The Differences Between Philanthopy and Sponsorship
While your company may have had a public relations based corporate giving strategy over the years aimed at charities it may be time to look at the other, more targeted form of community investment – sponsorship. Sometimes people mix up these two very specific ways of supporting communities and causes. They can be complimentary but let’s be clear a donation is an act of the heart where a sponsorship is all about doing business.
When you examine where Philanthropy and Sponsorship are on the Canadian scene a variety of business studies point to the fact that while philanthropy is still strong in the minds of businesses from coast to coast to coast, sponsorship is on the rise to the tune of $1.4 billion a year in Canada.
Three main differences between Philanthropy and Sponsorship point to the rationale you can use to evaluate community investment decision making.
1)Philanthropy is an act of kindness – Sponsorship is an act of business. While your donations committee may be strategic in their choice of non-profit groups or charities to support (we call them properties) if it’s a donation you will get a warm thank you and a tax receipt. You may attend the event, your employees may also be involved but the charity is regulated by Canada Revenue to a maximum of $75 to say ‘thank you’. Maybe a sign or banner is hung or a thank you trophy is received, but that’s it.
A sponsorship is a business arrangement where money exchanges hands for the purchase of a non-profit or charity assets – their name, their cause, the specific event held etc. It’s a negotiation. It still may have personal and emotional commitment like a donation but you, as a business, are looking for specific results from your investment – delivering a certain audience, sharing time with customers or suppliers – it’s all written out and it’s solves a business need.
2)Philanthropy is from the heart – Sponsorship is from the vision statement. While you may wish to do good work in the community (and everyone should), if you wish to also make your company stand out from your competitors, you are looking at the world of sponsorship. If retaining your employees is number one on your wish list, a sponsorship that involves employees supporting a cause by volunteering their involvement can be negotiated as a part of a sponsorship proposal. A sponsorship allows you to lay out the plan, with the property in mind, and can also involve other budgets you control like advertising human resources, or marketing. You are investing in the rights that the property controls – the event, the name, the history, the prestige and for your investment you get to call the shots.
3)Philanthropy makes you feel good – Sponsorship makes your customers and stakeholders feel good. You can feel good about sponsorships as much as you can feel good about your philanthropic giving of the foundation you’ve set up, but a sponsorship goes the extra mile to include making your customers or clients share the experience, too. Nothing says ‘I appreciate your business’ more than a chance to multi-task at a fun event. It may be fresh air and exercise or a chance to experience a special moment but a sponsorship can allow you to create the “thank you” in a well orchestrated way. You need to be creative and think “consumer engagement” when you are dealing in sponsorship marketing. This is where a sponsorship investment can outperform any other form of marketing, enhance your public relations strategy and make the difference for you.
Submitted by Brent Barootes, President, Partnership Group – Sponsorship Specialists™. www.partnershipgroup.ca.