What must a sponsorship contract for an NGO contain?

What the law says

• Sponsorship is governed by Law no. 32/1994, and for libraries Law no. 334/2002 also applies.
• Fiscal Code art. 25 para. (4) letter i): the company deducts the lower of 0.75% of turnover and 20% of the profit tax due.
• The mandatory condition is that the beneficiary is in the Register of entities/religious units on the date the contract is concluded.
• The sponsorship expense is non-deductible, but it is subtracted from the profit tax due.
• The amount received through sponsorship is non-taxable income for the NGO, under Fiscal Code art. 15 para. (2).

Clauses that must not be missing

1. The parties: full name, registered office, tax identification code and legal representatives of the sponsor and of the organisation.
2. The object: the activity, project or campaign being sponsored, described concretely rather than generically.
3. The value: the amount in lei, or the list of goods listed and valued individually.
4. The term and the payment schedule: a single instalment or instalments with clear due dates.
5. The obligations of the organisation: how it uses the amount and what it reports to the sponsor.
6. The right of the sponsor to make its name or brand known in connection with the sponsored activity.
7. The date and place of signing, plus the signatures of both parties.

Practical examples

• A 20,000 lei contract payable in 4 instalments of 5,000 lei: each instalment has its own due date, and the organisation tracks what was actually received.
• A company with a turnover of 2,000,000 lei and 60,000 lei of profit tax: 0.75% = 15,000 lei, 20% = 12,000 lei, so it deducts 12,000 lei out of the 20,000 lei contracted.
• An in-kind sponsorship of 30 tablets is described in an annex, with model and unit value, so it can be booked in the accounts.

Common mistakes

• The contract is signed before registration in the Register of entities, and the company loses the tax credit even if you register later.
• The object is written generically, such as supporting the activity, and cannot be linked to a project in the funder report.
• Sponsored goods are not valued, and the value cannot be booked correctly in the accounts.
• The contract is signed with a micro-enterprise expecting a fiscal benefit that no longer exists since 2024.
• Instalments are not tracked, and the gap between the contracted and the received amount is discovered at year end.

How 4ong helps

• Keeps every sponsorship contract with its signing date, value and instalments, all in one place.
• Compares, for each sponsor, the contracted amount with the amount actually received, per tax year.
• Links the contract to the funded project and to the budget line the amount is spent on.
• Flags sponsors paying micro-enterprise tax, who no longer get a fiscal benefit, so you know what to tell them.