What is a sponsorship?

A sponsorship is a marketing product that you sell to a business.

Sponsorship is a mutually beneficial relationship in which one party (the sponsor) provides financial support, resources, or services to another party (the sponsored) in exchange for specific benefits, such as brand exposure, marketing opportunities, or access to a target audience.

The goal of sponsorship is to create value for both parties: the sponsor gains visibility and marketing leverage, while the sponsored entity receives the support they need to succeed.

Sponsorships are a flexible and valuable way for nonprofit organizations to generate unrestricted revenue for their work.

Why do businesses buy sponsorships? 

Occasionally, a friendly business will buy a sponsorship solely as a way of supporting your cause. But in most cases, they expect to receive some benefit from their sponsorship. There are lots of different ways to provide benefits and deliver value, but they can all be sorted into three general categories: reputation, advertising, and perks.

Reputation – the business benefits from being associated with your event, your organization, and/or your cause. This might be part of an overall PR strategy to be seen as a good corporate citizen, or it might be because the company is trying to right a historic wrong or mitigate a risk of its product, or it may be because the organization wants to increase its brand awareness in your demographic. When it comes to reputation the audience isn’t just customers – the business wants to improve its standing with the general community, or with its own current or future  employees.

Advertising – by having its name, logo, and message seen by attendees or as part of the marketing of the event, the business hopes to create sales, generate leads, or otherwise get their money’s worth. This is the area where the sponsor will be concerned about ROI – Return on Investment. If a $1,000 sponsorship package generates $10,000 in sales, that’s a whole lot better than if a $10,000 package generates $1,000 in sales.

Perks – Depending on what is being sponsored, there may be incentives or perks with a direct material benefit to the sponsor. For example, complimentary tickets or VIP access. This could range from negligible (free admission to a $5 event) to significant (free VIP tickets that normally sell for $250). Perks are a great way to incentivize sponsorship sales, but you have to look out for COGS – Cost of Good Sold. Whatever you provide has a cost, and that cost decreases the net revenue of your sponsorship.

“I would love to get sponsorships, but I hate begging people for money!“

Hopefully, by now you realize that when you talk to someone about a sponsorship, you are not asking for a donation, and you are certainly not “begging for money.” You are offering them an opportunity to purchase a product that may be of interest to them. Not every business is an ideal candidate for sponsorship, but rest assured, there are plenty of businesses out there to help you achieve your revenue goal.

A good sponsorship is a partnership where the nonprofit and the business both enjoy the benefit, and there are lots of businesses out there looking for exactly those kinds of partnerships.