This section explains sponsorship and how it can be incorporated in the planning of your event.
What is sponsorship?
Sponsorship is cash paid and/or in-kind goods and/or services provided to an organisation in return for specific commercial benefits.
For the sponsor, sponsorship can:
- help to raise the profile of the sponsoring organisation
- sell more products or services
- reach particular target audiences and
- promote a positive awareness of the organisation with customers, potential customers and the community.
For the event organiser, it can provide essential capital or resources to enable to event to proceed.
Most sponsorship agreements are structured in the form of direct financial assistance, but some businesses prefer to offer an ‘in kind’ sponsorship, which involves the sponsor providing equipment or resources.
If this is the type of support you are offered (or looking for), make sure the goods or services will be useful, and that you understand and legal and tax implications of this form of sponsorship. And make sure you clearly define the value of goods and/or services and any limitations and conditions that may apply.
Finding a sponsor
If you are thinking of sponsorship for your event, you should consider what value will sponsorship bring to your event? Are you seeking:
- additional funding so that it can go ahead
- sharing of the responsibility/risks
- support for your marketing and promotion needs
- goods or services as part of running the event or as promotional giveaways?
Once you clearly understand why you want a sponsor, identify potential sponsors as early as possible.
Begin by looking at organisations in the local region, preferably those with strong links to the nature and focus of your event. (It’s a good idea, if you can, to develop a relationship with them at appropriate opportunities before tackling them about supporting you). In large organisations, sponsorship decisions are typically made by marketing, advertising or corporate communication teams. In smaller companies, the owner is likely to make any sponsorship decisions.
Unless you have a high-profile event of national or international interest, you are unlikely to secure sponsorship from national or international organisations. If a large organisation has headquarters or a large regional presence in the area, you could consider approaching them for support.
When you approach an organisation to gain sponsorship, they will want to know that your activities and aims are consistent with their company. Likewise, you should thoroughly research your potential sponsors - and make sure that you actually want to be involved with them.
Businesses will say that some of the reasons they won’t consider sponsorship proposals are:
- insufficient (or no) research and preparation and failure to understand the business interests and objectives of the prospective sponsor. (You need to know what the business does: there’s no point in seeking the support of a company that markets tobacco for an Anti-Smoking event or a company that markets alcohol for a temperance occasion!)
- over-valuing the sponsorship proposal (under-valuing also shows a lack of professionalism)
- improperly addressed mail (you need to make sure it is addressed to the right person let alone the right business – and if you’re approaching a number of different organisations, make sure the right proposal goes in the right envelope!)
Once you have determined what you want, and who you think would be appropriate sponsors, you need to take the next steps:
- approach potential sponsors well before you need the proposed sponsorship – months before, not weeks and certainly not days before.
- talk to as senior a person as you can within the target sponsor’s organisation. Find out who manages their sponsorship arrangements – make an appointment to see them and then send an outline of what you are seeking / offering before that meeting.
- don’t think of sponsorship as a favour. This is a commercial agreement: the sponsor is “buying” marketing and promotion opportunity through the event being organised by your group.
- be realistic – match the value of what you are offering to what you expect from your sponsor/s, and make the benefits you are offering measurable. Depending upon the size of the sponsoring organisation, and the level of support being provided, a sponsor organisation may:
- wish to be a sole or major sponsor
- request that their logos, slogans or graphics appear on your promotional material
- review your budget, strategic plan or other documents
- wish to know about current or past sponsors
- need to approve press releases and other material
- once a potential sponsor expresses interest, be very clear with your offer – have a draft agreement ready that clearly defines the terms and conditions of the sponsorship agreement for both parties.
- provide a post-event report to your sponsor. Identify the ways in which you delivered on your agreement, be honest about any problems and note ways in which they could be prevented. A good evaluation report will demonstrate your professionalism – and could help your sponsor feel positive about developing an on-going relationship.
Apart from financial support, your event can be assisted by the provision of in-kind support through cost neutral services or promotion. Media partners may, for example, provide the event with promotion in return for on-site branding exposure or sponsor recognition in event marketing collateral.
Similarly, the event may contain a corporate/VIP hospitality component, so a wine maker or beer producer may agree to partner the event by supplying goods in return for various forms of recognition. You may also be able to offset the cost of printing promotional material for the event by seeking in-kind sponsorship.
The sponsorship agreement
A sponsorship agreement is not something to be taken lightly - either written or verbal; it is a legally binding agreement where your group provides prearranged benefits to the sponsor, in return for an agreed level of support (is it financial or 'in kind' support).
While you can come to a verbal agreement on a sponsorship (eg: the local butcher provides snags for a street-party sausage sizzle and you make sure he gets a sign and a written thank-you), it is far better to create some kind of written agreement. This can be in the form of a legal document, or written out in every-day language.
At the very least, the agreement should describe the nature of the sponsorship relationship, describe, detail the responsibilities of both parties and include some means for addressing any problems as they occur. More specifically, a written agreement should:
- specify the value (in cash and in-kind) the sponsorship
- specify the schedule of payments/delivery of goods/provision of services (Many sponsors prefer to ‘pay by instalments’, linking payments to certain milestones or achievements)
- clearly set out the obligations, rights, benefits and responsibilities of each party
- agree a reporting process to ensure the sponsor is kept informed of your group's progress. Make sure the desired format, frequency and standard of reporting is made clear, and check if your sponsor wants access to your budget, strategic plan or other documents
- make sure you designate one key person from each organisation to be the point of contact for sponsorship matters
- make sure the rights of existing sponsors are acknowledged in any new arrangement
- you need to recognise that either party can be sued for breach of contract if they fail to meet the promises made in the sponsorship agreement, this is why it is vital to promise no more than you can deliver and if your group finds itself unable to meet a sponsorship obligation, you should immediately inform your sponsor and negotiate a new or modified agreement.