By Tony Poderis
Sponsorships and underwriting are different labels for basically the same thing: funding donated for the support of a project, program, event, initiative, activity, or even a salary. In general, foundations are identified as underwriters and corporations as sponsors. Individuals can be either, but in most instances underwriters and sponsors will be foundations and corporations.
The amount of publicity and recognition also helps answer the question of whether a funder is an underwriter or a sponsor. The word sponsor connotes a higher level of participation and consequently higher visibility than does underwriter. If one of the benefits a funder is seeking in exchange for support is publicity and recognition, then that funder is best identified as a sponsor. In very low visibility situations such as the funding of a position -an executive director, for instance—we would probably refer to the donor as an underwriter, even if the donor was a corporation. In the end it doesn’t really matter whether you call a funding opportunity underwriting or sponsorship. Do what seems natural, what is usual within your community, and always do what the funder wants. If a corporation would rather be named an underwriter than a sponsor, then it’s an underwriter.
For the purposes of this discussion, I will use the labels sponsor and sponsorship in instances where we could be talking about either a corporation or foundation. Only when I wish to restrict the application of what I am saying to a foundation will I use the labels underwriter and underwriting.
“Package” Your Programs, Services and Events
Sponsorship, especially corporate sponsorship, is a relatively recent fund-raising strategy compared to other fund-raising endeavors. A sponsorship campaign is like a capital campaign, for example, in that it raises money for a specific purpose. Unlike a capital campaign, however, the money raised is not used to purchase an asset, but rather to cover an expense. Like a capital campaign, sponsorships can provide naming opportunities—the ABC Corporation Lecture Series or the XYZ, Inc. Neighborhood Improvement Program, for instance. Sponsorship opportunities such as these often grow out of an organization’s annual budgeting process, allowing it to pay for things it would have done even if a sponsor hadn’t risen to the bait of a naming opportunity. These sponsorships permit an organization to package a need, in effect, as a means of boosting its annual support. The idea is to give greater credit and visibility to a sponsor in exchange for an increased contribution. A corporation will look to a sponsorship with a non-profit organization as the means for the corporation to:
- Enhance its corporate image
- Promote internal good will among its employees
- Reach high caliber volunteers and donors, many of whom are leaders in their professions or corporate executives
- Foster the association between its customers and the sponsored organization
- Create general public awareness and excitement
Be Creative and Boost Your Annual Fund Potential
At one end of what I call the sponsorship spectrum are the donors who provide an organization’s bedrock annual support. It makes sense to give these donors as much recognition and credit as possible. If their gifts are of a size to warrant, you can even specify that certain programs, efforts, or activities have been made possible because of their support. Once an organization has made a practice of linking gifts from certain donors to certain of its activities, the next step is to offer those donors sponsorships. Ideally, a single donor becomes the sole sponsor of an activity. The activity may be new, or already in existence. The sponsor gets the exclusive benefit of associating its name with the event or program. Often a sponsor’s name can become synonymous with an event. When I say Thanksgiving Day parade, I bet the name Macy’s jumps to mind. In a survey some years back, 97 percent of the participants made that association.
The beauty of funding something in this way is that you can ask for more money for a sponsorship than the donor was contributing to your annual fund-raising campaign. You can also ratchet up the cost of the sponsorship every few years: One that was available for $10,000 three or four years ago now requires a $15,000 contribution.
At the other end of the sponsorship spectrum are the companies and individuals who have shown no interest in your organization in the past. They may even have turned down earlier solicitations. A named sponsorship opportunity that provides high visibility can be just the ticket to drawing in a prospect who has previously been reluctant to give.
Be Alert For Opportunities To Obtain New Or Increased Funding
- Examine, analyze and investigate at all times all that you do in your organization to know what will appeal to prospective sponsors and underwriters
- Advertise and promote the programs and services you have available for sponsorship and underwriting through personal contacts, newsletters, letters of inquiry, etc.
- Identify prospects and their products and services which could have a mutually beneficial connection to your organization
- Develop, with the assistance of all appropriate staff, the necessary elements for preparing proposals to prospects and seek trustee involvement through their peer contacts and presentations of proposals
- Establish with the sponsor or underwriter the desired goals and objectives of the proposed association
- Develop with each sponsor or underwriter a detailed and realistic action plan and calendar with clearly defined responsibilities
- Be responsible for the full “servicing” of the sponsorship or underwriting program, including employing all necessary organization staff support and participation. You must do everything you said you would do. The number of times and where the sponsor’s logo is to publicly appear, entertainment opportunities, access to your leadership, etc., and other promises and agreements, must be fulfilled.
- Evaluate ongoing and completed sponsorships and underwriting programs to the satisfaction of the donors to maintain and continue support and to perfect models for future proposals and presentations
The first step in seeking sponsorships is to identify likely projects, programs, events, initiatives, and activities. I can’t think of an organization that would not have some underwriting or sponsorship opportunities. Remember, creating a sponsorship often requires nothing more than a rethinking of the means by which you fund something. Nearly any discrete endeavor can be pulled from a general budget and packaged, such as underwriting six months of a scoutmaster’s service to 20 inner-city children, three months of computer training for a welfare mother to help prepare her for employment, or sponsor an education outreach program enriching the lives of 100 students, etc. A “grass-roots” organization sheltering abused children could have donors sponsor a child or underwrite the cost of a social worker’s service for a year, etc.
Finding the best opportunities for sponsorship campaigns requires fund-raisers to “mine” their organizations by looking hard at what activities are planned. Fund-raisers should meet regularly with other staff to keep abreast of developments and to solicit their opinions about which activities might be viable for sponsorship. Once a sponsorship opportunity has been identified, a full-fledged proposal needs to be developed. This should include a budget, a case for giving which shows how the community and the organization will benefit, and a complete explanation of how the sponsor will benefit from the relationship.
Next comes the rating and evaluating of prospects. The goal is to narrow the field to the single best candidate and a handful of backups. A standing sponsorship committee of the board of trustees can be a great aid here and provide better leadership of this task than a committee formed separately for each sponsorship project.
Committee members, other fund-raisers, and organization management should keep well informed about both the kinds of endeavors that area foundations are willing to underwrite and which corporations are likely to be attracted to a sponsorship opportunity. That means staying on top of local and national business news. A firm that may have shown no past interest in supporting your organization (or any other, for that matter) can suddenly find itself needing the recognition and publicity a sponsorship opportunity can deliver. A marketing or public relations agency can be a useful advisor for identifying potential sponsors, and an organization should try to involve such a firm on a volunteer basis or perhaps even hire such services.
Once a sponsorship opportunity has been identified, a general proposal has been developed, and a candidate or candidates have been identified, the proposal must be tailored to fit each prospective donor. In this age of desktop publishing it is easy to produce a professional-looking prospectus targeted to each sponsorship candidate.
In general, sponsorship solicitations should be sequential. Only rarely, if ever, would you offer a sponsorship opportunity to two or more prospects at the same time. The danger is that more than one will accept. However, if the sponsorship is one of a number of similar opportunities, then one prospective sponsor may be able to be moved. If the organization is offering a unique named opportunity, then having to go back to a prospect that is in the process of accepting the offer and say you gave it to someone else has the potential for permanently damaging that relationship.
However, each sponsorship opportunity is its own campaign, and you can undertake several sponsorship campaigns simultaneously with other fund-raising campaigns.
You would do well to allow as much time as possible for a sponsorship campaign. Even a turndown takes time, and a sponsored endeavor usually has a “drop-dead” date—the point after which it becomes impossible to recognize and publicize a donation and include the donor in sponsorship publications such as brochures, schedules, and programs and in activities such as dinners, cocktail parties, and openings. Fund-raisers need to plan backward from the drop-dead date in order to allow time to solicit more than one potential sponsor if that becomes necessary.
Sponsorship campaigns have no ideal length, and because they are conducted behind the scenes, they can go on for as long as it takes to elicit a positive response, or until the drop-dead date has passed. The invisibility of this kind of campaign means that failure causes little real damage, other than the missing funding. Since failure in a sponsorship campaign is “private” and there is no hard-and-fast time frame beyond the final drop-dead date, organizations need to be very careful about not letting sponsorship opportunities slip away. Sponsorships need to be pursued with the same vigor as annual, endowment, and capital campaigns.
Don’t “Give Away the Store”
Perhaps the most common mistake made in a sponsorship campaign is to let ancillary expenses rise by making overly generous commitments to the sponsor. Corporate sponsors are particularly likely to suggest expenses which are covered by the sponsor’s gift but which are not part of the sponsored endeavor’s regular budget. Items which the sponsor may ask for as part of its benefit package can include, but are not restricted to:
- Advertising
- Parties and other free entertainment for customers, clients, and employees
- Hundreds of free tickets, which could otherwise be sold, to an event
- Special publications, posters, and other printed materials
- Elaborate press functions
There is a tendency on the part of fund-raisers to promise special considerations to sponsors. That inclination must be resisted with as much tact as possible. Out-of-pocket expenses can destroy the value of a sponsorship donation if they are allowed to get out of hand.
A sponsored endeavor that does not meet the organization’s or the sponsor’s expectations poses another potential danger. Neither foundations, nor corporations, nor individuals want to have their names attached to negative publicity. Controversial endeavors do not make good sponsorship opportunities. Be sure there is no hidden potential for controversy in those activities for which you seek sponsorship.
Determining What to Offer Sponsors Is a Team Effort
In my experience, the biggest problem fund-raisers are likely to encounter with sponsorships is that there is always somebody back at the shop—a staff member or trustee—who objects strenuously (and, to my mind, often unreasonably) to some of the benefits given in exchange for sponsorship. The impact of these objections can be diminished by having the key players clearly define in advance what courtesies and considerations will be extended to a sponsor. If a non-profit organization earns a portion of its income, then the people running the marketing operation need to be apprised of and in agreement with just how much of what they sell is—from their point of view—going to be “given away” to a sponsor. Good relations between an organization’s fund-raisers and marketers are very important. They need to work together as a team to produce the income which is their common goal.
Most Sponsorships Are Philanthropy-Driven
It is important to remember that all donations, including sponsorships, are basically philanthropic in nature. What we do to recognize a sponsor’s contribution is just that—recognition. Be careful how you tout “market value” of sponsorship benefits. An organization should not look at a sponsorship as a quid pro quo arrangement with each contributed dollar “buying” additional benefit for the sponsor. All but the most inexperienced sponsors know they are making a donation. Don’t work so hard to convince sponsors of the value they will receive that they cease to see their sponsorship as a philanthropic endeavor.
An organization mounts a sponsorship campaign in order to increase its donated income. Sponsorships are an effective way both of enlarging existing annual gifts and of drawing in new corporate donors. There are secondary benefits as well. One is the credibility to be gained when a company or foundation allows its name to be associated with that of the organization. This quite plainly and simply amounts to an endorsement, and the bigger the company or more highly regarded the foundation, the greater the impact of that endorsement. An organization establishes a richer, more complex relationship with a donor who is also a sponsor. In the case of corporate sponsors, this often leads middle and upper-level corporate management to deeper involvement with the organization, resulting in the expansion of its volunteer base and the development of potential leaders for its fund-raising campaigns.
Often, one of the benefits extended to sponsors is a reception or entertainment event. When this happens the organization’s trustees, administrators, and fund-raisers have the opportunity to rub shoulders with corporate executives and other invited guests. It is a chance to meet and get the ears of some of a community’s most important people. Suddenly, you are sitting at a table with the company’s CEO and spouse or the public relations VP and spouse, and that is a true networking opportunity.