During the season of New Year’s resolutions, beware of very bad habits your organization may have picked up by osmosis in the marketplace. These habits could be costing you a lot of money in both liability and money on the table.
Here are three mistakes I’ve noticed recently:
The Cost Pass-Through.
If a company is sending you a check ostensibly to “sponsor” some aspect of your organization or event — for example, the lunchtime catering at your conference — and you turn around and write a check for the exact same amount for the cost of that service, you do not have a sponsor. Perhaps you could call this underwriting, but it’s not sponsorship.
Therefore, you have no responsibility to provide any marketing value besides possibly modest recognition.
Remember, corporate sponsorship is an exchange of value, The fee structure has nothing to do with cost and everything to do with ROI.
You’re the Benefactor.
If a company launches a promotional campaign, directing and paying for the multi-channel campaign, and your organization has to invest considerable time and effort to motivate your constituents or members to get involved, plus contribute your own media, but you and your members don’t receive any money for that effort, you do not have a sponsorship. You could stretch it and say you have promotional partner, and certainly there is nothing wrong with being the benefactor of a promotion. But it is a problem when we’re not clear with ourselves about what we actually have.
When you have an opportunity for sponsorship, you own and control the asset. It could be an event, a promotional campaign, an initiative, a program, or even a service. But it’s yours, and you control the intellectual property, proprietary rights, and all other considerations — including the business model.
If a media partner offers to sell sponsorship for your event and minimally is unwilling to:
- share the revenue equitably,
- collaborate transparently,
- sign an agreement, and
- provide evidence that they have fulfilled their responsibilities,
You have a hijacker on your hands, not a media partner. Anyone they bring to the table unknowingly may be complicit.
You are assuming the very real liability for the event. Why would you let a media partner profit from it at your organization’s expense?
Corporate sponsorship is an excellent way to generate earned revenue for your nonprofit organization or non-dues revenue for your association by leveraging assets of your organization and delivering tremendous value to corporate partners. In the process, that leverage point also should become the fulcrum for your organization to derive considerably more value.
Some of my best clients have turned to me to resolve these and other issues with great results. For example, one who followed my advice after we sorted through the tangled web of problems, won over the sponsor, quadrupling the sponsorship fee, while retaining the media partner (albeit with better terms). The next year, the sponsor invested double the amount.
Besides leaving money on the table, my client had devalued their sponsorship opportunity and had a weak relationship. They turned around both the relationship and the fair fee structure, and from what I hear, the relationship is still going strong. In two years, they realized a 12x fee increase from that sponsor alone.
Don’t be duped. If you or your organization is new to sponsorship, invest in the right resources to sort out these and other issues. Otherwise, you’re leaving lots of money on the table — money that could really drive your mission.