Program T-shirts and Accessories

Question: Our health system provides resources to schools (focusing on limited resource schools) that 1) provide health education to students, staff and families about nutrition and activity and 2) motivates them to participate in a "5210 Challenge".  Our community has identified the need to promote 'raising healthy children' with a specific goal of 'Advancing the safety, well-being, resilience and healthy development of children and youth.'

5210 emphasizes healthy eating, increased physical activity, decreased screen time and eliminating sugar-sweetened beverages. So, providing the program, we feel, easily qualifies as a community benefit activity. Our "What Counts" question relates to the dollars spent in providing 5210 t-shirts to all program participants.  The t-shirts do have our health system logo on them as well as the 5210 Challenge text, thus we have previously not counted any expense as we assumed it would be seen as marketing for the health system.  Program leaders oppose this notion and state that many children would not participate if we did not provide the specific t-shirt incentive. 

Does having the health system logo on the t-shirt incentives disqualify them as a reportable program expense, because it could be seen as marketing for the health system?  If so, is it reasonable to report a percentage of the expense; equal to perhaps a reasonable amount that would be spent on an incentive without a logo?

Recommendation:  If experience has shown that the t-shirts are an effective incentive to get children to participate in the program we suggest counting all the costs. However, if you want to be conservative in your reporting you could subtract a percentage of the cost that reflects marketing.

(December 2014)

Please Take Note: The information provided does not constitute legal or tax advice. The material is provided for informational/educational purposes only. Please consult with counsel regarding your organization's particular circumstances.