If you’ve got limited time and resources and you want to know the best bang for your buck when it comes to charitable giving, you may have asked yourself: Donation vs. Sponsorship: what’s the difference, and is a sponsorship a donation of sorts? Donations and sponsorships aren’t the same, but they do have a lot in common.
In this article, we’re going to look at those commonalities, identify some of the important differences, and give you some best tips on how to acquire either. Or both, if that’s what you want! Keep reading to see how to choose between the two or how to use one to facilitate the other and get your nonprofit a wider audience and a steady stream of funding.
Is a Sponsorship a Donation?
Sponsorships and donations have a lot of similarities, but they are different things. To best understand the difference, let’s take a look at each one individually.
Sponsorships are a reciprocal arrangement that can be a mutually beneficial approach to receiving money for your charity. Sponsors are typically corporations motivated by the chance that your organization will act as exposure for them while they get the opportunity to give something back to the community.
There are three major types of sponsorship deals you might look out for including:
1. Financial sponsorships – these are regular giving arrangements that support nonprofits year-round. They can be in the form of money, or other support such as gifts or human resources, media exposure, etc.
2. Fundraising sponsorships – these might be specific events or campaigns designed to raise money. Corporations may supply the venue, the staff, and/or other resources, and these are great for raising money, particularly for smaller organizations that may not have a lot of overheads to work with.
3. Media sponsorships – These cover the cost of promoting your event or cause, whether it’s radio, TV, or other forms of advertisement.
Sponsorship deals, therefore, can be arranged in a way that most suits your organization and its needs and be set up with a sponsor corporation that best aligns with your cause. Both of these types can involve either cash or what’s called “in-kind” sponsorships, in which products or resources are donated in place of money.
In many ways, getting corporate sponsorships is much like any other form of fundraising. It’s essentially about the strength of your network and its relationships. Sponsorship is a mutually-beneficial relationship which means you need to identify both your needs and the needs of your sponsor and come to some agreement about how both can be met.
These sponsorships have a lot of similarities and differences to standard donations, which we will go over in later sections, but if sponsorships are the path you want to take, it’s important to follow a series of steps to build your sponsorship strategy. We’ve got an example pathway below that you can take when looking for sponsorship.
The Path to Sponsorship
We’ve broken down the route you can take to get a sponsorship deal into seven basic steps:
- Prepare – If you don’t already have a network, now is the time to get started. Make contacts, reach out, connect with people and begin forming relationships with them. You’ll want to form plenty of long-term, high-value connections that will ultimately serve to boost your reputation and your presence in the community. Focus on getting out there, getting known, and building up your reputation.
- Search for prospects – Your best bet with sponsors is to find one who most aligns with your goals. This will take some investigation, but the first place to look will be into where your potential sponsors have spent their money in the past. Corporate websites may have their causes listed, which is an easy win, or you can look into other nonprofits in your sector and see who’s been involved in the past.
- Identify sponsor goals - Remember, a sponsor’s business goals and brand must align with your cause in order for them to consider offering you a sponsorship deal. Try to figure out what you can offer the sponsor company to help them reach their goals. Exposure is a basic one and most common with sponsorship deals, but there are plenty more. Some companies may want to send employees to volunteer with your organization or perhaps help you build a market for their product. There are many possible ways you can find a mutually-beneficial arrangement with your sponsor, so look closely at where your ideals overlap.
- Form a shortlist – Narrow down your prospects into a shortlist of high-probability potential sponsors, and start digging deeper. You’re going to want to identify a key individual in each company to reach out to and look for a meeting with. If you have a robust network by this stage, you may already have a path into this organization, so check your contacts first. The closer you are to the person involved, the more chance you have of getting a meeting and, ultimately, a deal.
- Reach out – If you don’t have a person on the inside, consider reaching out to an administrator and asking who best to contact to ask some questions regarding sponsorship. This will hopefully result in a lead with whom you can begin the conversation.
- Have your pitch – You’ll need to know exactly what you want before you have this conversation, and the more specific, the better. Have a presentation or a brochure ready, and have your ask, including what you’re asking for, what the benefits are for your sponsor, and how the agreement will help both parties. When the time is right, make the pitch.
- Follow-up – Whether you succeed or fail will mostly come down to your prep work and the alignment of your goals with those of your sponsor; however, some pitches may simply get lost in the pile, so a humble follow-up can make all the difference here.
To those familiar with donations, it should be immediately obvious that there is some overlap and some similarity in this process of gathering donors for your nonprofit. Next, we’ll go into more detail on what donations are, how to get them, and how they differ from sponsorship deals.
Donations are the most traditional of giving options for nonprofits. While, of course, people can donate money, they can also donate other resources such as products or services. As such, donations can come in many forms from a variety of sources. Here are three of the most common types of donations you can likely find for your nonprofit:
- Recurring – these are the kind of donations that long-term allies to your cause will provide. They may be smaller than some of the one-off donations mentioned below, but they can often amount to more in the long run.
- One-off – these typically come around the end of the year, when giving is at its highest. Donations like this may be in response to a highly-visual event or funding drive and are not necessarily going to be repeated. They can be large or small amounts.
- Volunteering – this is typically considered a different class of service than a donation, but in some cases, organizations can donate a workforce, in which case the volunteers become the donation. This would be an example of an in-kind donation, such as those mentioned earlier.
Donation drives, therefore, need to be tailored to the ideal donor, and to the cause being served. And there is a similar path for nonprofits to take to source them. They do, however, differ in many ways from sponsorships, and we’ll talk about these shortly. First, let’s go over a typical roadmap to sourcing donations for a nonprofit.
The Path to Donation
The path to donation resembles the path to sponsorship in many ways. Here are the basic steps:
- Prepare – Getting donations comes with the same preparatory steps as getting sponsors. Networks are your friend here and knowing exactly what you want and from whom is going to take you a long way. Have a donations page ready to refer people to, and all the information about your cause accessible for them to learn about you.
- Search for prospects – Again, your network should help you with this. Designing your networking strategy with your prospects in mind is the key. Getting your brand and cause out there and making sure people know and trust you is how you find your first donors. Start forming closer relationships!
- Engage prospects - For your online and mobile media, segment your prospects list and personalize your outreach. Automate where possible, with help from Rally Corp; send personalized text message outreach to your contacts, and make the sign-up as simple as possible. RallyCorp allows you to grow your prospect list fast by using QR and shortcodes to connect and inspire people to take action.
- Follow-up – RallyCorp also gives you the option of a thank-you text and a fundraising thermometer so that donors can see the impact of their donations as they are made. However the donation was made, a thorough and thoughtful follow-up is the key to boosting donor retention and improving your chances of another donation in the future.
So, these are some of the similarities between Sponsorship Vs Donation drives, but you may have noticed that there are fewer basic steps in the latter. That’s because the approach to donations can be a little more streamlined in some cases. However, this doesn’t make it easier, and there is still the need for plenty of research and effort in both. But what about the differences?
Sponsorships Vs. Donations: Which is Better?
Your choice of pursuing donations over sponsorships or vice versa will depend on what you’re looking to get out of the deal and what you have to contribute to it.
While there are many similarities in attaining either, the results can be quite varied and different, so it’s important to know exactly what you’re looking for before you jump in. Not only that, but for sponsorships especially, you’re going to need to know exactly what you can give back. Both options have strengths and weaknesses, so consider the following points:
- If you’re looking for a cash sponsor, can you adequately give the public recognition, exposure, or branding they require in return? A cash sponsor could support your organization with an immediate and significant capital injection, but it will want something in return.
- If you can supply these things, perhaps you’ll find a better deal with some facilitation in the form of services or other support that an organization could supply. If your goal is to raise awareness and get out there to find donors, a sponsorship deal could be a good way of doing it cheaply with in-kind sponsorship.
- Are you surrounded by a network of philanthropists who are interested in your cause? You may have an untapped source of donation money right there in your network. Donations may be harder to attain from scratch but come with limited responsibility on your end.
- Another difference to consider is that sponsorships are sometimes inherently beneficial to the organization offering them. Tax breaks for charitable work mean that many companies use corporate philanthropy to their financial advantage.
- Donors will usually supply capital capped in the hundreds, whereas sponsors can bring in thousands or tens of thousands.
- Donations are more likely to be short-term contributions, while sponsorships may be recurring collaborations if run well and are mutually beneficial.
Ultimately the pick of the two depends on how you want to approach your goals and the resources available to you. In some cases, maybe one will facilitate the other, and in some cases, you may benefit from both. It comes down to knowing what your organization needs at any one time.
One thing to remember is that sponsorships can result in reaching more donors, so it’s important not to consider these options as mutually-exclusive. In fact, if you have the time and resources, it’s worth looking deeper into how one can help you achieve the other and how using both can bring you a cycle of capital year-round.
Whichever option you decide suits your needs at this moment, there are some best practices worth following to boost your likelihood of success and to improve your luck for the second round. Let’s take a look at some of those now.
Donation Vs. Sponsorship: Best Practices for Both
As we have alluded to in the article so far, the similarities in acquiring the funding or resources for your nonprofit from both sponsorships and donations have some similarities. Here, we will list a handful of tips and best practices to maximize your chances of reaching your goals, whichever route you choose.
Tip 1. Understand your audience – This is a universal key to success. Whether donors or sponsors, you need to do the relevant research to identify, first off, your ideal audience and, secondly, as much about them as you can figure out. This not only saves time but deepens your connection when you finally find them and moves them through the donor/sponsor journey smoothly.
Tip 2. Make real connections – Don’t look at your prospects as inanimate sacks of money. Your efforts will go a lot further if you’re genuine, make real friends, and treat people with respect. If you can employ some good networking practices, you’ll see a much more organic movement into donations and sponsorship deals.
Tip 3. Set goals – This involves both knowing what you want and understanding what’s realistic. Setting goals based on short and long-term ideals gives you something to aim for, and setting targets help to let you know how close you are to reaching those goals.
Tip 4. Review and improve – Everything in life is as much about trial and error as it is about preparation, and this is no different. Get in there, give it an educated attempt, and then sit back and identify what worked and what didn’t. From there, do it again, but tweak it in response to what you’ve learned.
Tip 5. Never forget the gratitude – This ties into the point about being genuine and making real connections. When the donation is made and the event is over, don’t forget who your friends are! Always follow up. Aside from being the right thing to do, it will also inspire people to repeat their acts of generosity.
Following these practices will give you the best shot at reaching your goals, and by now you should know what those goals are. All that’s left now is to go after them!
So, Sponsorship vs. Donation. Which is best? That’s something only you can answer, but in many cases, they go hand-in-hand. Sponsored events can expose your cause to a wider audience at a minimal cost, and from there you can reach more donors. On the other hand, donations come from the philanthropic nature of humanity, and generally, donors don’t expect anything in return.
Either way, the key to acquiring either is to do the groundwork, identify your prospects, and figure out how your cause or your resources can appeal to them.