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Business and Financial Policies and Procedures

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. Unit head approval is always required and cannot be delegated; approvals from additional administrative offices may also be required. A unit head is a department head or higher. Some units do not have department heads; some small colleges do not have departments. When there are only college-level offices for administration, signature should be that of the dean or associate dean as "unit head."

In order 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 entities.

Applicability of the Policy

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

Allowability

Financial support or sponsorship payments must be made to an organization, not to an individual. Prior approval is required from the assistant vice president of procurement services or university OBFS chief business officer in the rare circumstance where a unit is requesting a financial support or sponsorship payment to an individual. If approval is granted for a financial support or sponsorship payment to an individual and the individual is a student, the payment 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 which is completed on behalf of or under the direction of the University of Illinois 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 as long as 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 must be funded from institutional, gift, endowment income, or self-supporting funds (when directly related to generation of the fund’s revenue). Use of any gift funds must comply with the donor’s intent, where applicable. State appropriated funds cannot be used for financial support or sponsorship payments to a Recipient.

As a general rule, the University of Illinois 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 U.S. Mail 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 University of Illinois 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 whether or not the conference promotes or advances one or more of the University of Illinois 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): This financial support or sponsorship payment is made to the Recipient for the Recipient to purchase 100 green, 100 red and 100 blue nametag-lanyards from [Specific Nametag-Lanyard 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 directing that the financial support or sponsorship payment must be used to pay $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 payments 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.
  4. The Unit Head must approve the payment by signing and certifying to the statements included in the Financial Support/Sponsorship Payment Form. Unit Head approval and signature cannot be delegated.
  5. A contract is not required. Skip to Step 7 unless Recipient requires a contract.
  6. If the Recipient requires a contract, the contract should be routed to the Purchasing Division for execution using a Contract Approval Routing Form (“CARF”) (for all units that have not implemented iCS), or the Illinois Contract System (“iCS”) (for units that have implemented iCS) along with the signed Financial Support/Sponsorship Payment Form and any supporting documentation, for execution. If Recipient requires a contract, do not proceed to Step 7 until a contract has been fully executed by Purchasing.
  7. Unit submits payment request in Travel and Expense Management (“TEM”), 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). 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 before processing payment.
  9. All financial support or sponsorship payments are subject to post-audit review for compliance.

Contact University Payables with questions related to a 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 OBFS Policies and Procedures, the unit completes the Financial Support/Sponsorship Payment Form.
  2. The Unit Head must approve the payment by signing and certifying the statements in the Financial Support/Sponsorship Payment Form. Unit Head approval and signature cannot be delegated.
  3. A contract is required. The unit must route the completed and signed Financial Support/Sponsorship Payment Form to the Purchasing Division using a CARF (for all units that have not implemented iCS), or iCS (for units that have implemented iCS).
  4. Purchasing will review the Financial Support/Sponsorship Payment Form to confirm eligibility of the sponsorship payment pursuant to this Section of the OBFS Policies and Procedures.
  5. Purchasing will work with the unit to obtain a Recipient-signed copy of a Financial Support/Sponsorship Agreement.
  6. Purchasing will route the Financial Support/Sponsorship Agreement for review and approval before obtaining authorized signature. Purchasing will provide the unit and Recipient with a copy of the fully executed contract.
  7. Unit submits payment request in TEM, 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 Purchasing Division with questions related to a financial support or sponsorship payment of more than $5,000.

Forms Used in this Procedure

Financial Support/Sponsorship Payment Form
Contract Approval/Routing Form (CARF)
Chicago: Contract Approval/Routing Form (CARF)
Springfield: Contract Approval Routing Form (CARF)
Urbana: Contract Approval Routing Form (CARF) 

Additional Resources

1.3.2 Initiation, Review, and Approval of University Contracts and Leases
Job Aid: Financial Support/Sponsorship Payment to a Non-University Recipient
Vendor Setup and Update
Payments to University of Illinois Students
Managing Self-Supporting Funds Training Guide
iCS Resource Page

Last Updated: August 29, 2017 | Approved: Senior Associate Vice President for Business and Finance | Effective: August 2017

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