Evaluating Corporate Sponsorship
Can Helping with a Community Event Help Your Small Business?
With so many worthy causes and special events soliciting donations, you need to be careful in choosing your sponsorships.
Before you jump into a corporate sponsorship, be sure to evaluate the pros and cons of becoming involved with the organization or event. Sponsorship is the donation of money, products, and/or services by a company to a specific charitable organization.
This mutually beneficial arrangement enables the charitable organization to improve the quality of its event or services, while at the same time provides the sponsor with product exposure, name recognition, public goodwill, tax deductions, and a public endorsement of values for which the company stands. The main goal of sponsorship is promoting public relations, not directly increasing product sales.
Special Event
Sponsorships can be divided into two categories: special event and cause-related. Special event sponsorship, especially for sports and charities, increases retail tie-ins and co-op advertising opportunities. The best option for regional marketing of small businesses, special event sponsorships often bring recognition and awards to the sponsor. Small local businesses might sponsor a bowling league by providing T-shirts or an independent bookstore can sponsor a book sale or speaker’s appearance in conjunction with a literary event (with a portion of profits going to the organization). Major corporations, such as General Motors, which sponsored the television series Survivor for six years or Home Depot, which sponsored an episode on bathroom construction for the show, gained maximum exposure by hooking up with one of the most popular television shows in America.
Cause-related
Cause-related sponsorships tend to be riskier and more expensive. Companies speak out on controversial issues, literally putting their money where their mouth is. The television show American Idol sponsored “Idol Gives Back” in which the show raised millions of dollars for poor children in Africa and in American communities. In the past, Reebok International donated $10 million to “Human Rights Now!” and Johnson and Johnson's Personal Products Company spent $1 million on a campaign to educate the public about domestic violence. All of these examples are cause-related sponsorships that cost large amounts of money. Smaller cause-related sponsorships might involve a local business supplying materials to a homeless shelter or adopting a busy road or polluted beach (and displaying a banner or sign that announces this) where employees pick up trash once a month.
Points to Consider
Before committing to a special events or cause-related sponsorship, ask yourself:
- What is my primary reason for sponsorship?
- Whom do I want to reach?
- Is my purpose to expand into a new market or saturate an existing market?
- What message am I sending out about my company?
- How much money (or products/services) will I donate?
- What is my competition doing?
- Will my sponsorship include products, services, and on-site personnel?
Ideally the sponsorship will offer your company or product exposure to new markets, publicly endorse values for which your company stands, and generate goodwill in the marketplace. However, it may be difficult to track direct results of a sponsorship and you ultimately may not think the exposure gained was worth the money spent.
While you'll reap the benefits of a well-conceived sponsorship for years, a sponsorship that addresses the wrong market or the right market in the wrong way can be devastating. In order to make the best possible decision, weigh the pros and cons first, and then follow-through with these suggestions: Use banners on-site to establish your presence at an event; promote the event through your newsletter and website; have company representatives on-hand to answer questions about your business; distribute your product at the event; get feedback from participants; and take photographs/get testimonials on-site for use as a sales tool later.
