The Case of a Missing Quarter : 25% Sponsorship Rule

The Case of a Missing Quarter : 25% Sponsorship Rule

Aradhana Gupta Debabrata Malik | Oct 14, 2019

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Sponsorship is the act of supporting an event, activity or organization financially or through products or services. It forms the backbone of club activities and fests of our college as well. Getting people or companies to sponsor an event or fest is not an easy task, especially when the institute is located in a not-so-big city like Rourkela. But not having complete freedom to use the hard-earned sponsorship amount is altogether a hard thing to digest. The Student Activity Centre’s rule of 25% retention of all sponsorships has caused widespread dissent amongst the clubs and fest conveners in particular.

The rule which was already mentioned in the SAC’s constitution says that ‘The society is entitled to spend 75% of the sponsored amount and the rest amount will be deposited in the Corpus Fund of SAC for future needs’. Apart from the high percentage, the problem with the rule is that it doesn’t specify what the ‘future needs’ and ‘institute purposes’ mean.

When asked about the rule and its consequences, the club presidents seemed worried and disheartened.

Meenakshi Panigrahy, President (Cognizen) said:

Clubs work a lot to get sponsorships. Since the SAC funds aren’t enough, we switch to sponsors. We are disheartened at the 25% rule. If SAC wants to retrieve some amounts in the corpus fund, it should be a smaller percentage. Also, SAC’s policy should be applicable only on sponsorship amounts only above a threshold amount.

Chinmay Mohanty, President (Inquizzitive) was of the opinion:

As club members we try several places before one or two sponsors agree to sponsor our event. Now if we go to them and ask for 25% extra just because of this rule, I don’t find a reason why they would sponsor us. This directly affects the conduction of our club’s major events which is a matter of concern to us, as we give good cash prizes to winners in our quiz events.

Dhiraj Hasija, President (SAE) opined:

I think the foremost thing is that we didn’t receive any explanation for this decision. Also, clubs’ opinions should be taken into account before a rule is imposed. We face difficulties to reimburse our own budget. We hardly receive budget for basic amenities so this is not a good decision.

Ashish Sahoo, President (Leo) said:

We work very hard to get sponsorships after innumerable visits and then we get to know that we can’t use the whole amount. On top it, the money goes into corpus fund of which we have no idea. There should be transparency in both ways, like if we give SAC some money and records, we should also be entitled to know how SAC funds are spent.

Swayampurna Mishra, President (Clarion) was of the opinion:

Getting sponsorship is already difficult, given the location of our institute. On top of that if we are asked to pay SAC a part of it, with no tangible proof that we can get that money back in future when needed, it just makes things a lot more difficult than they already were.

Manuna Lalnunchama, President(Euphony) was of the opinion:

The authorities said that 25% amount of sponsorships will go to corpus fund which can be used by clubs, fests and societies but it is not clarified how it can be used in the SAC constitution and the reasons that authorities gave us for now is vague and doesn't clarify anything. Once the money is transferred to the corpus fund it won't see the light of the day again. The club and the sponsor are at loss because of this.

We couldn’t include all the club presidents’ opinions as our article would have run into pages if we did. But in short, almost all club presidents were against the rule’s implementation. In addition to that, they were of the opinion that since sponsorships were difficult to get, they should be given more freedom to spend it. Also, they opined that no sponsor would agree to give them a 25% extra amount because of which the club’s events would take a backseat. They were also of the opinion that there was a lack of clarity if they could get back their money in the future when they needed it and also where the money collected would be used.

We also asked the fest convenors as well.

The Innovision 2019 conveners said:

It would be really difficult for the students to level up fests/events. Moreover suppose if a fest gets 4 lakhs as sponsorship and 25% which is 1 lakh is given to SAC. If the 1 lakh is rather spent for the fest’s quality improvement, it would yield better results. If the fests/events are glorified, it would ultimately be the institute who would be proud of, and it would be the happiest moment for SAC. Also, if a group of people of an event/fest work hard to get sponsorship, it would be really unfair for it to be used by someone else. We already pay 18% GST and we give an additional 25% to the corpus fund, we lose 43% of the total sponsorship, which leaves us with a very less amount.

Shrantik Dey, one of the three conveners of Innovision 2019 also proposed a system which in his own words is as follows:

A slab system for sponsorship retention can be made.Say for instance, no amount be given to SAC in case the sponsorship amount is below Rs 15000, Rs. 2000 be given in case it’s between  Rs. 15000 and Rs. 50000, Rs. 5000 in case the amount is from Rs. 50000 to Rs. 1,00,000 and so on.

The Nitrutsav 2020 conveners were of the opinion that:

We know that we get sponsorships due to the recognition of NIT but we also use it to increase the fame of the institute and not for personal purposes. When clubs and fest organizers will ask for 25% extra amount, sponsors would definitely ask for the reason and it is practically difficult for us to bring sponsors as they would question us why they should give money to SAC. Also, students are paying SAC fees to NITR every semester. So there is no need for this rule and it is quite disappointing.

The Vriddhi 2019 conveners opined:

Sometimes the allotted budget for a club/fest doesn’t match their requirements. When someone is opting for sponsorships, it shows that they need additional funds to make the event better. If we deduct 25% from it makes the situation worse. It will decrease the fest expenditure and affect its quality adversely. SAC should only take the excess amount if there is no requirement for it in a fest and make sure that it is being used in other fests.

Apart from the concerns which were also expressed by club presidents, the fest conveners emphasised on the fact that even fests use the sponsorship amount for the betterment of the institute. A good fest would definitely improve the public perception of the institute leading to beneficial results such as improvement in rankings, perceptions and eventually lead to better funding and grants.

Is this rule really justified?

  • DOES SAC NEED CORPUS FUND?:  The SAC budget does not get fully utilized every year and there are no signs of reducing the SAC fees. The left out money goes into the Institute Corpus Fund anyway. Adding more to this corpus fund doesn’t really help any of the parties but still, this rule takes a generous amount of efforts of students which they have put to make their events successful. For all those “future” needs, the budget can be provided from the beginning of the financial year, during budget distribution,

 

  • DOUBTS OF TRANSPARENCY WON’T BE SOLVED: The officials are sceptical about the fact that the clubs do not maintain transparency in spending the sponsorship amount. But since now the sponsorship amount has to be deposited to the SAC Account and then would be utilized, transparency need not be an issue. If one of the clubs is a defaulter in presenting its sponsorship amount and expenses to the SAC, it is not justified to impose restrictions to all the clubs.

 

  •  CAN THE SPONSOR TRUST US?: Sponsors want to see a budget plan before they provide sponsorship to anyone, on telling them that the one-fourth of the amount they give is not spent in the event, it may hamper their interests in sponsoring the event. Also if they are asked for the extra amount they won't agree to pay it.

 

  • EFFORTS-100, UTILIZATION-75: The arrangement of sponsorship is really a hectic task, e.g., after mailing 100 sponsors reply is received from one. When a club/fest arranges sponsorship on their own and they are devoid of the freedom to utilize in their own events/fests, the morale of the team gets low.

 

  • MY EFFORTS, BUT DO I HAVE THE FREEDOM?: Even if the clubs receive a large amount for in the sponsorship they can save it themselves for the future events, while on giving it to the SAC it mostly cannot be withdrawn by the clubs for the future events.

 

  • WHAT ARE WE LEFT WITH?: An amount of 25% with GST of 18% accounts to an amount of 43% getting subtracted from the amount, which is Rs.43000 from 1 lakh (almost 50%).

 

  • WHY WILL I LOOK FOR SPONSORS? The club budget falls short for many active clubs who conduct many events per year, therefore they arrange sponsorship. This rule will discourage the clubs in conducting the events because they will be short on budget again, giving the money to SAC. 

All the points mentioned above give a clear picture of this rule being unjustified, considering its effects on the club activities. However, the authorities had a different view of the rule.

In a conversation with Monday morning the SAC President, Mrs Seemita Mohanty said,

 The rule of sharing 25%  sponsorship with the SAC was already there in the SAC constitution but it wasn’t being practiced . It hasn’t been finalized that we are going to implement it this time or not but the Dean SW has proposed and we kind of agree to it. If we go strictly by SAC constitution then we have to implement it.

With the proposal of implementation of this, hustle was created among clubs and fests conveners, which raised questions for the justification of this rule.

We brought your questions up to Dean Student Welfare, Prof.S.K Patel.

MM: For what events and purposes is 25 % of the sponsorship amount collected by SAC used?

Dean SW: For any organization to sustain, it should have a short as well as long term goals. We use our current resources to fulfil the short term goals but its always best not to spend all the resources now and save some of them for future use. This money collected by SAC will be used for SAC related activities only, for the benefit of the students. All this money is students' money which will be used only for them. MHRD has reduced the institute grant this year, therefore for any future needs, this money will play an essential role. It may be used to buy a Diesel Generator Set to provide back up power supply whenever there are power-cut problems. Even faculty members give around 25% of the amount which they bring as a research grant to the institute amidst tough competition.

MM: There are other ways also through which corpus fund is collected by the institute, also it is government-funded, then why is there a need to take this amount from the clubs, which they arrange for their events?

Dean SW: We don’t have any other sources to get money for this. The government never gives funds for students' extra-curricular activities, it’s always the fees taken from the students. Therefore, we need to save money for future use, let's not spend everything in the current year and inculcate the habit of saving something for the future.

MM: The sponsorship collected is for the event organized by the club, and the rules mention that it is for the future SAC activities, Why don’t we give the club the full freedom to use it to make their event a great success?

Dean SW:  If students don’t want better facilities like DG facility, better sound system in BBA or sufficient bank balance to make advance payment for celebrity show without waiting for the actual receipt from the sponsors, they can be allowed to use the entire amount of sponsorship in the current year. It is up to them to decide.

MM: The official procedure as mentioned in the notice could make things very hectic for the clubs and SAC authorities to organize an event. They have already put a lot of effort into arranging the funds, don’t you think this would discourage them to organize activities?

Dean SW: This isn’t a hectic task, just they need to credit the amount to the bank account and intimate the source of fund and the purpose of use. This will also bring transparency. We are open to simplifying the procedure if any.

MM: Most of the organizations ask for the budgets and plan to invest it when they provide sponsorship. On telling them that 25% of the money given by them is given to the institute, this may harm the interests of the sponsoring organization. What’s your take on it?

Dean SW: The students can tell the sponsors that other expenses need to be incurred while conducting the event, therefore 25% of the amount will be used for it. The sponsors, in many cases, give the sponsorship money after the event is being conducted, but we need money to conduct the event, while the institute money is the government money which cannot be used for these purposes, therefore this extra money kept as savings in  SAC account can be used to organize the events by giving loans to the organizers.

MM: Will this corpus fund be used for the future club events or the clubs bringing the sponsorship will have any privilege in providing money to the SAC?

Dean SW: We can propose amendments in the rule and discuss in the meeting so that we can identify the clubs active in bringing sponsors and sanctioning them more budget in the next year. 

If the students are unhappy with the rule, the amendments can be made, but there is a procedure to follow for this. Since the rule has been approved by the highest authority BOG, any amendment to it need to be approved in the same BOG.  Till that time, it's our duty to follow this rule. Amendments can be proposed after first discussing in the SAC Council. 

The sponsors want to keep a track of the money they give, so that the money given by them is purely used for the event and advertisement, raising his concerns on this issue Prof. Sambit Bakshi, SAC VP, said

This is a policy issue. No meeting has taken place yet and many students have raised their concern. Probably this issue will be placed in a meeting ahead for discussion. So it is not a proper time to express my personal view. Added to it, I think, if at all 25% of the sponsorship money has to be added to corpus for future usage, this needs to be explicitly mentioned to the sponsors in advance and in the MoU.

Students put a lot of effort into getting the sponsorship adding to that the amount which they get is also not enough for the purpose, therefore, the 25% of the total amount which corresponds to a huge proportion of the assets that need to be given away becomes a burden for them.

Raising concerns about this Prof. Alam, SAC VP said,

25% of the amount given is just like a tax paid by the students to the SAC because it is the brand name which brings them the sponsorship, therefore, contributing to it is essential, however, 25% seems to be a huge amount to be paid, it should be proposed to reduced it to a considerable amount.

With a talk, the authorities have planned to conduct a meeting to make considerable changes to the rule and have a discussion on it.

Giving away one-fourth of the sponsorship money arranged for the purpose will affect the organization of the events in the institute by hampering the interest of the students in organizing them. Efforts put by the students to arrange the single penny for the conduction of the event cannot be ignored and this rule demands the quarter of these efforts to be given away. The implementation of the rule is majorly concerned with the security of funds for future use, therefore some amendments should be made in the rule to achieve the best interest of the students, clubs, fests and the Student Activity Centre.

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