Charity Sponsorship Agreement Template for Indonesia

A Charity Sponsorship Agreement is a legally binding contract that establishes the terms and conditions for corporate sponsorship of charitable organizations in Indonesia. This document ensures both parties comply with Indonesian law while creating a structured partnership that benefits the community and supports your corporate social responsibility objectives.

When do you need this document?

You need a Charity Sponsorship Agreement when your company wants to formally sponsor a charitable organization (Yayasan) in Indonesia. This is particularly important for publicly listed companies that must allocate a percentage of their profits to social and environmental programs under Indonesian regulations. The agreement is essential when providing substantial financial support, ongoing sponsorship arrangements, or when seeking specific marketing benefits in return for your charitable contributions. You'll also need this document if your company operates in sectors where corporate social responsibility is mandated by law, such as mining, oil and gas, or other natural resource industries.

Key legal considerations

Several critical legal aspects must be addressed in your sponsorship agreement. The contract must clearly define the sponsorship amount, payment schedule, and duration of the arrangement. You need to specify what benefits your company receives, such as naming rights, logo placement, or promotional opportunities, while ensuring these don't compromise the charitable organization's tax-exempt status. The agreement should include detailed reporting requirements, outlining how the charitable organization will document the use of funds and provide accountability reports. Termination clauses are crucial, establishing conditions under which either party can end the sponsorship and procedures for handling unused funds. Additionally, the contract must address intellectual property rights, particularly regarding the use of logos and promotional materials by both parties.

Legal requirements in Indonesia

Indonesian law imposes specific requirements on charity sponsorship agreements that you must carefully observe. Under Law No. 16 of 2001 on Foundations and its 2004 amendments, the charitable organization must be properly registered as a Yayasan with valid legal status. Your agreement must comply with Indonesian Civil Code provisions governing contract formation and enforcement. Tax considerations are particularly important under Law No. 36 of 2008 on Income Tax, which regulates charitable donation deductions and requires proper documentation for tax benefits. The agreement must include anti-money laundering compliance measures as required by Law No. 8 of 2010, especially for large sponsorship amounts. If your sponsorship involves religious charitable activities, you may need approval from relevant religious authorities. Additionally, certain charitable activities require coordination with local government authorities, and your agreement should specify these compliance obligations and assign responsibility for obtaining necessary permits or approvals.