Skills sponsorship: follow the guideline!

Companies can receive a tax deduction for making donations. The latter may take different forms. Though donations in cash are most common, they can also be made in kind, especially in skills. Under the skills sponsorship scheme, a company can lend to a non-profit organization its voluntary employees, during their normal working hours, to make the organization benefit, without payment, from the employees’ skills. To help businesses, in particular SMEs, to take advantage of this scheme, the Ministry of the Economy, Finance and Recovery recently published a good practice guideline on its website.

Note: According to the study entitled “Corporate sponsorship in France”, conducted by Admical IFOP in November 2020, only 18 % of SMEs use the “skills sponsorship” scheme, compared to 54 % of large companies.

Implementing the sponsorship

This guideline presents, in a schematic form, the different steps necessary to set up a skills sponsorship scheme. Thus, in the first place, the company must anticipate its sponsorship by evaluating the needs of the non-profit organization. For example, an IT company may propose the creation of the non-profit organization’s website. Secondly, the beneficiary organization must be identified in such a way that it is in line with the values of the company and the aspirations of the employee(s) made available. The loan of labor can then be defined and formalized via two documents: an amendment to the employment contract of the employee (s) made available and a sponsorship agreement. Finally, in the third and last place, it is necessary to ensure the follow-up of the sponsorship mission and its usefulness, both with the employee(s) involved and the company as a whole.

A tax advantage at stake

Companies that donate, including skills sponsorship scheme, to certain non-profit organizations of general interest can receive an income tax reduction, equal to 60% of the payment, without exceeding € 20,000 or 0.5 % of their turnover excluding tax when the latter amount is higher. The rate is lowered from 60 to 40 % for the fraction of the donation greater than 2 million euros, with some exceptions.

Clarification: When the donation takes the form of a skills sponsorship, its valuation is carried out at its cost price, namely the remuneration of the employees concerned and the corresponding social charges. These sums are retained, for each employee, within the limit of three times the amount of the Social Security ceiling, i.e., € 10,284 per month in 2021.

www.economie.gouv.fr, « Guide pratique du mécénat de compétences », novembre 2021