Is it still worth doing a campaign for 20% sponsorship?

There are two questions that inevitably arise every year in organizations:

Do we still have room to campaign for 20%, in addition to many other organizations?

Is there enough money for everyone or are we knocking on doors in vain?

What's the deal with 20%?

It is a fiscal facility that allows companies * in Romania to sponsor non-governmental organizations, at no cost to them. Sponsorship is made from corporate or income tax, depending on the tax method of each company.

Basically, the Romanian state came up with this fiscal facility because the role of non-governmental organizations in Romania is very important, and they — together with companies — can contribute to a social change where the state cannot reach it.

Companies can direct in the form of deductible sponsorships 20% of the corporate tax, but not more than 0.75% of the turnover (companies, with a turnover over 1 million euros), respectively 20% of the income tax (micro-enterprises, with a turnover below 1 million euros).

How many companies offer sponsorships

An analysis based on the data provided by ANAF and a study conducted by ARC and EY show us that we are still very far from the maximum potential of the facility. For the last fiscal year for which we obtained ANAF data (i.e. 2020), only 8% of the companies in Romania directed 20% of the tax in the form of deductible sponsorships.

A number of only 49,550 companies out of the 606,995 currently eligible in Romania have registered sponsorship expenses and directed up to 20% of the tax to eligible entities, including NGOs. The good news is that, however, the total targeted value in 2020 was 335.9 million Euros, up 12% from the previous year.

Only 41% of potential sponsorship amounts were used in 2020. The total amount that could be directed in 2020 amounts to EUR 881 million.

You can find all the information in the article here.

The figures speak for themselves – there is still a lot to access, both in terms of amounts and in terms of the number of companies that can sponsor.

Even though 86% comes from companies and 14% from micro-enterprises, both categories deserve the attention of organizations.

In the case of micro-enterprises, which are present in large numbers, only 6% of them got involved through deductible sponsorships in 2020. Therefore, the approach of micro-enterprises could become a priority for NGOs, especially for the diversification of funding sources.

Moreover, micro-enterprises can direct quarterly, are leaner in organization and are usually closer to their communities, so we have the opportunity to create sustainable relationships with them.

Where do you start? 

Do some research in your area and see what micro-enterprises exist in the community. Find out what their specifics are and send them an emotional message, tell them that you are acting together for your community. We know that they react more like an individual donor, that is, to emotion, so write to them about a beneficiary you are helping.

Research is also useful at large companies. There are companies that have clear CSR directions and that require a distinct, more strategic approach with their directions in mind. Then there are companies that do not have this component at the moment, but that can get involved by offering sponsorships through the 20% facility. The latter are the vast majority of companies.

Let's not forget that the most sustainable thing is to have both companies and micro-enterprises that sponsor us every year.

In fact, the good relationship we establish with both types of societies must be future-oriented – how do we see each other together in a year, two, three? What can we do together if we can rely on this long-term sponsorship?

If you're just starting out with the 20% campaign or maybe you're in a moment of re-seating, it's normal to wonder if there's room for all organizations. After all, we are tens of thousands working.

It took us to exist because there are still many problems to solve. We still have steps to take to the ideal world we want to live in, but that just means we have to continue our work.

At the National Fundraising Conference we had the opportunity to hear about small and large organizations that run 20% campaigns that bring them significant revenues and that they can rely on to plan their budgets.

An effective and impactful method is direct mailing, that is, sending a large number of letters to companies and requiring an investment, but it is a method that works year after year.

Why plan your campaign in the summer?

–          after the pandemic-related restrictions are over, we have a multitude of events and learning experiences that we can go to, and most of them are in the fall;

–          usually, in the summer you have more time for introspection, for cleaning up materials, stories, for clarifying where the plans made in December are going;

–          you are more likely to gather the team together and talk about how everyone sees the campaign – it involves the team, you never know where the next brilliant idea comes from;

–          time! It happened to you to be November, to realize that you have another month to set up the campaign, to realize that you have other projects in parallel? This may be the year when this is no longer the case;

–          you have time to build a relationship with the societies you're going to. The relationship doesn't have to be built just around money, but around the change you generate with your sponsor. And the confidence that this can happen lasts.

There's plenty of room under the sun for everyone. This is what we understand from the figures of the analyses, but also from the campaigns of the organizations. We need more confidence in ourselves, that it's legitimate to do these 20% campaigns, that we have the power to change things. And companies have the capacity to contribute to change, but they need to be more responsive to the tax facility. In fact, we can open this discussion with them.

You can find all the information in the ARC and EY Romania analysis about the 20% facility.

* We will say "commercial companies" when we refer to companies and micro-enterprises as a whole. For the rest, we will use "companies" when we talk about companies that sponsor from corporate tax and "micro-enterprises" when we talk about companies that sponsor from income tax.