In order to run a successful nonprofit organization, you must have money to pay for your activities and offset operating expenses. While cultivating your donor base is instrumental in becoming financially viable, don’t overlook the benefits of attracting corporate sponsors to support your activities and events.
What is Corporate Sponsorship?
Corporate sponsorship is an arrangement between a for-profit business and a nonprofit organization in which the business makes a payment to support the nonprofit’s activities in exchange for some sort of recognition.
Nonprofits need to avoid a situation in which the value of the recognition provided outweighs the payment made to the nonprofit as there can be significant tax implications for nonprofits that provide more value to the for-profit business than they receive in financial support.
Understanding Corporate Motivation
Before you begin soliciting corporate sponsorships, it’s important to know why private businesses are interested in sponsoring nonprofits in the first place. The reasoning varies from company to company, but businesses typically sponsor for three reasons: building their brand perception, attracting new customers, and giving back to their community.
Attracting Corporate Sponsors
It’s up to you to find and convince businesses to sponsor your nonprofit—they won’t do it themselves!
Step 1: Develop a target list
Narrow down the list of potential partners before reaching out. First, determine whether a business is in alignment with your organization’s mission or event purpose. For example, if you are seeking corporate sponsors for an animal welfare nonprofit, you should focus more on pet supply stores than fast-food chains. Be sure to leverage any personal relations you, your staff, and your board of directors have with local businesses, and take note of any businesses that sponsor most events or nonprofits in your area.
Step 2: Create clear deliverables
As mentioned earlier, not all corporate sponsors are partnering with nonprofits solely to give back to their community. Develop a strong and specific list of benefits corporate sponsors will receive in exchange for partnering with you, such as prominently displaying their logo or verbally mentioning them during the event. Consider offering multiple sponsor tiers so businesses with smaller budgets can participate.
Step 3: Follow through on your promises
Once you’ve entered into partnerships with corporate sponsors, you must deliver on your side of the agreement. If you don’t, you may lose that sponsor forever, and they may spread the word to others in the community about your lack of follow-through. Thank corporate sponsors for their support and gather their feedback to help yourself improve. If possible, provide metrics, such as attendee numbers, that show the positive return on investment they received for their participation.
Mastering the art of attracting corporate sponsorship is a worthwhile use of your limited time and resources. The long-term financial benefits are tremendous, and the relationships you create will be invaluable to the future success of your nonprofit.