Sponsorship: risky business or opportunity for impact?

publication date: Jul 4, 2018
author/source: Sarah Powell

For many, the business of charitable sponsorships is intimidating. There is a belief that a charity’s public affiliation with a corporate entity is risky and problematic. Charities worry about the consequences of associating themselves with corporate partners over which they have no control. This nervousness and high perception of risk has ensured that Canadian charities and not-for-profits have stagnated their approaches to corporate partnerships. The result is that charities have dampened their offerings, rather than innovating and embracing new opportunities.

At the same time that charities seek to dull their partnership exposure, corporate giving is now, more than ever, a commercial endeavor that is valued not simply by project outcomes, but by impact, engagement and reach. In a world of KPIs, ROIs and ROEs, how do we protect our brands and our credibility whilst maintaining funding levels and partner sustainability? It’s time we move away from our fears, break down the risks, and find ways to build greater opportunity, (including and) beyond dollars from our corporate partnerships.

Mitigating Risk 1: Public backlash

• Create a robust partnerships policy with input and approval from your Senior Management, Communications, Donor Relations, Finance, and Programs teams.

• Work with your partner and key departments to address potential issues ahead of time.

• Do your due diligence for every new partner and renewal. Continue to track your sponsor’s news closely throughout the partnership (hint: Google Alerts).

• Set up a regularly scheduled internal team meetings to assess risks with new and existing partnerships.

• Create crisis communication plans and produce transparent documents you can share across your communications platforms.

• Ensure your contracts account for reputational risks and liabilities.

Mitigating Risk 2: Perception of ‘selling out’

• Get your strategy, partner and funding mix right. Aim for 3-7 big partners (dependent on the size of your organization and resources) from key industries that are meaningful to your cause. Focus your assets and energy on them. In a traditional model, corporate partnerships should not make up more than 20% of your funding mix.

• Educate often on the benefits of sponsors and strategic partnerships both internally and externally.

• Ensure your policies and contracts outline specific terms on collaboration and corporate interest projects.

• Engage and negotiate with partners to give value beyond a simple financial contribution. They have assets and influence that can help you achieve your broad organizational goals. Implement a plan for maximum impact and communicate this clearly to your stakeholders.

Mitigating Risk 3: Audit complexities

• Agreements can become complex - work with your Finance and fundraising teams to understand, before any agreement is signed, how to meet Imagine Canada and tax standards with corporate partners.

• For gifts-in-kind and intangible assets such as communications valuations, create a standard internally, by which you can assess and report these.

Mitigating Risk 4: Selling yourself short or inflated self worth?

• Know your worth, literally. Identify and value your assets. If you’re lost - speak to one of the many companies offering asset and sponsorship valuation (Elevent, Sponsorship Collective, Partnership Group, Sponsorship Canada…)

So, are sponsorships really risky business? Yes, but no more so than your work in any other part of your organization. With the right planning, negotiation, and stewardship, strategic corporate partnerships can drive significant growth and help you achieve your goals through innovative methods. Partnerships work when they meaningfully reflect your values and amplify them. Partnerships work and resonate with stakeholders best when the impacts are achieved together. Do it right and the rewards will always be worth the risk.

Sarah Powell is a passionate partnerships professional, with a rich career working with and for some of the world’s largest brands. Sarah is currently the Sponsorship and Strategic Partnerships lead at University of Toronto, and a board member of Alternatives Journal.

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