Corporate Sponsorship and Grant of Naming Rights By Nonprofit Hospital Draws Protest

Ever since the Mobile Cotton Bowl Ruling, Technical Advice Memorandum 9147007, the nonprofit community has . . . well, lied to itself about corporate sponsorships.  Are corporate sponsorships advertising, the revenues of which ought to be taxed, or are they donations for which the giver expects no quid pro quo?  We all agreed, for the sake of the College Football Bowl Season and March Madness, to call “sponsorships” no-strings attached donations.  IRC Section 513(i) codifies the big lie and I am a big fan of college football and March Madness so I suppose I am complicit in the whole thing.  Anyway, an article in today’s New York Times discusses criticisms raised by people who oppose a nonprofit hospital’s naming of its emergency department after a big corporate sponsor known for its racy advertising featuring underaged models in sexual themes.  Columbus Children’s Hospital (now known as Nationwide Children’s Hospital after a $50 million dollar tax free “qualified sponsorship payment” from Nationwide Insurance) recently renamed its emergency room after Abercrombie & Fitch, after the clothing seller and advertising provocateur donated $10 million to the hospital:

A coalition of children’s advocates contends that the hospital went too far by agreeing to name a new emergency department and trauma center after another locally based retailer, Abercrombie & Fitch, in exchange for a $10 million donation. The coalition, which includes the Campaign for a Commercial-Free Childhood, several pediatricians and Parents for Ethical Marketing, is asking the hospital to reconsider the decision made in June 2006 to accept the donation. The plea is being made now because ground is to be broken this year for the building to house the emergency and trauma facilities. The 15 organizations and 80 individuals that compose the coalition contend that naming the new center after Abercrombie & Fitch — known for provocative advertising and revealing clothing — sends a grievously wrong message.  “It is troubling that a children’s hospital would name its emergency room after a company that routinely relies on highly sexualized marketing to target teens and preteens,” the members of the coalition wrote in a letter that was sent on Tuesday to the hospital’s office in Columbus, Ohio.

Officials at the hospital declined to talk about Abercrombie & Fitch’s racy ads, preferring instead to focus on the philanthropic aspects of the deal.  Its all good as long as there ain’t no tax, I guess.

dkj