Sponsorship

Policy

This policy sets out expectations for schools to assess sponsorship opportunities and the associated reporting and authorising requirements and make decisions consistent with whole of Victorian government sponsorship policies.

Summary

• Schools must only engage in sponsorship activities if the potential activity meets one or more of the whole of Victorian government principles for sponsorship set out below. Schools can receive sponsorship (incoming) or provide sponsorship (outgoing).
• Schools must follow the process set out in the Sponsorship Procedure (on the Guidance tab) when considering a sponsorship opportunity, including use of the Sponsorship checklist (DOCX).
• The school staff or school council members assessing a sponsorship request must act in a way that is ethical, ensuring the opportunity is competitive for all who want to participate and must not enter into a sponsorship deal with an organisation or individual that would harm the school or department’s reputation.
• Schools need to maintain their own sponsorship registers for incoming and outgoing sponsorship and to keep their own records of any agreements or contracts.
• When a school receives sponsorship:
  • for $25,000 or less they need to seek approval from their school council and finalise the agreement with the Agreement Letter template provided on the Resources tab
  • above $25,000 they need to seek approval from the Regional Director and Executive Director, Communications
• Schools being approached with requests to advertise state-wide or country-wide promotions (for example, from supermarkets) to their school community need to refer the request to the Communications Division.

Details

Sponsorship can provide a mutually beneficial and purposeful relationship between organisations or businesses and Victorian government schools, the department and agencies, contributing to strong school and corporate communities.

Well-managed sponsorship arrangements can provide an effective way of increasing awareness of messages, policies and initiatives, communicating department goals and building stakeholder relationships, helping you communicate with specific audiences within the community.

This policy aligns with the whole of Victorian Government Sponsorship Policy.

All Victorian government schools are required to follow this policy and must not have their own local sponsorship policy.

In this policy, schools refers to all school-based staff and school councils. This includes the principal in their capacity as executive officer of a school council when they are implementing sponsorship decisions for a school council and it also applies to school council members.

Sponsorship is considered a function undertaken by a school council under Part 2.3 of the Education and Training Reform Act 2006 (Vic).

Compliance with this policy is mandatory under the Finance Manual for Victorian Government Schools (refer to Section 9.8 Locally raised funds – Sponsorship).

Difference between sponsorship and advertising

Sponsorship and advertising are different.

Sponsorship

Sponsorship is typically where an organisation (the sponsor) supports another organisation’s activities (such as an event or upgraded facilities) through the provision of money, goods or services in exchange for the promotion of the sponsor’s goods, services or activities (such as through logo placement, naming rights or public acknowledgement of the support received from the sponsor). For example, a local bakery supports a school’s fete by providing free or reduced price baked goods for the school to sell at a food stall, in exchange for their logo being placed on the school’s advertising for the fete, alongside a sentence thanking the bakery for their contribution.

There are 2 types of sponsorship:

• incoming sponsorship is where an external organisation provides financial or in-kind support for a school initiative, event or program
• outgoing sponsorship is where a school provides financial or in-kind support to an external organisation for their initiative, event or program.

Sponsorship does not include:

• donations (refer to Finance Manual — Section 9.7 Locally raised funds — Donations)
• philanthropic efforts (refer to Philanthropic Partnerships)
• the sale of advertising space, editorial comment, or advertorials (refer to Advertising)
• grants or discretionary funding provided to external individuals or organisations for a specific purpose
• bequests which impose no obligations on the recipient and offer little or no rights or benefits to the provider
• joint ventures or consultancies.

Advertising

Advertising is typically an arrangement where an organisation or individual (the advertiser) purchases public space from another organisation (the publisher) for an agreed price to advertise their product or service and there are no additional benefits to the publisher. For example, a company pays a school to buy space in a newsletter or magazine or a billboard to advertise their services to the school community, or the school pays a company to advertise the school to prospective students and families. The only benefit to the publisher is usually the payment received from the advertiser for advertising the product or service (noting that payment can be waived or in kind).

Advertising may be in the form of print, radio, television, outdoor, online and other digital platforms.

For more information refer to the Advertising Policy.

For the full set of definitions for this policy, refer to the Definitions section below.

Principles of sponsorship

Schools must only engage in sponsorship activity that meets one or more of the following principles for sponsorship:

• Promotes and improves educational outcomes
• Supports school goals and objectives
• Increases effectiveness of departmental strategic programs
• Engages or builds relationships with key stakeholders
• Communicates key messages to specific audiences within the community

Determining if sponsorship is appropriate

Schools do not have to consider all requests to engage in sponsorship arrangements.

If you decide to consider a sponsorship request, the information in this policy and guidance will help you assess whether the request is appropriate.

1. Ensuring probity

Appropriate activity

Schools must not engage in sponsorship that is inappropriate, either through association or activity. The following activities or organisations must not be considered for sponsorship:

• activities aimed at delivering or replacing core services to schools delivered by third parties such as, for example, cleaning or IT
• activities or sponsorship partners whose values, products, purposes or objectives are inconsistent with the department’s policies, values, priorities or objectives
• political parties, tobacco companies, gaming venues, companies involved in the sale or promotion of alcohol, or involved in the sale or promotion of firearms
• companies that encourage unhealthy food choices by young people
• religious organisations or religious activities
• unregistered charities and not-for-profit organisations, including those not registered with the Australian Charities and Not-for-profits Commission (ACNC)
• School Banking Programs provided by Authorised Deposit-taking Institutions. Refer to the Financial Literacy Policy for further information.
• organisations or companies that are financially unsound or unstable
• agencies with inspectorial or regulatory powers over the department
• any activity or organisation seeking for the department to directly endorse or promote its products or services
• any activity in breach of the Code of Conduct for Victorian Public Sector Employees.

Commercial organisations can be considered for incoming sponsorships if the organisation is not associated with an inappropriate activity listed above.

For outgoing sponsorships, schools should not sponsor any commercial organisations (excluding media organisations).

Open and effective competition

If you receive a request for either incoming or outgoing sponsorships, it is strongly recommended that your consideration includes evaluating whether there are other organisations in the sector or your local community who should also be given the opportunity to ensure open and effective competition.

Ethical behaviour and fair dealing

School participation in sponsorship (including those with advertising) should not place undue pressure on employees, parents, students or school communities to purchase particular goods or services, subscribe to particular beliefs or attitudes, or undertake certain activities or actions.

All school staff and school council members involved in making decisions about or managing sponsorships must behave ethically and fairly and:

• declare and avoid conflicts of interest (refer to Conflict of Interest)
• refuse gifts, invitations to events and functions, or other favours if offered as part of sponsorship negotiations and register all refused offers valued at $50 or more in the department’s Gifts, Benefits and Hospitality Register (refer to Gifts, Benefits and Hospitality)
• maintain confidentiality with respect to commercial-in-confidence, intellectual property issues, matters under negotiation and any other confidential information
• maintain high standards of transparency and accountability
• must not provide names or addresses of departmental, school or agency employees or school council members or students and their families to an organisation or business as a benefit of sponsorship
• comply with the Code of Conduct for Victorian Public Sector Employees.

2. Achieving efficiency and effectiveness

Value for money

Value for money is not necessarily about the highest or lowest dollar amount, but rather the best possible outcome that can be achieved using the available resources. For example, a sponsorship proposal may demonstrate good value for money because it helps you reach a key audience or because it offers an extremely low-risk activity or association.

Another issue to consider is duplication across the department (including schools) and government. It may not be efficient if two or more schools or divisions within the department are providing sponsorship to the same organisation. It is best practice to ask sponsors who their current sponsors are (or who else they are sponsoring).

3. Maintaining accountability

The Schools Sponsorship Procedure document outlines the steps that schools must take when considering entering into a sponsorship agreement.

4. Implementing effective risk management

Weighing up the benefits and risks of sponsorship should be considered when deciding if your school will proceed with a sponsorship.

Risks

The risks of sponsorship can include:

• perceptions of improper conduct
• perceptions of a conflict of interest and any risks that may pose
• promotion through schools can lead to the perception that a school supports or endorses a particular business
• perceptions of bias, favouritism or that an impartial decision has not been made
• the potential to embarrass the school or department through associating them or their activity with an inappropriate sponsor or one of poor repute. This may be reconsidered if sponsorship is intentionally sought from or by a company seeking to rebuild its reputation. To prevent this risk, schools must contact the department’s Communications Division at sponsorship@educaton.vic.gov.au for advice when considering sponsorship agreements which may have potential for reputational damage
• in the case of incoming sponsorship, undertaking an activity on the basis of the promise of corporate sponsorship which then does not materialise
• in the case of incoming sponsorship, schools need to ascertain the true commercial value of the sponsorship for accurate reporting purposes — this can be calculated by estimating the market rate value for the benefit being provided
• schools can contact the department’s Communications Division if unsure about the effectiveness of the sponsorship
• financial risks of involvement with a sponsorship partner which may include risk of financial insolvency or lack of adequate insurance
• if this policy and procedures are followed, schools will not be in breach of the government accounting requirements
• perceptions that a future favour is expected
• perception that probity has not been maintained
• privacy and information security risks if the sponsor has access to school databases or personal information.

Managing risk

• The Assessing sponsorship checklist provides a useful set of criteria to assist you to assess any risks associated with a potential sponsorship opportunity.
• Financial risk – schools need to ensure that potential sponsors pose no financial risk to the department, school or agency as a result of the sponsorship arrangement. For lower-value sponsorships, this can simply be a declaration from the potential sponsor that confirms they have sufficient financial resources to deliver the goods or services described in the sponsorship agreement and that they are not subject to any current or impending legal action that could impact on their capacity to deliver their agreed sponsorship.

Benefits

The key benefits of incoming sponsorship (provided to the school) are to:

• reduce the costs to the school of performing a particular activity or allow for enhanced program delivery or expansion
• provide funding for publications, conferences or other special activities that promote a particular program or initiative
• provide the school with an opportunity to develop better working relationships with the wider community
• promote the public profile, increasing community awareness of a program, initiative or activity to a wider-than-normal audience.

The key benefits of outgoing sponsorship (provided by the school) are to:

• increase the school’s exposure to its community
• enhance the school’s image
• increase awareness of the school.

Appropriate acknowledgment

If a business seeking sponsorship is offering a package of benefits that includes public acknowledgment of the sponsorship, there may be an opportunity for the school to negotiate what is on offer.

Acknowledgment of the sponsor must be in a form that positively enhances education outcomes and the public image of the department and school must be considered at all times.

Acknowledgement should not be seen to endorse the sponsor, their services or products. Endorsement of the sponsor, their services or products could risk perceptions of favouritism, future favours and conflicts of interest. Examples of appropriate acknowledgement are provided below.

Incoming sponsorships

Acknowledgement can include:

• placement of a plaque or notice in a format that has the prior approval of the sponsor for the duration of a sponsored activity or for an agreed period of time
• public display at functions of temporary signage acknowledging the sponsorship
• acknowledgement of the sponsorship in newsletters (for example, advertisement) or speeches
• a letter of appreciation to the sponsor
• inclusion of a by-line, forward or advertisement from the sponsor in a school’s prospectus, magazine or other publication
• attendance by the sponsor at school functions and an opportunity to make an address or present an award.

Note: any advertisement, paid or unpaid, must comply with the department’s Advertising Policy.

Outgoing sponsorships

A typical package of benefits for outgoing sponsorship can include:

• public acknowledgements
• logo placement and signage
• speaking engagements
• social media posts
• advertising.

Other benefits can include:

• naming rights
• placement and promotion of web links
• media and publicity
• opportunities to network
• placement of articles in targeted publications
• competitions.

Naming rights

Naming rights are when a sponsor has negotiated to have their name added as a prefix to the sponsored activity.

Careful consideration must be given to the potential financial, legal, marketing and branding implications of agreeing to grant naming rights.

The approval of the relevant Minister must be obtained for any sponsorship agreement that gives naming rights for a governmental asset (such as a school building), event or initiative to an external organisation.

Sponsorship arrangements relating to naming rights must have explicit end dates.

Contact the Communications Division for advice if your sponsorship proposal includes naming rights.

State-wide sponsorship of schools

There are a number of state-wide or country-wide corporate sponsorships that affect local schools. For example, regular promotions run by major supermarket chains and banks.

Schools being approached with requests to advertise these promotions to their school community must to refer the request to the Communications Division.

In some instances, the department may enter into an agreement with an entity to apply to all schools.

Approvals and reporting

Below is a summary of the approvals required at various sponsorship levels.

Incoming sponsorship

• If the value of incoming sponsorship is equal to or less than $25,000, it needs to be approved by the school council and be recorded on the school register.
• If the value of incoming sponsorship exceeds $25,000, it needs to be approved by the regional director and the Executive Director, Communications Division and be recorded on the school register and central department register by the Communications Division.

Outgoing sponsorship

• If the value of outgoing sponsorship is equal to or less than $25,000, it needs to align with school financial delegation approval limits and be recorded on the school register.
• If the value of outgoing sponsorship exceeds $25,000, it needs to align with school financial delegation approval limits and be recorded on the school register and central department register by the Communications Division.

It is useful to know if another school is attempting to secure sponsorship from the same organisation as you, which is why high-value school sponsorships need to be registered on a sponsorship register, managed by the department’s Communications Division.

Finalising contracts and financials

Once the necessary approvals and agreements are all in place, a confirmation letter and contract are required from the school.

Templates for sponsorship engagement letters and contracts are available on the Resources tab and should be provided to the sponsoring or sponsored organisation with a copy held on file.

Financial sponsorships should be treated like any other outgoing financial arrangement and established school financial management policies and processes must be followed.

Schools must record incoming sponsorship funds in CASES21 as 74580 – Other Locally Raised Funds.

In addition to formal processes, it is worth keeping in regular contact with your sponsorship partner to assess and maintain the sponsorship relationship.

Tax implications

If a school receives sponsorship in a form of cash payment, the received funds are subject to GST. The following examples illustrate the types of sponsorships where a GST liability would arise.

• A company gives money for a scholarship and the name of the company is included on all written material about the scholarship – the benefit to the sponsor is a form of advertising.
• An organisation buys rights or benefits from the school, including naming rights for an event or program. The rights or benefits typically relate to the sponsor’s reputation, management or communication objectives and are delivered through associating its name, products, services or activities with the school.

Evaluation

School sponsorships valued greater than $25,000 (incoming and outgoing) must be evaluated when concluded and their outcomes documented within 3 months (and (or) within the same financial year).

All evaluation and reporting forms are available on the Resources tab.

For more information, contact the Communications Division at sponsorship@education.vic.gov.au

Evaluations are used to update guidance and are used to inform future sponsorship decisions.

Please note that some details of your evaluation may be shared with others in the department who may be seeking a sponsorship with the same organisation.

Useful tools and references

The Guidance and Resources tabs have resources to assist schools to apply this policy and assess sponsorships.

Definitions

Sponsorship
Sponsorship is typically where an organisation (the sponsor) supports another organisation’s activities (such as an event or upgraded facilities) through the provision of money, goods or services in exchange for the promotion of the sponsor’s goods, services or activities (such as through logo placement, naming rights or public acknowledgement of the support received from the sponsor). For example, a local bakery supports a school’s fete by providing free or reduced price baked goods for the school to sell at a food stall, in exchange for their logo being placed on the school’s advertising for the fete, alongside a sentence thanking the bakery for their contribution.

There are 2 types of sponsorship:

• Incoming sponsorship is where an external organisation provides financial or in-kind support for a school initiative, event or program.
• Outgoing sponsorship is where a school provides financial or in-kind support to an external organisation for their initiative, event or program.

Sponsorship does not include:

• donations (refer to Finance Manual – Section 9.7 Locally raised funds – Donations)
• philanthropic efforts (refer to Philanthropic Partnerships)
• the sale of advertising space, editorial comment, or advertorials (refer to Advertising)
• grants or discretionary funding provided to external individuals or organisations for a specific purpose
• bequests which impose no obligations on the recipient and offer little or no rights or benefits to the provider
• joint ventures or consultancies.

Advertising
Advertising is typically an arrangement where an organisation or individual (the advertiser) purchases public space from another organisation (the publisher) for an agreed price to advertise their product or service and there are no additional benefits to the publisher. For example, a company pays a school to buy space in a newsletter or magazine or a billboard to advertise their services to the school community, or the school pays a company to advertise the school to prospective students and families. The only benefit to the publisher is usually the payment received from the advertiser for advertising the product or service (noting that payment can be waived or in kind).

Advertising may be in the form of print, radio, television, outdoor, online and other digital platforms.

Bartering
See ‘In-kind’ definition.

Benefits
Benefits refers to what a school receives or provides for its sponsorship investment and any additional or potential value.

Bequests
The transfer of personal property – such as cash, securities or other assets – upon the owner's death, as specified in their will.

Consultancies
A consultancy is a particular type of contract that is implemented primarily to perform a discrete task for an entity that facilitates decision making through provision of expert analysis and advice, and (or) development of a written report or other intellectual output.

Donations
A donation is a one-off untied gift that has no requirement for benefits in return. If the donor receives more than 'mere recognition’ (that is, advertising), the donation must be treated as a sponsorship. Examples of donations include:

• the school is given $2,000 by a former student’s accounting firm with no requirement to provide any goods or services in return. The firm is mentioned on an honour board as having donated the money
• the school is given timber by the local hardware store to rebuild a stage at the local school. No goods and services are requested in return and no payment is requested for the timber
• the school raises money for a particular charity (for example, Red Nose Day or the Royal Children’s Hospital) and wishes to donate this money. The school should retain sufficient documentation (for example, a charity flyer or charity acknowledgement) to support the payment.

Grants
Discretionary funding provided to external individuals or organisations for a specified purpose directed at achieving goals and objectives consistent with government policy, where the grant recipient is selected on merit against a set of criteria.

In-kind support (also bartering)
This kind of sponsorship is where a sponsor provides services or goods instead of cash. Sometimes this is called ‘value in kind’ or ‘contra’ sponsorship.

Joint ventures
A joint venture is a business arrangement where 2 or more parties agree to pool their resources for the purpose of accomplishing a specific task.

Naming rights
This refers to a form of sponsorship where a sponsor, in addition to other rights and benefits of sponsorship, has negotiated to have their name added as a prefix to the sponsored activity.

Partnership arrangements
For the purpose of this policy, a partnership is defined as a relationship between 2 or more organisations around communications and branding, for example, awards events having a media partnership at the corporate level. There are a number of different types of partnership and schools may need to seek advice to ensure they are applying the definition of partnership correctly.

Philanthropy
Philanthropy is seen as involving charitable giving to human causes on a large scale. Acts of philanthropy include donating money to a charity, volunteering at a local shelter or raising money to donate to cancer research.

Related policies

• Advertising
• Conflict of Interest
• Finance Manual – Financial Management for Schools (see Section 9.8 Locally raised funds – Sponsorship)
• Gifts, Benefits and Hospitality
• Partnerships and collaboration with other schools
• Philanthropic Partnerships
• School Communications Toolkit (staff login required)
• Victorian Government Sponsorship Policy: Relevant Legislation and Policies

Relevant legislation

• Code of Conduct for Victorian Public Sector Employees
• Education and Training Reform Act 2006 (Vic) – Part 2.3
• Ministerial Order 1280 (DOCX)
• Privacy and Data Protection Act 2014 (Vic)