Sponsoring a good cause is beneficial for an organization and your business.

Involvement with your community, as a sponsor for a charitable cause, allows you to get your company name and image out into the eyes of the public in a positive way. Not only are you generously helping a worthwhile organization, you also are implementing an advertising strategy called "cause related marketing," which is 100 percent tax deductible.

Sponsoring a charitable cause is a lot more advantageous to your company compared to monetarily contributing to a charity through your business. For instance, S Corporations can't directly deduct charity from their taxable income (contribution deductions are passed through to the shareholders on their K-1s) and C Corporations can only deduct charitable contributions with limitations (generally limited to 10% of taxable income). Sponsorship, on the other hand, is a form of advertising, which makes the expense completely deductible.

Here are some tips when choosing a sponsorship for your company:

• Pick events or organizations that will market your product to the desired target audience. For instance, by sponsoring a little league baseball team, your company may pay for the teams' uniforms and various equipment, but in return, players and spectators will be exposed to your company's name. Your company also could offer team promotions by offering a free sample of your product when the team wins.
  
• Sponsor a college student by offering financial assistance to a local student in need. Your company can set up a scholarship for a students' books or a portion of the recipient's tuition. In return, the company will leave a positive lasting impression on students, their families and educators. CAUTION: You may not be allowed to sponsor scholarship funds that benefit your own family. Make sure to seek tax and legal counsel before setting up scholarship funds.
  
• Be involved in as many aspects of the event as possible. For instance, sponsor a charity walk and offer free samples of your product at the conclusion of the walk. Ask staff members to participate in the walk and wear T-shirts imprinted with your company's logo. Sponsor a water stand with bottles that have your company's logo on them. The more ways that you are able to expose your company's name, the better response you're apt to receive.