People often interchange the terms of Sponsorship and Philanthropy. They are two totally different beasts, and usually come out of two totally different budget lines (for the corporation).
Sponsorship usually comes out of a marketing budget. There is a well-defined list of benefits that the corporation will receive in exchange for a financial contribution to the charity.
Corporations have to be smart in their use of marketing dollars. Does your charity easily align with the mission/vision of the corporation? Is this a good use of the corporation’s marketing dollars? I have seen many corporations have a great tie-in with a charity and the bang-for-the-buck is better than most traditional marketing avenues.
Philanthropy, however, is a totally different concept. There may be a monetary exchange. Or there may even be a naming opportunity (the ‘grey’ area of philanthropy). There may even be an in-kind donation (like having the employees paint a room at the charity).
How to differentiate the two
Corporations (as with donors) are concerned with impact. What is the impact on helping the charity achieve its goals? Better yet, what is the impact on the corporation around employee engagement via this gift?
Philanthropy is usually decided by an individual (an owner, General Manager, etc.) who is usually the ultimate decision-maker. Sponsorship tends to be a Marketing decision and is, by definition, transactional. Not a lot of ‘warm and fuzzies’ there. Each side of the sponsorship agreement is benefitting by the terms outlined in the contract. That’s not to say, however, that the Sponsorship is not making a huge difference to the charity.
Philanthropy (for the most part) has no direct benefit (other than a good feeling) for the donor corporation. Nothing is usually expected in return. (Other than good stewardship of the gift.)
We, as fundraisers, often muddy the waters. We look for sponsors of a program/service when in reality, we want donors to that program/service. I would suggest that we try to be as succinct as possible — if you are looking for donors, seek out donors.
The Easy Route?
Far too often, fundraisers go for the Sponsorship route over the Philanthropic route. Just in case you haven’t been able to read between the lines in this blog, Sponsorship is not Philanthropy.
Sponsorship tends to be easier to ‘sell’ as there is a list of benefits, etc. and usually a finite timeline. There are also usually level bands (i.e. Gold, Silver, Bronze) and a pre-defined set of agreed-upon deliverables. The decisions are binary (yes or no).
Philanthropy, however, is not as constrained. The timeline is totally dependent on the corporation (sometimes you can use time to your advantage when selling sponsorship — i.e. we need your commitment 3 weeks prior to the event to have the shirts created, etc.). The impetus of urgency is not always there when dealing with Philanthropy. Furthermore, the level of Philanthropy is somewhat fluid. The corporation can essentially choose to give the charity whatever amount makes sense for them (as opposed to the defined price of a Gold level sponsorship vs. a Silver level).
So, Is Sponsorship Philanthropy?
Both Sponsorship and Philanthropy should have a prominent place in your cadre of fundraising activities. While sponsors come and go, corporate philanthropy tends to have the potential for the greatest level of engagement as it involves a larger number of employees.
So, as I said a few posts ago, sometimes words matter. Is the corporation looking for sponsorship or is it looking to be Philanthropic? Your job, as the fundraiser, is to help this organization decide what is best for them.
Until next week.