How to Protect Against Corruption Risks?
In France, corporate philanthropy represents €3.6 billion. €2.5 billion is invested in sports sponsorship. But while sponsorship and philanthropy attract public and private actors, they open the door to corruption. To help organizations protect themselves, the French Anti-Corruption Agency (AFA) published in March 2024 the recommendations guide “Securing Corporate Sponsorship and Philanthropy Operations.” There is no need to be subject to the obligations of the Sapin 2 anti-corruption law to draw inspiration from these best practices. The guide is intended for all companies, administrations, and local authorities wishing to control corruption risks related to their sponsorship and philanthropy operations.
Not defined by law, sponsorship and philanthropy are two practices sometimes confused. While these operations have similar purposes, they differ on one point: the consideration.
Discover here the complete definition of philanthropy.
Sponsorship and philanthropy represent two distinct forms of support, each with its own differences and implications regarding corruption risk.
These practices are mainly distinguished by their intent and considerations:
This fundamental distinction directly impacts corruption risk assessment and requires appropriate controls.
As communication tools, sponsorship and philanthropy combine advantages. They allow:
Philanthropy also provides tax benefits, defined in Article 238 bis of the General Tax Code.
Discover in our dedicated article all the advantages of a philanthropy policy in companies and organizations.
Although governed by strict legal and tax rules, sponsorship and philanthropy open a breach in the organization. As soon as there is a consideration, symbolic or clearly displayed, the risk of corruption appears.
Sponsorship and philanthropy foster encounters between public and private sectors, between professional and private spheres. These connections multiply the risks of integrity violations. Here are some examples:
All these examples illustrate acts of active or passive corruption. Depending on the situation, they may be coupled with accusations of favoritism, illegal conflict of interest, or influence peddling.
Another risk related to sponsorship and philanthropy: the misappropriation of considerations or donations. These offenses are punishable by law.
The AFA lists in its guide several cases of integrity violations. For example, the act of corruption is recognized if an invitation, offered in consideration of sponsorship, is used by the executive to obtain an advantage from a collaborator (obtaining a contract, expediting a procedure, etc.).
Similarly, money paid as part of philanthropy must only finance the operation concerned. In case of misappropriation of funds, the donor may see their civil and criminal liability engaged.
The AFA draws attention to the risk of misuse of corporate assets, punishable by law. It lists three conditions that protect against this accusation. Sponsorship or philanthropy must:
Public procurement, sponsorship, and philanthropy are not incompatible. But they require heightened vigilance to ensure equal treatment among candidates and transparency of procedures.
The AFA sets a clear rule: a company can sponsor an event organized by a local authority and an administration can support a person through philanthropy, as long as these connections do not condition the obtaining of a public contract, a concession contract, or a subsidy.
The anti-corruption agency also recalls the subtle boundary between sponsorship and public procurement. Thus, a Department that paid a subsidy to an IT company in exchange for providing software in schools saw the sponsorship contract reclassified as a public contract.
The AFA issues non-binding recommendations in its guide to control corruption risk related to sponsorship and philanthropy operations. Even if they are not subject to the anti-corruption obligations of the Sapin 2 law, the AFA invites all public and private actors to define a rigorous sponsorship and philanthropy policy to protect themselves and their employees.
Geographic location, relationships with public actors, media exposure, strong competition, public sector, international group, etc.: risks related to sponsorship and philanthropy vary depending on beneficiaries, the donor's activity, and context.
To deploy proportionate anti-corruption measures, the first step is to identify and characterize these threats in the risk mapping. The AFA recommends including the assessment of third-party beneficiaries, whose prevention systems are often fragile, sometimes non-existent.
Among the risks that should prompt caution, the AFA cites unclear project objectives, irregular statutes, non-transparent allocation of contributions, absence of published or certified accounts, presence of politically exposed persons, or economic dependence.
Structuring governance, management, and administration of sponsorship and philanthropy operations helps prevent risks created by urgency, individual decisions, and close relationships. The AFA invites organizations to:
To secure decisions, the AFA encourages companies and local authorities to formalize their sponsorship and philanthropy policy, consistent with their other anti-corruption policies.
This formalization involves drafting a project review procedure. This document defines at minimum the objective criteria for project selection. The organization can notably determine the nature of operations, the type of authorized beneficiaries, the maximum amount of financial support, as well as accepted considerations (compatible with the gifts and hospitality policy).
Mandatory for companies and administrations subject to the Sapin 2 law, the internal code of conduct illustrates behaviors to be prohibited.
The AFA recommends implementing a procedure for processing sponsorship and philanthropy requests. Centralizing data and maintaining a written and documented record help respond to audits and suspicions of corruption.
Each operation must be formalized by a signed agreement. This may notably mention the nature and purpose of the project, the beneficiary's obligations, the allocation of support, details of considerations, the person responsible for monitoring the operation, the beneficiary's commitments regarding anti-corruption, transmission of a financial report, etc.
The Sponsorship and Philanthropy Policy must be shared within the organization. Internal communication, as well as visibility given to projects, strengthen corporate culture and facilitate information reporting in case of suspected corruption.
Implementing a whistleblowing system is mandatory for companies and legal entities under public law with at least 50 employees, pursuant to Article 8 of the Sapin 2 law. This system can be opened to beneficiaries of sponsorship and philanthropy operations to report questionable behavior.
To ensure the effectiveness and compliance of sponsorship and philanthropy operations, the AFA recommends supplementing communication with training and awareness actions, in accordance with Article 17 of the Sapin 2 law.
Every risk must be associated with control systems, adapted to the profile of the organization, beneficiary, and operation. These systems operate at several levels:
Sponsorship and philanthropy are virtuous practices for donors and beneficiaries. But they increase corruption risks.
To control them, the AFA encourages companies, administrations, and local authorities to deploy a rigorous management and control policy. Values Associates offers you a simple, intuitive, customizable, and scalable digital solution to monitor, track, and secure your sponsorship and philanthropy operations. With our Sapin 2 software, you can communicate and strengthen your professional relationships with complete peace of mind, in compliance with the law and the Sapin 2 anti-corruption law.
In partnership with Forvis Mazars, Values Associates has developed software dedicated to the Sapin 2 law, allowing you to manage your compliance. Discover it and request a demonstration.
