8.1.4 Determine the Allowability of Specific Financial Support or Sponsorship Payments to Outside Organizations

Policy Statement

Financial support and sponsorship payments may be made to a non-university entity (“Recipient”) to support initiatives that promote or advance one or more of the University of Illinois System’s missions.

See 19 Contracts for specific contract requirements.

To make a financial support or sponsorship payment to a Recipient, the Recipient must have a Banner Vendor ID.

Financial support or sponsorship payments to Registered Student Organizations (RSO) that comply with this policy are allowed.

Reason for the Policy

This policy establishes the authority for—and limitations on—making financial support or sponsorship payments to non-University of Illinois System entities.

Applicability of the Policy

This policy applies to all financial support or sponsorship payments made to non-University of Illinois System entities.

Allowability

Financial support or sponsorship payments must be made to an organization, not to an individual. A financial support or sponsorship payment to a student should be processed following the steps for Payments to University of Illinois Students.

Financial support or sponsorship payments to a Recipient cannot be used to:

• carry on propaganda or otherwise attempt to influence legislation;
• influence the outcome of any public election;
• carry on, directly or indirectly, any voter registration drive; or,
• conduct illegal activity.

A unit cannot use a financial support/sponsorship payment if the unit is making a purchase, as defined in the Illinois Procurement Code (30 ILCS 500/). Examples of what would be considered a purchase include payment of funds to: obtain supplies that will be owned by the University of Illinois System; obtain supplies which the University of Illinois System in turn donates to the Recipient; obtain supplies using a University of Illinois System license, hazardous material certification, or other similar authorization; or, to obtain a service that is completed on behalf of or under the direction of the system.

Financial support or sponsorship payments cannot be artificially divided to circumvent the dollar thresholds established in this policy.

Employees are not allowed to provide the system’s tax exemption certificate to a Recipient because the Recipient is not allowed to utilize the University of Illinois System’s tax-exempt status for any purchases the Recipient makes with the financial support/sponsorship payment.

Financial Support/Sponsorship Payment to a Recipient With/Without Consideration

A unit may make a financial support/sponsorship payment to a Recipient where the System receives no consideration if the Recipient’s activities promote or advance one or more of the University of Illinois System’s missions.

A unit may make a financial support/sponsorship payment to a Recipient where the System receives some form of consideration if it is not a purchase and the Recipient is promoting or advancing one or more of the University of Illinois System’s missions.

Consideration for a financial support or sponsorship payment cannot be a purchase.

See Examples of Allowable and Unallowable Financial Support/Sponsorship Payments below.

Financial Support or Sponsorship Payment for a Recipient to Purchase Supplies or Services

When providing financial support or a sponsorship payment for a Recipient to purchase a supply or a service, unit may identify the intent of the financial support or sponsorship payment to the Recipient.

To maintain the autonomy of the Recipient and mitigate risk to the University of Illinois System, the unit should not direct how, when and where the financial support or sponsorship payment must be used by the Recipient.

See Examples of Allowable and Unallowable Financial Support/Sponsorship Payments below.

Funding

Financial support or sponsorship payments may only be funded from institutional funds (such as ICR), gift income endowment income (as long as the financial support payment is in compliance with the donor intent restrictions assigned to the fund), or self-supporting funds (when directly related to generation of the fund’s revenue).

State funds cannot be used for financial support or sponsorship payments.

As a general rule, the system is required to report financial support or sponsorship payments as taxable income on IRS Form 1099-MISC if the cumulative value paid to the Recipient over the calendar year equals or exceeds $600. See IRS Instructions for Form 1099-MISC for more information. Units must use account code 186550 for all financial support or sponsorship payments.

Funds will be paid via a check sent through United States Postal Service or direct deposit, based on how the Recipient elected to receive payment when completing the vendor setup process.

Examples of Allowable and Unallowable Financial Support/Sponsorship Payments

Allowable Example (with consideration): A financial support or sponsorship payment may be made to a Recipient to sponsor the Recipient’s annual conference if the Recipient’s annual conference promotes or advances one or more of the system’s missions. It is acceptable to obtain consideration:

• such as advertising in the annual conference’s brochure as a sponsor; or,
• in the form of conference registrations.

However, consideration received for financial support or a sponsorship payment cannot be the sole reason for the sponsorship payment.

Unallowable Example (with consideration): A financial support or sponsorship payment cannot be made to solely: purchase conference registrations; obtain access to a vendor booth at the Recipient’s conference; or pay for an individual’s dues to an organization. These activities would be considered a purchase regardless of whether or not the conference promotes or advances one or more of the system’s missions.

Allowable Example (supply): A financial support or sponsorship payment can be made to a Recipient for the Recipient to purchase nametag-lanyards to be given out at their annual meeting if the Recipient’s annual meeting promotes or advances one or more of the University of Illinois System’s missions.

Allowable Example (service): A financial support or sponsorship payment can be made to a Recipient for the Recipient to pay for catering services at their annual meeting if the Recipient’s annual meeting promotes or advances one or more of the University of Illinois System’s missions.

Unallowable Example (supply): A financial support or sponsorship payment cannot be made to the Recipient if the system is mandating that the financial support or sponsorship payment must be used to purchase, for example, 100 green, 100 red and 100 blue nametag-lanyards from a specific vendor or supplier to be provided to attendees of the Recipient’s annual meeting.

Unallowable Example (service): A financial support or sponsorship payment cannot be made to the Recipient if the University of Illinois System is mandating that the financial support or sponsorship payment must be used to pay, for example, $500 to a specific catering company to cater the Recipient’s annual meeting.

Unallowable Example (service): The University of Illinois System cannot make a financial support or sponsorship payment directly to a catering company to cater a Recipient’s annual meeting.

Procedure

To process a financial support or sponsorship payment to Recipients follow the procedures below.

$5,000 or Less

1. Unit determines eligibility of the financial support or sponsorship payment pursuant to this policy.
2. Unit must obtain written assurances (e-mail is an acceptable form of a written assurance) from the Recipient that it will not use the funds to:
   • carry on propaganda or otherwise attempt to influence legislation;
   • influence the outcome of any public election;
   • carry on, directly or indirectly, any voter registration drive; or,
   • conduct illegal activity.
3. Unit completes the Financial Support/Sponsorship Payment Form. This form requires Adobe Acrobat Reader and will not work with some browsers' default built-in PDF viewers. If unable to open the form in a browser, right click on the form's link, choose to save it to the user’s computer, and open it directly in Adobe Acrobat Reader.
4. The Unit Head must approve the payment by signing and certifying to the statements included in the Financial Support/Sponsorship Payment Form. This form requires Adobe Acrobat Reader and will not work with some browsers' default built-in PDF viewers. If unable to open the form in a browser, right click on the form's link, choose to save it to the user’s computer, and open it directly in Adobe Acrobat Reader. Unit Head approval and signature cannot be delegated.
5. For financial support or sponsorship payments less than or equal to $5000, a contract is not required. If the Recipient does not require a contract, skip to Step 7.
6. If the Recipient requires a contract, the request should be submitted to the appropriate purchasing and contract management office (PCM) for processing using the Contract Request Form within Contracts+. The request must include the signed Financial Support/Sponsorship Payment Form and any supporting documentation. If Recipient requires a contract, do not proceed to Step 7 until a contract has been fully executed by the appropriate PCM.
7. Unit submits payment request in Emburse Enterprise, using account code 186550. The unit must attach the completed Financial Support/Sponsorship Payment Form. This form requires Adobe Acrobat Reader and will not work with some browsers' default built-in PDF viewers. If unable to open the form in a browser, right click on the form's link, choose to save it to the user’s computer, and open it directly in Adobe Acrobat Reader, including supporting documentation (as described on the Financial Support/Sponsorship Payment Form; this form requires Adobe Acrobat Reader and will not work with some browsers' default built-in PDF viewers. If unable to open the form in a browser, right click on the form's link, choose to save it to the user’s computer, and open it directly in Adobe Acrobat Reader). If applicable, the unit must reference the executed contract number; however, the contract should not be attached to the payment request.
8. University Payables (“UPAY”) reviews the payment request and the Financial Support/Sponsorship Payment Form. This form requires Adobe Acrobat Reader and will not work with some browsers' default built-in PDF viewers. If unable to open the form in a browser, right click on the form's link, choose to save it to the uer’s computer, and open it directly in Adobe Acrobat Reader before processing payment.
9. All financial support or sponsorship payments are subject to post-audit review for compliance.

Contact UPAY with questions related to financial support or sponsorship payment of $5,000 or less.

Over $5000

1. If the payment qualifies as financial support or sponsorship payment pursuant to this Section of the Office of Business and Finance Policies and Procedures Manual, the unit completes the Financial Support/Sponsorship Payment Form. This form requires Adobe Acrobat Reader and will not work with some browsers' default built-in PDF viewers. If unable to open the form in a browser, right click on the form's link, choose to save it to the user’s computer, and open it directly in Adobe Acrobat Reader.
2. The Unit Head must approve the payment by signing and certifying the statements in the Financial Support/Sponsorship Payment Form. This form requires Adobe Acrobat Reader and will not work with some browsers' default built-in PDF viewers. If unable to open the form in a browser, right click on the form's link, choose to save it to a user’s computer, and open it directly in Adobe Acrobat Reader. Unit Head approval and signature cannot be delegated.
3. A contract is required. The unit must submit the contract request for processing to the appropriate PCM using the Contract Request Form within Contracts+. The request must include the signed Financial Support/Sponsorship Payment Form. This form requires Adobe Acrobat Reader and will not work with some browsers' default built-in PDF viewers. If unable to open the form in a browser, right click on the form's link, choose to save it to the user’s computer, and open it directly in Adobe Acrobat Reader and any supporting documentation.
4. PCM will review the Financial Support/Sponsorship Payment Form to confirm eligibility of the sponsorship payment pursuant to this Section of the Office of Business and Finance Policies and Procedures.
5. PCM will work with the unit to obtain a Recipient-signed copy of a Financial Support/Sponsorship Agreement.
6. PCM will route the Financial Support/Sponsorship Agreement for review and approval before obtaining authorized signature. PCM will provide the unit and Recipient with a copy of the fully executed contract.
7. Unit submits payment request in Emburse Enterprise, using account code 186550. The unit must attach the completed Financial Support/Sponsorship Payment Form, including supporting documentation (as described on the Financial Support/Sponsorship Payment Form). Unit must reference the executed contract number; however, the contract should not be attached to the payment request.
8. UPAY reviews the payment request before processing payment.

Contact the appropriate PCM with questions related to a financial support or sponsorship payment of more than $5,000.