Cultural sponsorship is on the rise in Portugal, and has become an important source of funding, whether directly or indirectly, of institutions and cultural activities in the main.
Generally speaking, cultural sponsorship is a network of private entities that support cultural bodies in exchange for tax breaks given by the State, in a spirit of so-called corporate social responsibility.
We have seen a change in how companies invest in the community, with a healthy interest in Heritage and the Arts. As business practices have become more integrated, community investment has grown and transformed the kind of projects which are considered suitable for the public. This development has resulted in less purely philanthropic, and more strategic, business-oriented practices. On the other hand, it is an ever more interesting opportunity for cultural bodies to build relationships with the entrepreneurial sector.
In accordance with the legal framework created in 1986, which has since seen a number of changes, cultural sponsorship today is granted certain provisions in the form of legal tax dispensations against the State budget.
In general terms, this follows certain guiding principles, such as:
· sponsorship, informally-speaking, is a self-regulating relationship between cultural and economic partners, in which the State limits itself to providing the referred fiscal incentives;
· it can be undertaken by any natural or legal person, private or public, as long as it follows general business practices; as a rule, all Public Entities, Foundations and Cooperatives that develop culturally-orientated initiatives can be legible for donations and benefits according to the regulations of Sponsorship Law;
· the tax benefits, in the case of natural persons, are generally treated as costs of the donations given or as deductions to charity; in the case of donations made to the State or to public sector legal persons (except to certain types of Foundations), the tax breaks are granted automatically; in the case of donations to private entities, the attribution of the referred benefits depends on recognition of the cultural interest of the initiatives or cultural activities practiced by these institutions – the so-called ‘Manifesto of Cultural Interest’;
· finally, self-regulating cultural sponsorship can also lead to further non-fiscal exchanges with the entities being sponsored.
To sum up, the practice of cultural sponsorship is a fund-raising strategy, achieved through a media awareness and public relations exercise attached to the event/institution (‘opportunism’), intended to improve the market image of the company (reputation, prestige), while helping to promote its products and also improve internal morale as well as maximising relationships with opinion makers.
Legislation applicable in 2009
Decree-Law no. 108/2008, of June 26, which changes various articles of the Statute of Fiscal Benefits, for which reason the Statute was re-published (vide preamble of referred Decree-Law), in whose Chapter X, article 61 and following can be found the legal dispositions related to Sponsorship.
Documents for download
Cultural Sponsorship - Project Form
Cultural Sponsorship - Model 25