Your organization may be thinking about exploring the idea of sponsorships or you may not even be familiar with the term. In its most basic form, a sponsorship is the financial benefit to the organization in exchange for some benefit to the business. A sponsorship is different from a grant in that a grant is more philanthropic in nature and the business is not necessarily thinking about its ROI (Return on Investment).
Businesses often have two “pots” of money which can be used to support nonprofits and ministries. Grants are given from the philanthropic “pot” which is money set aside by the business to make a difference in the world. Usually, businesses contribute financially to businesses where their constituents and employees live, work, or play.
The other “pot” of money is the marketing pot of money. Marketing dollars are used to bring in additional business or sales to the business. In other words, marketing dollars are used to make more money. With this thought in mind, the nonprofit needs to pursue sponsorships by asking the question, “What benefits can we provide to business sponsors?”
To get started, sit down with your favorite creative team to develop a list of the benefits you can give to businesses in exchange for money. Note—this list is not to be shared with anyone outside of the team. It is a document that you will refer to as you plan your sponsorship asks. To help you, below is a list of some desirable marketing benefits:
- Exclusivity (sole sponsor)
- Mention (on stage or at an event)
- Social media shout out
- Signage in highly visible area
- Logo placement on website
- VIP Tickets to an event
- Interview opportunities
This list is simply a sampling. Depending on the work of the organization and the type of business being pursued for a sponsorship, the sky is the limit when thinking about the benefits you have to offer.
After determining the benefits, then you will need to establish values for the various sponsorship opportunities. Note—this is one of the most critical steps in the process. If a sponsorship package is priced too high, you will have trouble getting repeat sponsors. On the other hand, underpricing the sponsorship package will damage the credibility or value of the package. When calculating the price, you will want to use both tangible and intangible benefits.
Tangible benefits are portions of the sponsorship where impact can be measured. One way to calculate value is to count impressions or the number of times people will see or hear the sponsor’s name. If distributing coupons or tickets, the number of tickets redeemed could be counted.
Intangible benefits are those benefits that cannot be calculated based on impressions. Intangible benefits can range from the prestige of being associated with your organization to the newsworthiness of an event. Some intangible benefits can include:
- Prestige of organization or attraction
- Popularity of event or organization
- Networking potential
In addition to calculating values for the various benefits you can provide, there are other resources that you can use to help establish the fees for sponsorship levels. The first is advertising rates—how many people will see and hear the message? To calculate this, you will need to look at your social media pages to determine the reach and impressions of each post as well as the analytics associated with your website. You may also want to conduct a sponsorship audit. In its simplest form, you can look at what other organizations are offering to see how you compare.
Sponsorships are a great way to increase the revenue to support the work your organization is doing. However, remember, the public will automatically think that your organization supports the business if their logo is on your site or social media. Choose your sponsors carefully.