Organisations with charitable status often have enormous commercial potential, but more often than not, that potential goes unrealised. Instead, most charitable organisations make one big mistake after another, with the result being sponsorship income that is a fraction of what it could be.
So, I’m going to go through some of the biggest mistakes made by organisations with charitable status. If you see your approach in any of this, please consider this a wake-up call, because sponsorship for you will get nothing but tougher and less fruitful for as long as you do any of these things.
Appealing to their compassion
Sponsors know that there are hundreds of thousands of charitable organisations that would welcome their sponsorship. All of those organisations are doing good things – they’re ALL worthy – so your fifteen pages about how needy and worthy you are doesn’t differentiate you in any way. And the harder you hit the compassion angle, the more it sounds like a plain, flat guilt trip, and sponsors really hate that.
Sponsors don’t make sponsorship decisions based on compassion, so stop with the sob stories and make a business case. What do they want? Their goals are varied, but they tend to fall into a few major categories:
- Adding value to their relationship with their target markets, which could be internal, intermediary, or end-users
- Aligning with the values, priorities, concerns, and passions of their target markets
- Achieving marketing objectives (changes in perceptions and behaviours) with their target markets
How the sponsor can achieve those things with the sponsorship should be the anchor of your proposal, not your need, because honestly, sponsors don’t give a crap about your need.
Telling them what the money will be used for
It’s none of a sponsor’s business what the money will be spent on. They’re not underwriting costs – that’s a grant – they’re investing in a leverageable marketing opportunity. Sponsorship is unallocated funds, so as long as you deliver the benefits as promised, you can spend any excess funds (beyond what it takes to deliver the sponsorship) on whatever you want.
And if you think that telling the sponsor what you’re going to spend the money on helps to push that “compassion” button, it doesn’t. It only serves to make you look like you don’t know the difference between a grant and sponsorship, and sponsors don’t want to work with organisations that don’t know what sponsorship is about.
Telling them about your budget shortfall
As much as your board may think that sponsorship is some kind of magic solution to all of your budget shortfall woes, it isn’t. Your financial need and your commercial value are never the same amount, so as an organisation, you just need to get over it. (For more on this, see “What Should You Do When Your Board Sets Unrealistic Sponsorship Targets”.)
Worse than that, however, is going out to sponsors and telling them that you have a hole in your budget that you want sponsorship to fill. This is a huge red flag. You are asking them to make an investment in you – to trust that you are professional and well-managed – but then advertising that you’re financially unstable. Bad idea.
Approaching the CEO (or the CEO’s spouse)
One angle on the “appeal to their compassion” approach is to target the CEO or Managing Director. Unfortunately, the same rules apply. They get hit up by hundreds of charitable organisations, and all of their buddies on some charitable board, but the fact that accountability around sponsorship has risen exponentially since the Global Financial Crisis means that senior executives can no longer treat the marketing budget like a personal slush fund.
There are a few notable exceptions, but not nearly enough that you can count on, and in most cases, one of two things will happen:
- Your proposal will eventually work its way down to the sponsorship manager (AKA, the gatekeeper), who will decline.
- Your proposal will be flicked to their (often underfunded) foundation, where you will be offered a tiny donation instead of the substantial sponsorship you were seeking. This is also called “go away money”.
Getting your board to appeal to their networks
Speaking of “go-away money”, if that’s what you want, by all means, get your board to go out to their buddies and beg for some cash. If their arms are being twisted, many of these will ante up small amounts of go-away money, just to get your board off their back.
On one hand, you may get a bit of money in the door. On the other hand, you will also have…
- A sponsorship portfolio that is dominated by rats-and-mice sponsorships, all of whom need servicing.
- A sponsorship portfolio full of sponsors that don’t necessarily see any commercial value in what you’re doing and don’t really want to be there.
- Lowered your commercial value, as your portfolio will showcase that most companies choose to do business with you at the lowest rung of involvement.
If you want to use your board’s network, just get them to open the door for you, then get out of the way, so you can do a proper proposal for the marketing decision-makers.
Highlighting your tax-deductibility
The second you say, “Your sponsorship is tax deductible”, is the second a sponsor knows you have no idea what you’re doing.
The implication is that, because you’re a registered charity, they will be able to write off the sponsorship as a charitable donation. Except no, they can’t. That would be illegal.
A tax deductible donation is made with no expectation of a commercial return, and only acknowledgement of the gift. Sponsorship is specifically about providing a sponsor with leverageable marketing benefits, so it doesn’t in any way qualify as a donation.
But here’s the rub, ALL sponsorship is tax deductible as a marketing expense, whether it’s sponsorship of charities, festivals, sports teams, venues, or whatever. Implying that sponsorship is tax deductible because you’re a charity just makes you look silly.
Selling packages of convenience
I’ve lost track of the number of times I’ve heard a charitable organisation describe the ideal sponsor as a company “who doesn’t expect much for their money”. Do you think sponsors don’t know when your organisation sees them as a necessary evil? Because they do, and the first time they see that is in what you are offering them for the sponsorship.
If what you’re offering them can be described as “the least you can do for the money” and/or consists of varying numbers of easy-to-deliver commodity benefits – logos on things, tickets to things, hospitality, and some kind of official designation – you’re sending a clear message that sponsorship is about YOUR need, and has nothing to do with the sponsor’s needs.
One of the biggest red flags for a sponsor is when a charitable organisation uses donation-speak and sponsorship terminology interchangeably. This tells a sponsor that you a) don’t know the difference between sponsorship and philanthropy; or, b) have realised that there’s more money in sponsorship than corporate donations, so you’ve started to change the vocabulary, but haven’t changed the approach.
Do not EVER use the following in a sponsorship proposal, correspondence, or meeting:
Not valuing in-kind
Just because you’re a charitable organisation doesn’t mean that goods and services that companies provide doesn’t have value. And yet, so many charities only consider the cash received from a sponsor, putting the often substantial in-kind products or services into the category of “freebies”.
Listen carefully to me right now: When a sponsor provides you with in-kind products and services, they have to account for that internally. It comes out of the brand budget, just as if they had handed you the cash to buy it. Treating a sponsor that provides $10,000 cash and $50,000 in-kind as a $10,000 sponsor is insulting. The in-kind is worth what it saves you, and you need to treat your in-kind sponsors as if they invested that much in cash.
Telling them they’ll be “giving back to the community”
Euphemism. Ditto “good corporate citizenship”. They mean nothing to a sponsor. They’re not objectives – they just mask objectives. Sponsors invest to achieve marketing objectives, which can each be stated as either changing people’s perceptions or changing their behaviours. For instance…
- Engender trust in the brand or company
- Make the staff proud
- Align with target market passions
- Make target markets feel understood and valued
- Increase preference, trial, intent, loyalty, and advocacy
- And much more
Telling a sponsor that if they sponsor you, they’ll be “giving back to the community” or “good corporate citizens” says nothing about what they could actually achieve. It also makes you look like you either don’t know or don’t care what their real objectives are, and that doesn’t make you an attractive partner.
Including board profiles (and other extraneous crap) in your proposal
In an effort to establish credibility, a lot of charitable organisations include the most ridiculous amount and type of extraneous information in their sponsorship proposals. The most egregious of these is profiles of all of your board members, followed by org charts, long-winded organisational profiles, annual report data, reference letters from members of government, etc.
Your proposal is built around a story arc – one that builds a vision for the sponsor, so that they can see how much sense this makes for them. Putting in any of that stuff – and I’ve seen proposals with ALL of that stuff in them – is incredibly counterproductive. It would be like Star Wars: The Force Awakens making you sit through all of the credits forty minutes into the movie, and then restarting the film. The flow of the story stops dead, the magic spell broken, and our enthusiasm dampened. That’s what it’s like for a sponsor. They hit all that crap, think “they don’t get it”, and give up. Plus, this is another clear signal that sponsorship is about you, not the sponsor.
Here’s the thing: If a sponsor wants that information, they’ll either look for it on your website or they’ll ask. Including it in a proposal only hurts you.
Focusing on your mission statement
Your mission might be the driving force behind what you do, but your mission statement means exactly zero to the sponsor. Your value to a sponsor is built around:
- The passion of your fans, and why they care
- The relevance of what you do, and the larger themes, to the sponsor’s target market
- The quality of the fully customised benefits you provide
- The leverage ideas you provide that build the sponsor’s vision around what’s possible
This may or may not intersect with your mission statement, but when you’re selling and servicing sponsorship, you need to continually frame the opportunity about what it means to them.
I want charitable organisations to succeed with sponsorship. I want you to be competing on an even playing field with sports and events, which you absolutely can do. In fact, you can do things that they can’t, and you need to identify and exploit those opportunities. (You can find a whole section specifically for charitable organisations in The Sponsorship Seeker’s Toolkit 4th Edition.)
But the real “win” for charitable organisations is that if you get better at sponsorship, you’ll have bigger sponsors, more engaged sponsors, sponsors who are spreading your messages to their, substantial markets. You’ll have more unallocated funds for everything you need to do, and when charitable organisations are better resourced, that’s good for our communities.
Need more assistance?
For all you need to know about sponsorship sales and servicing, you may want to get a copy of The Sponsorship Seeker’s Toolkit 4th Edition.
If you could use some additional support, I provide sponsorship coaching, sponsorship consulting, sponsorship training, and if you need a fast, cost-effective start, you might look into the Jump Start program. If you’re interested in any of these services, please review the materials and drop me a line to discuss:
AU: +61 2 9559 6444
US: +1 612 326 5265
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