Corporate Sponsorship Best Practices
Corporate sponsorship is one of the many ways for companies to invest in their corporate social responsibility efforts. This practice is a plus in the eyes of customers and can help increase brand awareness while instilling loyalty in existing customers. Charitable giving also serves as a valuable tax deduction and strengthens your ties with communities or causes in need, whether locally, nationally, or even abroad.
Nonprofits may limit themselves by focusing on individual donors, rather than contacting companies that might be interested in a corporate sponsorship opportunity. By planning early and creating a seamless system to manage the process, businesses and nonprofits can take advantage of the many benefits that come with corporate sponsorships.
What Is a Corporate Sponsorship?
Corporate sponsorship opportunities at a nonprofit event are one of the most effective ways to achieve these goals. Nonprofits receive the help they need to fund their work, while the company gets a boost in name recognition on top of potential tax deductions. Here are some of the most common ways to sponsor an event:
- Financial sponsorship: A company donates money to sponsor an event. Typically, the nonprofit provides recognition in some way, such as on signage, in the event program, or online.
- In-kind sponsorship: A business provides a nonprofit with complementary goods or services for an event. A printing company could gift free printing services, or a restaurant could supply food and catering services.
- Media sponsorship: A company covers the costs of media promotion for the nonprofit’s event, such as paying for a public radio on-air promotional spot.
Corporate Sponsorship Benefits
Sponsoring a nonprofit isn’t just about getting a tax deduction; it’s also about growing your business and your brand. When you pick the right event, you’ll have instant access to targeted demographics who you can potentially convert into new customers. And, being introduced in a philanthropic setting automatically lends trust and credibility to the relationship.
Corporate sponsorships can also lead to effective lead generation. Discuss in advance what kind of information the nonprofit is willing, or able, to share about the event — whether it’s the guest list or other data — that can help you build a prospects list.
If you sell a product directly, consider paying for booth space at a popular fundraising event. Doing a display at an event sponsorship combines both brand recognition and increased sales that could generate more revenue than other opportunities.
Finally, leveraging social media and other digital content opportunities creates impact and awareness before, during, and after the event sponsorship. It creates authentic content for your existing audience and can also help you grow an online following by tapping into other influencers.
How to Get Started
Both companies and nonprofits can take strategic steps to prepare for the corporate sponsorship process.
For companies, get started by working with your management team to prioritize your philanthropic focus areas. These areas could tie into the work you do or the community in which your company is based. Check your mission statement for guidance. It should help pinpoint your company’s values and the types of organizations you’d like to support.
If you don’t have a mission statement yet, now is the time to create one. You can also check if individuals within the company already work with an organization. Consider polling across the board, from executives to employees. It’s a great way to make everyone feel involved while getting business-wide buy-in.
From the nonprofit perspective, corporate sponsorship opportunities should be identified on the calendar well in advance of the actual event date. Many companies allocate their charitable giving budgets early in the year or even in the preceding year.
The sooner you start the solicitation process, the more likely you are to succeed. Also, be sure to create a process to manage sponsorships, so your donors have a smooth experience from start to finish. You’ll be more likely to get repeat sponsors and build on the event year after year.
3 Best Practices for Companies to Manage Sponsorship Programs
Once you have an idea of the types of nonprofits you’d like to sponsor, take these three steps to ensure the best possible outcomes. From start to finish, you’ll have a headache-free experience that adds real value to your company and your community.
1. Set a Budget in Advance
Corporate social responsibility efforts should have a separate line item in the company’s budget each year. The amount you should devote to sponsorships depends on your company’s size and objectives. Start by determining the most effective way you can support a nonprofit, whether with in-kind services or through financial support.
Plan for each quarter in terms of the financial and time commitments you’ll need from your staff, especially if you plan on offering in-kind services. Entering these obligations on your calendar early on will help you manage your workload throughout the year.
2. Vet Potential Nonprofits in Advance
Once you’ve determined the nonprofits you want to work with, you need to perform your due diligence on each organization before you make a financial commitment. There are several ways to do this. First, complete an online search for news related to the organization to make sure they weren’t involved in any recent public scandals. Also, look at the nonprofit’s online presence to make sure their published values align with yours.
Another important vetting tool is using an online source like GuideStar. This website lets you look at a nonprofit’s public financial statements and other details to help you confirm their reputation. Finally, review other donors, which are usually published online. Having reputable donors already involved with an organization can show you how well a nonprofit operates and manages financial gifts.
3. Use the Right Tools for Tracking and Execution
It’s important to manage your sponsorships effectively to take full advantage of the benefits involved with corporate sponsorships. Whether you donate to one or several events a year, implement smart sponsorship management tools to track your donations and manage your benefits.
A comprehensive corporate-giving platform connects all your CSR efforts in one place. Often, corporate sponsorship doesn’t begin and end with writing a check. Depending on the type of recognition your company will receive, there may be many action items required, such as sending logos and reviewing signage.
Why You Should Use a Sponsorship Tracking Tool
Sponsorship management software can help you customize a workflow that allows both internal and external individuals to submit requests using sponsorship application form, review histories, and send communications. It can also provide impact reporting and budgeting details. An efficient software, such as DonationXchange, can also help facilitate safe, secure disbursement of funds with the ability to interface directly with your existing AP system.
Track Your Return on Giving: Sponsoring a nonprofit should make you feel good, but it should also have a noticeable impact on your business. A tracking tool like DonationX can keep track of your return on giving (ROG) so that you can pinpoint what’s working and what’s not.
Track Your Brand Uplift and Media Impact: DonationX allows you to capture trends and program outcomes to fully understand where your brand stands in the media and the broader community.
Track Leads and Sales Potentials: Depending on the type of corporate sponsorship you choose, you may gain direct access to leads and sales potentials. In such cases, it’s smart to track the growth of your sales funnel to take advantage of those new relationships and gauge the success of the sponsorship.
Track Relationship With Partner Organizations: The right sponsorship management tool also allows you to track relationships beyond leads. Whether you want to manage your relationship with your partner nonprofit better or identify new partnership opportunities with relevant businesses, a good software tool makes sure no follow-up items fall through the cracks.
3 Best Practices for Nonprofits Seeking Corporate Sponsorships
Nonprofits that are new to corporate sponsorships or want to improve their current processes should follow these three steps to a better program. Your staff and donors will benefit from these simple solutions throughout your event season.
1. Utilize Executive’s and Board’s Relationships
While blind solicitations are fine, you can improve your nonprofit’s chances of success by pursuing your executives’ and board members’ existing relationships. Proactively request ideas from your organization’s high-ranking individuals. If your executive director or a board member already has a relationship with a company, ask them to reach out and request a sponsorship.
If your board members haven’t involved themselves in fundraising efforts up to this point, start with the board chair. That person should serve as a positive role model and be the one to corral other board members into helping steward event gifts. Their own companies are a great place to start because they’ve already identified your organization as one that aligns with their mission statement and corporate values.
2. Set Prices That Are Commensurate With Value for Different Types of Businesses
Make sure your companies understand the full value of sponsoring your event. Whether you make your pitch in person, in a letter, or on your sponsorship webpage, highlight the major perks of your event. Outline important details, such as demographics and how many people attend.
Also, tailor your ask to the company you plan to approach. For a dinner event, for example, a company with high-level service professionals may prefer to sponsor a table so they can send guests to mingle with other donors. For an event with a large turnout, sponsoring the program or a banner may be better for a company that sells products to the broader public.
3. Offer Multiple Sponsorship Levels to Engage More Businesses
Equally as important as targeting the right businesses for the right event, is offering multiple levels of sponsorship. Providing options will expand your reach to a broader range of potential donors. Once you start nailing down commitments, you can count on both larger and smaller businesses to diversify your funding. You also won’t have to rely too heavily on a single donor, which would leave you worrying about what happens if they withdraw their support.
As you add layers of complexity to your event, make sure you track corporate sponsors accurately. The right sponsorship management software eliminates errors in double booking perks like program sponsorship.
It also helps to manage the financial side of sponsorships so you can track when the gift is received and determine the appropriate follow-up in terms of recognition. Planning these tools early in the process will remove the stress involved in planning a major event, whether it’s an awards ceremony, a fundraising walk, or anything else.
Whether you’re a company or a nonprofit looking to maximize corporate sponsorships, having the right tools in place is essential to creating a seamless process for both giving and receiving. From tracking funds to assigning tasks for completion before the event, corporate sponsorship software makes it easy to keep your records and to-do list straight.
Ready to take the next step toward creating an efficient, stress-free way to manage your corporate sponsorship program?
Contact DonationX for a Demo Today!