The purpose of the endorsement is to make clear that the named insured who is a sponsor of any sport or athletic contest as described will not have any insurance under its policy for BI sustained by a person while he or she is a participant in that sport or contest. The endorsement would not preclude coverage if a third party were to be injured by the participant.

The distinction between sponsoring or simply donating money or material things is usually not an issue in relation to liability so long as there is no exercise of control, which would create a liability exposure. If a business provides nothing more than a donation or equipment, it may be difficult to place responsibility on the sponsor or donor for injuries or damage. If the sponsor wants to avoid liability, it is best to not control the event, not hold the event on the sponsor's business property, and not conduct itself so as to give the impression of anything like a joint venture between the business and the entity actually conducting the event.

Now, much still depends on the laws of various jurisdictions, so you might want to check with an attorney who is familiar with the law in your area to see how the courts there view this issue.