Raising Money From Corporations: Sponsorships vs. Contributions

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    I work for a non-profit membership society as advertising and marketing manager, a position that falls under the umbrella of the development office. I am responsible for the advertising in our member publications and on our web site, and for selling sponsorships to local and national corporations.

    I am having a difficult time separating out the difference between monies earned from selling sponsorships to a corporation and soliciting donations from them.

    Should the two be recognized publicly as the same – such that all companies that sponsor and/or donate be grouped as Donors, or should there be a distinction between the two?

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    The significant/functional difference between income from sales of sponsorships to corporations and contributions from corporations is that corporate expectations are different for both.

    When a corporation buys a sponsorship, they expect specific visibility and recognition for the corporation and/or its leadership. In essence, selling a sponsorship is a contract between the NPO and the corporation — the corp. is buying what you told them they’d get for their sponsorship money.

    If it’s an event, then there should be appropriate signage and/or visibility for the corporation on the event invitation and/or program.

    Also keep in mind that the visibility you give to them, and to other sponsors, is part of how you are preparing for the next time you ask them to buy a sponsorship. It’s a case of “see what other corps got for being sponsors; you could get the same next time !!”

    Sponsorships buy visibility and credibility and, therefore, help the corporations sell more of what they produce. Contributions from corporations “show” that they are “good members of the community” and suggest that community members should, therefore, “embrace” them and give them their “loyalty.” Corporations do give to support their communities, and to support the NPOs that provide services to their employees.

    Corporate board members and executives also like to be recognized for their contributions, and they usually want to know beforehand what recognition they’ll get — a program listing, a listing in your annual report, a photo op — corp. exec presenting the check to your NPO’s ED or Board Chair.

    Sponsorships and Contributions should never be “grouped” together, not only because they are obtained through different “processes” and come with different expectations, but also because they are perceived (by the corporations and your constituents) differently.

    Bottom line, development is (at heart) marketing. It’s relationship building and enhancing — often on a one-to-one basis. It’s getting the prospect to want to do what it is that you want him/her to do — i.e., buying a sponsorship and/or making a contribution.

    So, when it comes to corporations, the key to raising money is to first determine what their needs are — the needs of the corp. and the needs of the execs, then approach them with a plan (including either or both sponsorships and contributions) that will satisfy those needs.

    Corporations that are buying sponsorships are not making donations. They are buying, not giving. Your record keeping (keeping the two income streams separate) will help you track which works best with which corporations. But, no matter which part of the corporate budget the monies come, the idea is that (for the most part) the sponsorship and/or the contribution will increase the corporate bottom line.

    While I do not discount the many gifts to nonprofits from corporations that (really) want to support their communities, the basic approach to corporations must be with the consideration of how their bottom line will be impacted.

    Of course all income goes to support the mission, but income of various types must be reported to the IRS in different categories. If you’re not familiar with IRS form 990, ask your organization’s leadership for a copy of a recent filing. If you wade through all the details, there will be some info that will address your questions.

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    Have a comment or a question about starting, evaluating or expanding your fundraising program? With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, I’ll be pleased to answer your questions. Contact me at AskHank@Major-Capital-Giving.com
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    Have you seen The Fundraising Series of ebooks ??
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