What is Corporate Sponsorship and How Does It Work?
When you think of corporate sponsorship your first thought is probably a large sports event with logos of companies like Nike and Gatorade everywhere. So how does corporate sponsorship apply to your nonprofit?
Corporate sponsorship is a form of nonprofit funding, other than donations, that can cover the costs of things like events, projects, and even programs. While this can be a complex subject to navigate and negotiate, we will help break down the process for you.
In this article we will cover:
Let’s get started!
What is Corporate Sponsorship
Corporate sponsorship is a company paying to be associated with a nonprofit through events, projects, or programs. For example, a company might sponsor a local relay for life walk, or help to build a new facility.
A word of warning, you should not think of corporate sponsorship as a donation. The main difference between these two is the relationship between your nonprofit and the contributor. With donations, the donor gives their money and/or resources freely and has no expectations in return.
Unlike donations, corporate sponsorship is a mutually symbiotic relationship, so both parties benefit from the partnership. Your nonprofit gets the funding that it needs, and the sponsor gets to be affiliated with your nonprofit.
That said, you do need to convince these sponsors that your organization is the right fit for them. You should be able to assure them that you are a good investment and that you are the best option compared to other nonprofit organizations that they could sponsor. Don’t worry, our tips will help you choose the right target sponsors, and the rest will come naturally.
Why Do Companies Want to Be Corporate Sponsors
The first step of being able to advocate for your organization is to understand what is in it for the corporation. This is different for every organization, but generally it relates to two things: corporate social responsibility (CSR) and recognition.
So what exactly is CSR? These are efforts made by a company to aid in combating social, economic, and environmental issues. Examples would include volunteering in their community, donating to nonprofit organizations, and establishing recycling programs.
Corporate social responsibility has been gaining popularity in recent years, probably because of the less than desirable practices companies had in years past.
In the 90s and 2000s, there were a lot of scandals regarding huge corporations that had exploited the people and environments of communities they were serving. For example, in 2009 Greenpeace accused Timberland of destroying the Amazon rainforest.
Scandals like this led to increasingly aware consumers, and also an abundance of CSR policies being employed in large businesses. Small businesses have since then followed suit, and now we see that almost every company boasts some sort of CSR initiative.
Companies do this to gain trust from consumers, and increase brand loyalty. We are now seeing that consumers, especially Millennials and Gen Zers, are very concerned about social issues, and want to support companies that make an effort to have a positive social impact. In fact, 87% of consumers would purchase a product because the company advocated for an issue they care about.
So how does this tie in with corporate sponsorship? In the example above, we mentioned companies donating to nonprofit organizations. If a company has a CSR program put into place, they usually have a dedicated budget put aside to give back to the community. This can include regular donations, grants, or in the form of corporate sponsorship. This option is a win-win for the company because they get to show that they are giving back to their community while essentially getting market recognition from your nonprofit.
Corporate sponsors also might be looking for ways their employees can be engaged in CSR activities with your nonprofit. Think about how your organization can help them do this before you reach out to them.
Pro Tip: Be sure to analyze the CSR strategy that your ideal sponsors have, and use this information in your pitch to them. For example, if your nonprofit is centered around environmental justice, you want to target companies that want to be proactive in their environmental efforts and explain to them how you can boost their image, and give legitimacy and expertise.
This brings us to reason number two. Companies can use corporate sponsorships to increase their recognition. For example, a bike company might be a corporate sponsor for a local organization that is trying to establish bike friendly practices in the community.
Why? Because the supporters of this nonprofit are likely cyclists, and would see the company associated with the organization that they are a part of.
Essentially, companies use corporate sponsorship to gain visibility for their product or company and separate themselves from their competitors. They might even include corporate sponsorship in their strategy so that they can reach a certain target audience that your nonprofit has access to, like your supporters.
Be sure to look at the company and determine exactly why they would be interested in being a corporate sponsor. It is possible that they are trying to kill two birds with one stone, and are using corporate sponsorship for recognition and CSR purposes. That is great, be sure to mention how they can accomplish that by being a sponsor for your nonprofit.
Now Thomas knows what corporate sponsorship is, but is wondering why it is important for nonprofits. Keep reading to find out!
Why It’s a Great Option for You
Now that you know what corporate sponsorship is, and what is in it for sponsors, we can tackle why it is an excellent tool for your nonprofit.
We already said that it benefits your organization by providing the funding you need, but let's break this down a bit more.
Corporate sponsorship is a great option because it allows you to gain large amounts of funding for events or programs, and in some circumstances can be less of a hassle than other fundraising methods.
For example, in comparison to looking for grants, corporate sponsorship can be a smoother process once you know what kind of sponsors you are looking for. If you have experience in grant writing, you know how much effort this process can take. With sponsorship, you will be able to reach out to multiple contacts and make a sponsorship proposal.
Compared to collecting donations for the same amount, corporate sponsorship will be a much easier way to reach your goal. When collecting a certain amount of money for a specific event or project, donations get a bit trickier, and you need to spend a bit more time on marketing and reaching out to individual donors.
With individual donors you are usually reaching out to a large group of people for many smaller donations, but corporate sponsorship is a lump sum that should cover most, if not all of the cost. With corporate sponsorship, you are essentially putting in the same efforts as you would for one major donor, instead of making the ask to many.
To sum it up, corporate sponsorship can give you the funds you could gain from a grant, with different challenges of navigating a partnership, but still arguably more simple than collecting 1,000 individual donations. This sounds great, right? Win-win for you and the sponsor, high funds, and less follow-up for you and your teams.
How You Can Get Started
Now we can get you ready to make these offers. Before you reach out blindly, you should do a bit of research on who your ideal target sponsor is, and how you can connect with that organization.
Who to Target
The easiest way to find the optimal target sponsor is to think about all of the businesses in your area that may be connected to your mission, values, or your members. For example, if you are an animal shelter, you should think of pet stores in your area.
Be sure to think about your partners, volunteers, donors, and staff when considering a sponsor. Would this sponsor be interested in having any of these people as clients? If so, you are already on the right track.
If you aren’t sure how to start linking potential sponsors to your organization, we have your back! A mind map is a great place to start. You can do this on paper, or use tools like coggle.
To start your mind map, think about the groups of people we just mentioned, and what they might be interested in, like hobbies and other work that they do. After you have this idea, you can think about what businesses would be interested in selling to these groups of people. This helps you address the company’s need to gain recognition that we mentioned above.
Now, you can consider the CSR side. Try to find the companies that already have a CSR program put into place. To do this, think about the following questions:
What organizations need to show their CSR to gain trust from the community?
Which organizations are based around CSR that try to do as much for their community as possible?
Now that you have an idea, you can take a look at their websites to see their CSR efforts. After you have done this, you can look at the company’s past partnerships to determine if the sponsorship will be the right fit. Companies usually have this stated on their website in the about us section.
Pro Tip: A lot of people will discourage you from reaching out to large businesses because they think it will be too hard to gain funding from them, but it can be quite the contrary! A lot of large corporations need to show their impact on local communities, and they spend a lot of their time trying to find ways to do this. They often also have CSR budgets at the end of the year that they previously didn't spend on other efforts. If you find out who these corporations are in your community, you could create a long term sponsorship that will help your nonprofit for years.
After you have determined who to target, don't forget to optimize your website around this information! This will ensure potential sponsors can find all of the information they need about your organization.
Who Not to Target
We know that cash is king, but believe it or not funding can hurt you if you get it from the wrong sources. Remember, corporate sponsorships are mutually beneficial and you need to ensure that the sponsorship not only looks good for the company but also for your organization.
To do this, you need to be smart about who you reach out to, and ensure that they represent your nonprofit well. For instance: a LGBTQ+ nonprofit should not reach out to Chick-fil-A. This example is a bit extreme, but you should be sure to check the values and goals of your corporate sponsor and make sure that your partnership is more beneficial than harmful.
Be sure to choose a company that has the right CSR strategy for your nonprofit. There are two types of CSR, reactive and proactive. This means either a company is complying with and keeping up with socially accepted standards of CSR (reactive), or thinking ahead about what they can do even further than the standard (proactive).
For example, a restaurant that switches over to paper straws because the local laws are requiring it would be using reactive CSR. A company that invested in paper straws years before the requirement, and also got rid of any other plastic materials, would be proactive.
This is important because you need to look at the CSR efforts of the company you are considering for sponsorship and decide if these match with your organization. If your nonprofit is known for being proactive, you should not choose a sponsor that is only doing the minimum. If you do, your supporters will see this and question your organization’s intentions.
Pro Tip: Watch out for green washing! Green washing is when a company only does the bare minimum, and advertises themselves as a proactive company. To avoid green washing, be sure to do extensive research and consult other websites than their own.
How to Connect with These Businesses
Now that you have an idea of who to target, you can start the process of reaching out to these businesses.
The first thing you should do is to check your network to see who has a connection with the business. You can do this by reaching out to your team, volunteers, and donors to see if they know anyone at the business.
Some businesses have groups of people dedicated to helping the community, so finding a connection should be more simple. If you haven’t found a connection and you want to make one yourself, you could attend events that this business is involved in. If not, you can try giving the business a call, and asking to talk to the manager in charge of community engagement.
We recommend using this as a last resort because establishing a personal connection is much more effective than reaching out to someone that doesn’t know you or your organization.
If you are trying to target large corporations, think close to home. Instead of calling the corporate offices, you should see if there is anyone in your network that works at a branch in your community. If not, you can still call, but we recommend calling the local office instead of the headquarters.
Pro Tip: Although you are a nonprofit organization and not focused around strategy and profits, your potential sponsors will be and it is important to keep this in mind when reaching out to them. Be sure to sell your organization as much as you can, and detail exactly why this sponsorship will help them, and how this will be made possible. Include real data when possible, and even examples of ideas to promote the partnership.
We hope this article has helped you to understand how corporate sponsorship works, and why it is a great option for your nonprofit organization. If you have any questions or use one of these tips, let us know in the comments!
Springly is trusted by over 15,000 nonprofits to help them run their organizations on a daily basis. Try it, test it, love it with a 14-day free trial!