Fundraising Standoff: Sponsorship vs Individual Giving
This post is meant as a primer for major gift fundraisers who find themselves involved in sponsorship and asking themselves how to get sponsors. That said, I think this will also be useful to the full service fundraising professional as well as the Executive Director who is occasionally asked to join in sponsorship meetings or who has been asked to build a sponsorship proposal.
Let’s take a look at the differences between major individual giving and sponsorship (often erroneously referred to as corporate philanthropy). I have done both types of giving and am approached regularly by people asking to help their boards, CEOs and staff understand the difference between the two types of fundraising, so let’s dive in!
Individual Giving vs Sponsorship
Let’s start with the difference in motivation between the two camps. I will be speaking in general terms here but it’s important to note that the only rule of thumb is that…there are no rules of thumb! There are always exceptions to the rules but by and large, my experience is that the following is true 90% of the time:
Motivations of the Major Donor
Individuals typically measure the impact of their gift by, well, impact. If an individual lost a relative to an illness and they want to make a donation then they look for social return on their investment. Perhaps the gift is therapeutic, or to cure a disease, or provide a social outcome that they believe in. You the fundraiser are their partner in helping them realize a vision of change within their community or area of interest.
Motivations of the “Corporate Donor”
Some individuals will indeed make gifts through their companies or through their corporate foundations but I would argue that these are not corporate gifts, but individual gifts. You steward these gifts as individuals, ask an individual and report back to an individual. So let’s leave that type of fundraising aside and focus on the cause-marketing umbrella, at its heart a marketing spend.
Companies exist to make a profit and shareholders invest in companies for a return on that investment. When a company engages a charity, it is seldom framed in this context overtly by the prospect but branding, community engagement, product placement and employee engagement are all desirable to the corporation because they lead to a healthier bottom line in some way. This comes in all shapes and sizes and could be through more engaged staff, brand recognition, product sales or an increase in market share or overall market size.
Pretty simple stuff and nothing groundbreaking here, I know. The impact that this not so subtle difference has on how someone approaches a prospect is tremendous.
Fundraising Prospects: Individual vs Corporate
When I am seeking a major gift, I want to speak to a high net worth individual (and the definition of high net worth depends on my gift goals). I research who they have given to, their net worth, their salary and which influencers I am connected to who can make the introduction. When I talk to them, I ask them about their giving interests and talk about how my projects can help them achieve their philanthropic goals. I am asking them to give me their own personal money and to trust that I will solve a social problem for/with them.
I would never, ever, lead with where I can put their name, how many e-mail addresses I can collect for them, how many free gala passes they will get and how many branded tweets I will send out for them. The idea of approaching a major donor this way is totally ludicrous but we often approach corporate prospects through a major gift lens.
When I am looking to sell sponsorship, run a point of purchase campaign or product placement opportunities I look for people in the marketing, business development, brand and communications departments. When I want to build an employee engagement campaign or community outreach strategy I look for HR people or CSR staff.
In other words, I am asking people to invest their company’s cause marketing money, not their own. I talk to them about their business goals and how I can help them be more profitable but also how I can help that particular professional meet the goals that they are being measured on (product sales, market share etc.). The only time I am asked about the impact my charity is having on the world in these types of meetings is when it is in the context of their market research. That is, their key demographic (customer, employee, investor etc.) cares about a particular cause and so the company wants to be seen supporting that cause. Just like I would never tell the individual giver about branding opportunities, I would never ask a Brand Director for them to give me a cheque to help my program user for nothing more than the positive impact it will have on society.
How to Know When to Talk Gift vs Sponsorship Proposal
You should expect to shift into philanthropy mode when the following happens:
- You meet in a prospect’s home with their family (though many major donors meet in their offices as well)
- They share deep personal stories with you
- When you tell stories about the people/animals/environment that you help they ask to hear more
- They ask about the social impact of their donation and never move on to how you can help their company
You should shift into cause marketing mode when the following happens:
- You are meeting with someone who has any of the following in their title: brand, communications, human resources, CSR (though CSR folks often act like grant givers so this one could go either way!) or who is from a third party marketing or communications company representing a prospect
- They ask you about your mission and them immediately start to ask you about your database, events, stakeholders, market research etc.
- They talk about products, market research, proposals and corporate volunteering
How to Get Sponsors: A Meeting Roadmap
My advice to people who are heading in to talk about sponsorship, cause marketing or corporate fundraising in general is to go to the meeting empty handed! Don’t bring a proposal, don’t bring a sponsorship package, don’t bring a leave behind and definitely do NOT bring your case for support!
Go to the meeting with the sole purpose of asking questions and getting the second meeting to present a customized proposal to the decision makers if you and the prospect agree that there could be a fit.
When you go to a sponsorship meeting, be prepared to answer questions about sponsorship opportunities, volunteer opportunities, key events, the size of your database, who your brand appeals to (if you’ve done the market research, otherwise…don’t guess) and whether or not you have the capacity to deliver on their campaign ideas.
When the opportunity comes for you to speak, be sure to end every sentence with a question mark. The following is a good starting point to ask a corporate prospect:
- Who is your target audience?
- How do you like to engage and market to your customers?
- What does your target market value?
- What can you tell me about your marketing and sales goals for the coming year?
- What would you consider to be the most important elements of a partnership between our two organizations?
The goal of the first meeting is never to close the deal, though it is wonderful when that happens! The goal of the first meeting is to gather information to build a customized proposal and to get the second meeting.
Tracking, Reporting and Measuring Impact in Fundraising
When I report back to major donors, I focus on whether or not we met the mission goals of the project, stayed true to budget and reached the number of people/animals/projects we said we would. I prepare stories and samples of impact, I do site tours and project visits and I bring board members and program users to come to thank the donor and show them how they are making a difference.
When I report back to a corporate entity, I talk about website traffic, product distribution, speaking opportunities, employee volunteer numbers, press pickup and media hits. I create a formal fulfillment package complete with photos, web hits, attendee reports and everything I can to prove that my sponsor got the value I promised them.
If you are a seasoned fundraiser then you already have much of the experience needed to be working with corporate prospects! As you can see by this post, there are some subtleties and differences between the two types of giving and, while the creation of a sponsorship package and valuation requires some technical expertise, you can certainly do well in the first and second meeting by changing your approach slightly based on the principles in this post.
This post was first published by the good folks at AFP Toronto
Chris Baylis is an expert in sponsorship valuation and sponsorship strategy. Chris works with brands and sponsorship properties to define their sponsorship goals, determine market value of their sponsorship assets and create strategies that work. Chris is the President and CEO of The Sponsorship Collective and an international speaker and consultant on all things sponsorship marketing.
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