What counts as philanthropy
What the University considers to be a philanthropic gift from a company does not discount our interest in talking about any and all forms of potential engagement even if that falls outside of the definition of ‘true’ philanthropy.
All giving which does not confer full or partial ownership of a deliverable on the funder in return for the funding. The gift must be owned in full by the receiving institution once it is received.
Definition, philanthropic intent
In terms of corporate philanthropy, the rules state that gifts from companies in the UK and overseas are eligible if the giving has philanthropic intent AND does not fall under one of seven exclusion criteria.
The seven exclusion criteria are:
1. Contractual relationship
A contract exists between the two parties which commits the recipient institution to provide an economic benefit for compensation, where the agreement is binding and creates a quid pro quo relationship between the recipient institution and the donor. Contract income, including income for clinical trials, is ineligible.
2. Exclusive information
The donor is entitled to receive exclusive information, or other privileged access to data or results emerging from the programme of activity.
3. Exclusive publication
The donor is entitled to exclusive rights to publication of research or other results through their own branded communication channels (such as website and reports).
4. Consultancy included
Consultancy for the donor or a linked organisation is included as part of the agreement.
5. IP rights
The agreement assigns to the donor any full or partial rights to intellectual property which may result from the programme of activity. This exclusion extends to the provision of royalty-free licenses (whether exclusive or non-exclusive) to the funder, and also to granting the funder first option or similar exclusive rights to purchase the rights to any subsequent commercial opportunities. If the written agreement includes any actual or potential future benefit of this kind, it must be excluded.
6. Other forms of financial benefit
Any other direct financial benefits are required by the donor as a condition of the donation (such as discounted courses and training).
7. Donor control
The donor retains control over operational decisions relating to the use of funds once the gift has been made. This includes control over appointment and selection procedures to academic posts and student scholarships. Note that this clause has nothing to do with a donor’s right to know that a gift will be used for a designated purpose, where applicable, which is entirely consistent with a philanthropic gift.
What the University considers to be a philanthropic gift from a company does not discount our interest in talking about other forms of potential engagement, including sponsorship. Below are some guidelines for corporate sponsorship and its relationship to philanthropic giving.
On the specific issue of corporate sponsorship the rules state:
exclusion criteria 1 dictates that in the vast majority of cases corporate sponsorship must be excluded from the survey, as sponsorship is based on a quid pro quo relationship
as the definition of sponsorship can vary greatly between institutions, for the purposes of the Ross-CASE survey any corporate sponsorship which is subject to VAT as a chargeable supply according to HMRC definitions must be excluded from the survey
HMRC considers an agreement to take the form of sponsorship liable for VAT if, in return, you are obliged to provide the sponsor with a significant benefit
HMRC advise that 'significant benefit' might include any of the following:
naming an event after the sponsor
displaying the sponsor’s company logo or trading name
participating in the sponsors promotional or advertising activities
allowing the sponsor to use your name or logo
giving free or reduced price tickets
allowing access to special events such as premieres or gala evenings
providing entertainment or hospitality facilities
giving the sponsor exclusive or priority booking rights
HMRC advises that this list is not exhaustive and there are many other situations in which a sponsor may be receiving tangible benefits.
What matters is that the agreement or understanding with a sponsor requires the University to do something in return.
The only circumstances where HMRC consider corporate support not to be eligible for VAT is where acknowledgement is restricted to:
giving a flag or sticker
naming the donor in a list of supporters in a programme or on a notice
naming a building or university chair after the donor (without the use of a logo
putting the donor’s name on the back of a seat in a theatre
(source: HMRC Reference: Notice 701/41)