How Nonprofits Can Harness the Potential of Brand Sponsorships

First Republic Bank
June 23, 2022

Corporate sponsorship ⁠— a marketing strategy in which a company pays to be associated with another brand, activity or event ⁠— is widely popular for groups like sports teams and events like music festivals. However, sponsorships are a largely untapped source of support for nonprofits: In the $24 billion industry, only $2.2 billion of that spending is currently going toward cause-related sponsorships. And in the nonprofit sector, only 5% of fundraising revenue comes from sponsorships.

To help fundraising professionals better understand the enormous potential of sponsorships for nonprofits, First Republic invited leaders from IEG ⁠— the leading authority on sponsorship insights, intelligence and trends ⁠— to speak with members of our Fundraisers Alliance. 

The benefits of sponsorship

Sponsorships are designed to be mutually beneficial for both parties. Nonprofits receive a boost in both corporate revenue and visibility from sponsorships. In return, the sponsorship model offers brands an opportunity to: 

Customize a plan.

Different types of sponsorship include different levels of support and promotional considerations. Examples of sponsorship plans include:  

  • Cash sponsorship, in which a brand makes a monetary donation to an organization in exchange for promotional consideration. This is commonly used for special events.
  • In-kind sponsorship, in which a brand offers goods or services of value instead of a monetary donation. Examples include donating an event venue, food or staff volunteer time.
  • Media sponsorship, in which a brand covers the cost for media coverage for a nonprofit event or initiative, such as securing ad space or promoting it via social media. 

Go beyond traditional advertising.

Brands are constantly competing with each other ⁠— on television, online and on store shelves. Sponsorship, especially an exclusive partnership, helps a brand communicate more directly with an audience without the noise of their competitors. Additionally, sponsorship can be more memorable than advertising ⁠— especially as many newer media platforms now allow consumers to skip ads altogether.

Boost brand affinity.

A significant benefit of sponsoring a mission-driven organization is strengthening brand affinity, which occurs when a consumer has positive feelings about a brand they believe shares their values. Peter Laatz, Global Managing Director of IEG, refers to this as a value narrative: “A lot of consumers are not as much a fan of brands as they are of causes. Sponsorship can help a brand tell a unique story that makes people say, ‘That’s a brand that I can get behind because they are supporting a cause that is consistent with my values.’”

Getting buy-in for sponsorships

Since sponsorships present a new kind of partnership model at many organizations, it may be challenging to get internal buy-in. IEG Account Director Megan McGinnis offers tips for how to make the case for sponsorship at your organization: 

  • Conduct competitor research: Find out how similar organizations with sponsorships choose and cultivate sponsors and how much financial support they receive from sponsors. This will help your team understand how much work is needed to find and maintain relationships with potential sponsors ⁠— and how much money sponsorships could bring in.
  • Get executive approval: Having approval from senior leadership can help you better sell the potential for sponsorship to team members.
  • Involve team members early in the process: Before beginning a sponsorship program, bring in staff who will be involved in the program, such as members of your fundraising, marketing and finance teams. “Getting them involved early can help prevent any hiccups once a sponsor is officially on board,” says McGinnis. 

Creating successful partnerships with sponsors

Once you have internal buy-in, your team can focus on securing sponsors. Successful sponsorships are built on strong, trustworthy relationships. Here are some tips from IEG on finding the right partners and cultivating successful relationships with them: 

  • Create purposeful partnerships: Find potential sponsors that share your nonprofit’s values and whose product or service integrates well with your mission. Examples include a restaurant chain sponsoring a food drive for a food bank or a pet supply store sponsoring a pet adoption event for an animal shelter. 
  • Set a price point based on market rates: One of the biggest pain points IEG sees with its clients is that nonprofits often let the sponsor dictate pricing or have trouble articulating the value of their own brand ⁠— which can lead to a lack of confidence in the partnership. Basing pricing on market rates and promotion underlines the value of what your organization can bring to a partnership.
  • Sell solutions: Instead of focusing on specific promotional opportunities ⁠— what Laatz calls assets ⁠— choose those assets based on objectives. At the start of the partnership, go through a discovery phase to assess the goals of the sponsorship, and customize a plan with assets that can help accomplish your shared goals.
  • Find opportunities for storytelling: An example of selling solutions is finding opportunities to illustrate the value narrative. Nonprofits tend to think of advertising assets for sponsorships, such as signage, ads in publications or earned media coverage. If a sponsor's goal is to promote their values, look for opportunities to tell a story, such as speaking slots at events, podcast interviews, blog posts and op-eds. 
  • Assist in measuring ROI: Nonprofits understand the importance of making fiscally responsible investments, and sponsorship is no different. Provide regular reports showing the impact of the partnership. Rather than presenting just facts and figures, focus on the impact of the sponsorship ⁠— for example, showing the broader meaning of, or change resulting from, the partnership. 

Learn more about nonprofit sponsorships

For more insights on how to find sponsors, create successful activations and build internal capacity to manage effective sponsorships, watch the replay of IEG’s full presentation.

If you're interested in attending more sessions like this one, we welcome you to learn more about First Republic’s Fundraisers Alliance: a complimentary educational networking group for nonprofit professionals to deepen fundraising skills, share best practices, and learn from peers and best-in-class subject matter experts. First Republic is proud to organize the Fundraisers Alliance as part of our commitment to mission-driven financial services.''

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