Revenue from corporate contributions, sponsorships, and memberships should not be grouped together because they come with different expectations. The biggest difference between the revenue generated from sponsorships and memberships and revenue generated from contributions is what the donor expects in return.
Contributions are given to your organization without the donor getting anything in return. Your organization will generally thank and recognize the donors for the contribution. This recognition can be anything from a program listing, a listing in your annual report or a photo opportunity for the corporate board members/executives to present your organization with the contribution. Contributions are recorded in the Contributed Revenue section.
In return for buying a sponsorship, a business or corporation expects a level of visibility and recognition for the donor(s). Sponsorship is typically based on a proposal with mutually-agreed upon benefits for both the sponsoring business and the non-profit organization and typically involves marketing. For example, if a corporation is sponsoring an event for your organization there could be proper visibility for the corporation on the event invitation, marketing, and/or program. Sponsorships are recorded in the Earned Operating Revenue section.
Organizations who belong to your organization’s membership program usually enjoy special benefits as part of their membership. For example, organizations who are members of an arts service organization in exchange for discounted services and training. Membership organizations pay a fee and expect. Membership fees are recorded in the Earned Operating Revenue section.
