Sponsorship Is Not Philanthropy (And Why This Mindset Costs You Sponsorship Deals)
Unless you’re brand new to the blog (and in which case, welcome!) or the Sponsorship Collective, I’m sure you’ve heard me say it at least once. If not, here it is.
Sponsorship is not philanthropy.
Yes, just as the title says, sponsorship is not philanthropy. Many sponsorship seekers in the charity and nonprofit spheres treat it like it is, which is one of the biggest sponsorship mistakes you can make, in my opinion.
I’ve always said that, but today, I want to expound on exactly why the philanthropy mindset can come back to bite nonprofit sponsorship seekers and how to begin approaching sponsorship like the marketing discipline it is.
5 Reasons Why It’s a Dangerous Mindset to Assume Sponsorship Is Philanthropy
Philanthropy is king in the nonprofit and charitable sectors. You regularly rely on donors with deep pockets to fund your operations so you can continue doing good in the world.
Many charitable sponsorship seekers I’ve spoken to and worked with personally were thrust into that position without any prior experience. If that’s your story too, it’s easy to continue doing what you’ve always done because it’s worked.
However, it will not continue to work as you seek a sponsor, and here are five very eye-opening reasons why that is.
You’re Too Cause-Focused
I’ve worked with enough charities and nonprofits to know that their cause is the primary way of selling donors. You paint a long, detailed story of what you do to create a sense of transparency. This tells donors where the money goes when they give it to your organization.
That information might inspire them to give more than they were originally thinking or possibly to become a repeat donor.
Then you lay it on thick with a sponsor in the hopes that they’ll open their wallets just as readily. And this is mistake number one.
Your cause will never sell a sponsor. That’s not a challenge to create a more compelling cause; it’s simply a fact.
The reason is that your cause has very little to do with it at the end of the day. Sponsors are marketers. They’re interested in increasing customers, converting leads, and selling more. A cause rarely achieves those outcomes on its own.
For example, let’s say your nonprofit is involved with children’s cancer charities. That’s a great cause, but that simple fact alone won’t do much for a sponsor if they partner with you.
They’ll generate some positive press, which can increase brand awareness. However, sponsors are very rarely after brand awareness, especially if you work with more established companies.
Positive press won’t increase website or social media traffic, opt-ins, lead gen, conversions, or sales. Marketing outcomes do that.
If you can find a way to connect your cause to a marketing outcome, then you can be cause-focused. However, all the charity and nonprofit sponsorship seekers I’ve worked with have had the most success by setting their cause aside.
I know that feels strange to do, but go with it. It will be transformative for your sponsorship goals.
You Assume Sponsors Will Just Give You Something
The other problem with approaching sponsorship from a philanthropic mindset is you go into the deal assuming a sponsor will give you something because your donors have done the same.
Maybe it’s in-kind gifts or cash, but you’re expecting something.
Now, let me make one point clear. Sponsors are supposed to give you something. However, you’re supposed to do the same in exchange, and that’s where charitable and nonprofit sponsorship seekers can get tripped up.
No, your cause won’t work here. Your cause isn’t something to give to a sponsor, and we already talked about how it won’t drive the outcomes they’re looking for anyway.
What can you give a sponsor? That’s up to you to decide. What a sponsor wants will vary based on industry, niche, and goals, but I’ll tell you some things sponsors look for.
They want tangible ways to drive more leads, such as social media promotions. They want to expand their audience and increase their sales, like through free samples as part of an activation at your next charity gala.
When you treat sponsorship as an extension of your philanthropic goals, you can regard your sponsor as little more than an ATM machine. Sponsors can tell when sponsorship seekers are in it for the money and have little value to offer in return, so they’ll often end up ghosting you.
And You’ll Accept Whatever They Have to Give Because You Don’t Know Your Value
A byproduct of the philanthropic mindset when pursuing sponsorship is severely undercutting what you could earn because you have no idea what your value is.
All sponsorship properties have value, even those in the charitable/nonprofit spheres. In fact, I’d say especially those in the charitable/nonprofit spheres.
However, a sponsor will never tell you what your value is. They’ll ask for your value because they’re curious how you calculated it, but you have to know it.
Many sponsorship seekers don’t, which is a recurring problem I’ve seen across many industries. Instead, they’ll copy someone else’s that they see online or guess at their own value. When you’re clueless about what your sponsorship opportunities worth, you can’t ask for a fair price.
You Might Not Really Get What You Need
Nonprofit and charitable organizations can get so sidetracked by getting something from a sponsor that they don’t really stop to ask whether it’s what they need.
For example, if a sponsor gives you in-kind gifts like pens or branded T-shirts, what do these items achieve? At most, you’re getting brand awareness, which you might not need if you have healthy attendance at your gala.
Here’s another example that breaks it down more simply. You don’t bother valuating your assets and activations before pursuing a sponsor. As a result, you asked for $20,000, but you really could have used $40,000.
You’re about $20K short, which means cutting corners and canceling parts of your gala or event. Your attendees are disappointed, and your sponsor underwhelmed. Your event underperforms, and your sponsor does not want to work with you again.
You Won’t Retain Sponsors
Yet another substantial risk of treating sponsorship like philanthropy is a lack of sponsorship retention. It’s so much easier to keep a sponsor than to find a new one. However, working together once is not a guarantee that it will happen again.
A sponsor only signs on for an extended deal when they’re pleased with the service they received. Delivering most of the outcomes you promised to the sponsor will pique a sponsor’s interest in working together again.
That, and asking at the right time. You must be willing to strike a deal with a sponsor as your current gala or event wraps up. Sponsors only have so much time, availability, and money to spend, so waiting too long can ensure you end up with none of it.
Shifting the Mindset to Marketing – 6 Tips for Nonprofit and Charitable Sponsorship Seekers
Have you made some of the above mistakes when pursuing sponsorship as a charity or nonprofit? Focusing on the same goals and outcomes of your sponsor–namely, marketing–will lead to more conversations, meetings, and hopefully, sponsorship arrangements.
Here are some tips to get you started.
1. You Must Know Your Audience
I’ve seen sponsorship seekers in the charity and nonprofit spheres assume that audience data is secondary for them because they don’t have traditional customers. True as that second half may be, you must still have audience research.
Your audience includes your donors and event attendees. These people allow your charitable organization to operate, so you must know as much about them as possible.
How much do I recommend you know? You should have at least 25 datapoints on each audience group. And yes, you will want a lot of groups!
You must divide your audience by demographics, geographics, and psychographics. Splitting them by all those datapoints will lead to small but highly-targeted niches your sponsor will be very interested in seeing.
2. Don’t Skip Discovery
How do sponsorship seekers find the right solutions to a sponsor’s problems? It all happens during the discovery meeting.
The discovery meeting is an introductory sit-down or phone call with a sponsor where you ask them questions about their goals and challenges. It’s your best opportunity for learning about what makes your sponsor tick, as you’re not going to find this kind of information by reading old news clips.
Once you have this information, you’ll find it far more expedient to create a tailored, targeted sponsorship property just for your sponsor.
Your goal once you contact your prospect should be to schedule the discovery session. If you’re direct and can get the meeting scheduled in one phone call or email, that’s best.
Many sponsorship seekers turn the discovery session into a sales meeting. That’s less in your DNA as you’re involved in nonprofits or charities, but I must still caution you against doing it. You will have opportunities to sell your sponsorship property, but now is not one of them.
3. Ixnay on the Cause
Yes, I had to bring this point up again just to remind you that sponsorship is about marketing, not your cause.
Does that mean you must remain tight-lipped on your cause? No, not at all, but know when to bring it up and how much share of the spotlight to give it.
For example, let’s say your prospect asks you to put together a sponsorship proposal. This isn’t a 10-page ode to your cause. Instead, you should write several sentences about your cause, tops.
The bulk of a proposal should delve into audience data, and another good chunk should be spent on case studies. This kind of data inspires sponsorship deals to move forward, not discussing your cause to death.
4. Valuate Your Sponsorship Opportunity
Remember, you’re in charge of determining the value of your sponsorship opportunity. That only happens through valuation.
Valuating your assets and activations is comparing yours against market value. If you have 50 assets, you must research them all.
Determining market value doesn’t mean you automatically write in that many zeroes beside your own assets and activations. Instead, you use market value as your benchmark.
Your assets may be worth more than market value, or perhaps they’re less. If you need help, we’re valuation experts here at the Sponsorship Collective. You can get on a call with me today.
Sponsors will want to know where your numbers come from, so save your math and be ready to show your work.
5. Skip the Gold, Silver, and Bronze Tiers
Unfortunately, the prevalence of gold, silver, and bronze-tired sponsorship is higher in the nonprofit and charitable sectors than in for-profit companies. That’s not to say the latter party uses these tiers just as egregiously, as they absolutely do.
Tell me if this is something you’ve done. You guess at your assets or do a basic valuation. Then you stuff the best assets into a gold tier to entice a sponsor. The rest of your assets go into the silver and bronze tiers because they’re not as important.
Sponsors hate gold, silver, and bronze tiers for a myriad of reasons. It’s old-hat sponsorship and way outdated compared to how companies arrange sponsorships today.
More so, sponsors understand you’re taking them for a ride. You either peppered in a few good assets into the gold tier to motivate the sponsor to purchase at that level or intentionally put what they want at the gold tier to extract the most money.
A sponsor doesn’t want to be told they’re getting X, Y, and Z assets. They want to collaborate with you and cocreate A, B, and C assets.
That means creating a custom sponsorship package, which will require more time and effort than you might originally anticipate. However, the results are worthwhile.
Custom packages speak to the unique needs of your sponsor. More so, you will usually end up making more money from your sponsorship deal than if you pigeonholed assets into gold, silver, and bronze tiers.
How can that be, especially when you have premium pricing on your gold assets? It’s simple. Sponsors are willing to pay more for something valuable, which tiered assets rarely are. Custom assets are of much higher value, and you’ll have the numbers to prove it!
6. Produce a Fulfillment Report
The fulfillment report is the first step to sponsorship renewal.
This report is your good-faith effort to showcase all you achieved for the sponsor, just as you promised. You should include audience data, attendance information, photos of the event, and a timeline of sponsor deliverables.
Sponsors want ROI, and that’s exactly what a fulfillment report proves. It’s pages upon pages of value the sponsor can refer back to. You also make a strong case for becoming a repeat partner if you had a good showing.
Sponsorship is marketing, not philanthropy. Nonprofits and charities entering the sponsorship world often struggle to let go of old habits, such as treating sponsors like donors and asking for money upfront.
It takes retooling your sponsorship process, but it’s possible! I’ve worked with many sponsorship seekers in the nonprofit and charity sectors who didn’t have a lick of sponsorship experience and later became successful sponsorship sellers with the Sponsorship Accelerator.
Click here to explore the Sponsorship Accelerator and see if it suits your sponsorship needs.
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.