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™.