SPONSORSHIP 101: Growing Nonprofit Revenues
(Part One of a Two-Part Series)
By: Melissa Lagowski
CEO, Founder and Queen Bee, Big Buzz Idea Group
Be it donors or dinners or annual bake sales, nonprofit organizations live and die by their budgets and funding streams. Finding a steady revenue stream may seem difficult but it also might just be hidden in plain sight: look around to discover that opportunities exist to develop a sponsorship program that can play mightily into your success.
Established nonprofits already have an underlying support system in their board of directors, staff members, social media followers, donors, etc., who believe in the cause. This network brings obvious value to the organization and can become a valuable resource in advocating for the cause when it comes to creating, researching and soliciting a sponsorship program. With the right outreach to the right people, a bit of brand awareness can turn into consistent revenue in the form of sponsorships.
Corporate Partnerships Overview
Sponsorship development begins with simple math: your NPO needs supportive funding, so seeking a corporate partner with similar interests is a good place to start. While a charitable NPO can attract funding through philanthropic donors, your organization can also create an additional revenue source by attracting sponsors to support the cause – or perhaps help underwrite a single annual event – in exchange for a package of assets, promotional rights or deliverable benefits.
It is this transaction – this “purchase” of rights or deliverables – that becomes a sponsorship. The organization owns the rights or deliverables and sells those deliverables to the sponsor.
A sponsorship package of costs/benefits should be reasonable and justifiable. You need to offer a package that provides value since the potential sponsor needs to justify expenses and the value associated with those expenses. If you can document a clear case why a corporation should support your organization, they will have an easier time taking it up the chain of command for approval. Better yet, if you follow up with an annual (or post-event) sponsor report that shows how the partnership benefitted them, you are more likely to secure a renewal or identify a growth opportunity with a sponsor.
It is important to realize that companies generally have one of two goals in mind when they are considering sponsorships:
- Large companies generally want to connect with brands that mirror their own values. They want to show brand consistency by supporting events or organizations that are tied to their own mission or that attract their ideal customer. A good example of this is when a company such as US Foods focuses their charitable giving around hunger relief and culinary education for underprivileged youth.
- Smaller companies are generally trying to market their brand more directly to the people tied to a particular cause or event.
As you embark on the sponsorship journey, it is important to be realistic about your expectations so that you can create the right sponsorship plan.
Most nonprofits and associations should start locally and then work up the ladder to larger companies as the program strengthens. It is easier to think about who your Board members know, or who in your community is already passionate about your cause. Targeting local contacts and explaining why the work of your nonprofit matters in the community you serve can be very successful.
A big challenge these days is the number of NPOs vying for available funds. The competition is fierce so you need to know your angle and be clear why a targeted sponsor is an ideal fit for your organization.
Outlining Sponsorship Opportunities
Depending on your structure or calendar, there are a variety of options for designing corporate sponsorship opportunities. One could create year-long partnership options or event-specific sponsorships because some companies may want to engage with the organization on a year-round basis, while other sponsors prefer to engage with a particular event audience.
If your organization hosts multiple events, it opens up additional sponsorship opportunities because each event offers different attendees, different geographic locations and different types of engagements and opportunities. This provides a meaningful conversation with a sponsor to identify which event would best meet their goals.
- Are they looking to connect with members and corporate partners?
- Are they looking to connect with the largest number of members possible?
- Are they looking to connect with members in a specific geographical region?
- Are they looking for an opportunity to speak and share their expertise?
- Do they have budget limitations for supporting the organization year-round?
All of these questions help us drill down and match a sponsor to the opportunity, which helps your NPO and the sponsor find success and potentially develop a long-standing partnership.
But the very first step is making a list of possible opportunities. You need to know your target audience and have a variety of different sized opportunities on your list. It is okay to get someone in at a lower level and invite them to grow with your organization over time.
Inventory Your Assets
Launching a sponsorship program takes a bit of time and effort, but once created, it can be very beneficial for a nonprofit. The first step is to inventory the assets of your organization. What do you have that might be valuable to a sponsor?
- Attendance numbers
- Email reach
- Social media reach
- Quality attendees that match ideally with sponsor target or might be power players
- Public relations exposure
- Time at the microphone in front of the target audience
- Website inclusion
- Community signage
- Ability to promote sponsor in a way not otherwise available
For example, your website or monthly newsletter would be an obvious vehicle to advertise a sponsor. If you can include a corporate logo on your website, your sponsor receives value from this partnership each time someone visits your website.
What about naming rights to your annual gala or fundraiser? How about “selling” the silent auction table, or a community service award with a presenting sponsor name attached to it? What about a speaking opportunity at your conference, or maybe a VIP table at the gala? Do you distribute or sell an item where a sponsor logo can be added?
These examples are all sellable assets. These are all deliverable components that your organization owns which can be leased or sold to a corporate sponsor, be it a year-round partnership or an event-specific sponsorship. Get creative and you’ll discover a sellable asset in every nook and cranny, be it a newsletter, billboard, event program, social media messaging, signage, front porch swing, t-shirt or promotional item in a swag bag or an etched brick paver…Look around and you’ll see corporate sponsorship opportunities exist everywhere.
Stay tuned for next month’s newsletter when we will talk more about packaging your benefits and other best practices to maximize sponsorship success.