For an increasing number of nonprofit organizations, the sale of naming rights have become a significant source of funding. The assets that can be named are limited only by a nonprofit’s imagination. Nonprofits commonly sell naming rights to programs, scholarship funds, endowed chairs, sections of a building, an entire facility, and even the name of the entity itself.
Naming rights gifts are essentially gifts that come with special conditions. Clarifying the nature of these conditions is essential to ensuring the expectations of both the nonprofit and the donor are met. Key considerations include:
- The duration of the naming rights
- How and where the name will be listed including publication and signage expectations
- The nonprofit’s ability to terminate the naming rights in the event the donor’s name is tarnished due to criminal acts or unethical behavior
- Zoning and regulations