of copies of the newspaper may be used as payment for educational program copies claimed on ABC documents.
    • Example: Donation with Sponsorship of a Serial


  4. Goods or services are provided as the donation, in lieu of cash.
    • The newspaper may sell these items to the general public to convert them to cash (i.e., auction).
    • The actual cash proceeds from the sale may be used as payment for educational program copies.
    • Money generated from corporate donated items purchased by employees, subsidiary employees, agents, and other independent contractors associated with the newspaper are not eligible as payment for educational program copies. See the section on ineligible donations.
    • Example: Block Party auction

Note:
If the donation is based on the actions of an individual and is promoted to the individual or commingled into an event, then the donation is an individual donation and subject to the guidelines governing individual donations.

  • For example, if a restaurant promotes to the public that “20% of your dinner check on Wednesday, May 6 will be donated to NIE,” then the donations are coming from the individual (not the restaurant). On the other hand, if the restaurant made the internal decision to donate 20 percent of its dinner revenues on Wednesday, May 6, and did not promote this to the public, then the donation would remain a corporate donation.
  • Another example is when a country club donates rounds of golf and cart fees, but an individual must pay to enter a golf tournament event. If a country club donates passes for a round of golf with a cart and these passes were resold at an auction-type event by the newspaper, not commingled with a tournament event, then the donation would remain a corporate donation.

Individual Donations and Fundraising Programs

Individual donations are funds donated to the educational program fund by individual consumers. An individual donation may be in the form of cash, goods or services. The individual donation is eligible as payment for education program copies provided the cash, goods or services are given voluntarily and without the individual receiving anything in return (except an ABC compliant thank you ad).

There are six common types of individual donations.

  1. A simple, straightforward donation of cash (check, pledge, credit card).

  2. Donations as a result of a current relationship with the newspaper.

  3. An individual donates goods or services, in lieu of cash.
    • The newspaper may sell these items to the general public to convert them to cash (i.e., auction or direct sale). See item #4 below.


  4. An individual buys a good or service donated to the newspaper (by businesses or individuals). If so, the following guidelines apply:
    • The entire amount paid by the individual is eligible as payment for educational program copies.
    • Money generated from donated items purchased by employees, subsidiary employees, agents, and other independent contractors associated with the newspaper are not eligible as payment for educational program copies. See the section on ineligible donations.
    • Examples: Block Party Auction, Lawn Sale


  5. An individual buys an item purchased or manufactured by the newspaper. If so, the following guidelines apply:
    • All promotional material must clearly indicate the amount specifically intended as the educational program donation (for each item).
    • It must be clear the donation is not required in order to purchase the item.
    • The cost to purchase the item without the donation must be clearly indicated.
    • Example: Sale of Calendars


  6. An individual pays a fee for entry or participation in a contest or event. If so, the following guidelines apply:
    • All promotional material must clearly indicate the amount specifically intended as the educational program donation (for each action such as entry, voting, buying a raffle ticket).
    • It must be clear the donation is not required in order to participate.
    • The cost to participate without the donation must be clearly indicated.
    • Example: Pet Idol Contest, Dinner Event Fundraiser, Golf Outing Fundraiser

Note:
Please ensure that you comply with all federal, state, and local regulations when engaging in any donation or fundraising initiative.

Thank You Ads

When an individual or business makes a donation to a newspaper’s educational program fund, the newspaper may wish to express their gratitude. ABC rules and guidelines permit a newspaper to recognize donors in the newspaper, on signs, on their website and other mediums, provided the effort is a simple recognition thanking them for a donation for educational program copies.

If the donation is intended to serve as payment for educational program copies claimed on ABC documents as paid circulation, then the thank you ad received should not be gratitude for sponsoring a serial, supplement, tab, teacher workshop or other program. Rather the thank you ad should recognize a donation toward the purchase of copies of the newspapers for schools, students or classrooms.

A simple recognition thanking the donor may include, and is limited to, the following:

  • Business or individual name (or group of names such as “Loyal Subscribers”)
  • Business Logo – this may not include any promotional slogans or tag lines
  • Street or mailing address
  • E-mail address (and link if recognition is online)
  • Website address (and link if recognition is online)
  • Phone number
  • Fax number

Any recognition provided by the newspaper that exceeds the parameters listed above is considered advertising.

Advertising for the donor would require an additional charge in excess of any money specified as a donation to the educational program fund. The donor should be charged the current marketplace value for that advertising in order for the full donation amount to be eligible as payment for educational program copies.

Examples

It is the newspaper’s responsibility to develop and design their thank you ads. However, a few examples have been provided as guidance.



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