How to Start a Sponsorship Program for Your Nonprofit
Many non-profits enter into the sponsorship space without much strategy and often as an afterthought. This approach leads to quick cash now but major problems later. When starting a sponsorship program, it is essential to follow this process to maximize revenue but also avoid major headaches down the road.
How to Start a Sponsorship Program, In a Nutshell
The following is the process that every nonprofit should follow in order to be successful in sponsorship. Most nonprofits simply throw together a sponsorship package focused on the good works of their organization and send it to corporations, hoping for some money in return.
There is a better way to bring in corporate revenue. Here is what we are going to cover in this article:
- Sponsorship vs philanthropy
- Why companies sponsor nonprofits
- Sponsorship is all about audience, not mission
- Define your audience
- Know what you have to sell
- In-kind or cash?
- Focus on experience, not logos
- Build a sponsorship package
- Get your board on board
- Know your value
Let’s look at each step in more detail to help you build a winning sponsorship program.
Sponsorship vs Philanthropy
In some cases, companies support nonprofits through corporate foundations and some companies and nonprofits share common goals. This is what we would describe as corporate philanthropy and it does not apply to sponsorship. Far too often, nonprofits use the word “sponsorship” as a synonym for “corporate philanthropy.” As you build your sponsorship program, it is essential that you think of corporate philanthropy and sponsorship as completely different disciplines. Sponsorship is a marketing discipline and must be treated as such in order to be successful.
Why Companies Sponsor Nonprofits
It is important to understand why companies sponsors nonprofits. What does a sponsor stand to gain if they are not engaging in sponsorship for philanthropic purposes?
Any of these benefits could be part of a company’s motivation:
- Attracting new customers
- Retaining existing customers
- Standing out from the crowd over competitors
- Getting foot traffic to a retail outlet
- Driving digital traffic
- Increasing brand awareness and educating prospects about their products or services
- Entertaining existing clients
- Lead generation
- Recruiting and retaining employees
- To reach a wider audience
- Collecting email addresses
- Content marketing and presenting themselves as thought leaders in the industry
Sponsorship Is All About Audience, Not Mission
Sponsorship is not about logo placement, it’s about audience! Sponsorship is a method that companies use to connect with their target market in meaningful ways and not just a group of benefits that come with the “silver level” in a sponsorship package.
Most nonprofits fill their sponsorship packages with mission, vision, history, values and images of those they serve. This is a common approach and shows the sponsor that you are focused on philanthropy, not marketing and definitely not audience.
Who is your audience? Your event attendees, social media followers, donors, volunteers and website visitors. Your audience is rarely your program users.
Define Your Audience
Defining your audience as “donors” or “people who care about our cause” or “middle class families” is not a well-defined audience! You need to develop a full picture of your audience in order to determine whether or not that audience lines up with that of your potential sponsors.
Some of the things that sponsors are looking for includes:
- Demographic information
- Household income
- Job titles
- Preferred social media
- Commonly consumed brands
- Coming purchases
- Stage of life
- Geographic distribution
We recommend at least 25 data points on each audience segment.
Know What You Have to Sell
The best advice that I can offer nonprofits is to let go of the idea that a company is going to sponsor your organization by simply giving you money in exchange for a logo on your website. Presenting your organization as a “sponsorship worthy” opportunity is a recipe for failure.
Instead, you should focus on identifying your sponsorship opportunities, usually called “sponsorship properties”. Some examples of sponsorship properties common to nonprofits include:
- Peer to Peer fundraising events
- Naming rights
- Golf tournaments
- Networking events
- Naming rights for a physical building, room or an event
- Naming rights of a program
- Concert series, a production in a theatre
- VIP events and donor recognition functions
- Skilled volunteer training events
Once you know what properties you offer, go through each and outline the different audience segments for each property.
In Kind or Cash?
A common mistake that many nonprofits make is confusing sponsorship with “getting free stuff.” Free stuff is fine, if that is part of your revenue strategy, but make the decision strategically at the beginning of your sponsorship program.
Would you rather get free wine for your events or, instead, reach out to a company who wants to connect with your audience and give them the opportunity to connect with that audience by providing a unique VIP experience, one that includes wine?
In the old school method, the nonprofit would take the free wine and save a few hundred dollars. In the new method, the nonprofit would build an activation that includes wine, have the sponsor cover the cost of wine and pay the rights fees on top of that. In option two, you save the costs of the wine plus put a few thousand dollars in your pocket.
Cash is king, I know which one I would choose!
Focus on Experience, Not Logos
Easily the worst way to engage in sponsorship is ask a company for money in order to put a logo on a sign at the entrance to the event. Sponsors hate it, audiences hate it and you should hate it (because it cheapens your event and means that you are leaving money on the table). Instead, focus on providing value to your audience. We all talk about win win and providing ROI to the sponsors, but I think this is the wrong approach. The only group you should be worried about providing value to is your audience, and you should use sponsorship to do it.
How to Uncover Activation Opportunities:
Identify an audience niche or specific target market
Ask your audience:
- What about their experience is positive?
- What did they not enjoy?
- What do they want more of? Less of?
- Why are they involved with your property?
Brainstorm ideas that improve audience experience based on that feedback
It’s more work than simply slapping logos on stuff but when you create sponsorship opportunities using this approach, everybody wins.
Build a Sponsorship Package
When you create your sponsorship package, throw out everything you think you know. Don’t look at your competitors to copy what they are doing, don’t create a package with levels, don’t use the sponsorship package to make the sale. Instead, build a sponsorship package with these principles:
- Focus on audience!
- Do not include charts, grids, levels or prices
- Include case studies and examples of your work with sponsors
- Offers the types of things sponsors can do to reach their audience
- Drive your prospects to arrange a meeting with you to discuss options
- Offer to customize something for every prospect
Use the 50% Rule! That is, no less than 50% of your sponsorship deck should be focused on audience data. If you only have one page of audience data, then you can only have a two-page sponsorship proposal.
Get Your Board Involved
The first step in getting your board of directors involved is to educate them on this new approach to sponsorship sales. Define their role and how they can help…and what you don’t want them to do.
You want your board to…
- Make introductions to their network
- Identify companies who are interested in your audience
- Host networking events on your behalf
- Attend a sponsor summit
Here is what you do not want your board to do…
- Send out sponsorship packages
- Make the sale on your behalf
- Tell you how to sell sponsorship
Your board of directors will be much happier in a role where they are helping you connect with their network vs being asked to send out “gold, Silver, Bronze” packages and force their colleagues to buy things that offer little to no ROI.
Know Your Value
Last but not least, you have to know the market value of what you have to offer. Every single asset you have to offer has an independent, verifiable market value. Before you take your opportunities to market, it is essential that you spend the time to assign a value to your assets, including:
- Logo placement
- Speaking opportunities
- Sampling rights
- Media exposure
- Social media posts
- Mentions from the mic
- Database marketing
The list of assets is endless and you should have dozens, maybe even 100+, assets to choose form. If valuation is where you find yourself struggling, then be sure to check out my blog post The Essential Guide To Sponsorship Valuation: Learn How To Price Sponsorships Like A Pro
Sponsorship is often misunderstood but when practiced properly and implemented in the way outlined here, it can be rewarding and lucrative for your nonprofit.
ABOUT THE AUTHOR
Chris Baylis is the President and CEO of The Sponsorship Collective and a self-confessed sponsorship geek.
After several years as a sponsor (that’s right, the one investing the money!) Chris decided to cross over to the sponsorship sales side where he has personally closed tens of millions of dollars in sponsorship deals. Chris has been on the front lines of multi-million dollar sponsorship agreements and has built and coached teams to do the same.
Chris now spends his time working with clients to value their assets and build strategies that drive sales. An accomplished speaker and international consultant, Chris has helped his clients raise millions in sponsorship dollars.