CHAPTER 9
Special Considerations for Nonprofit Organizations
We added this chapter in the third edition of this book, and when we contemplated including it, we wondered if it was really necessary. In reality, sponsorship is sponsorship, and the approach and process for doing it well is exactly the same whether you are a European children’s charity or an American university bowl game.
In the end, we realized that nonprofit organizations do face a number of additional challenges and have some unique opportunities, so we decided to include this chapter to address those special considerations.
Rumor and Innuendo
You may find yourself facing a lot of preconceived notions about what sponsorship of a nonprofit organization is about. You need to accept that, no matter how proactive and partnership oriented your organization is, many others with less enlightened outlooks have gone before you, burning bridges as they went.
In this chapter we have outlined some of the more common attitudes held by sponsors, and a few techniques that can break you out of that pigeonhole.
You are Looking for a Handout
Corporate sponsorship of nonprofits has not been around to any great degree for very long. In fact, when it all started, many nonprofits simply changed the wording—asking for a donation to asking for sponsorship—without changing any of the underlying structure. Sponsors would invest marketing money, be treated like donors, get no return, and learn to be very skeptical of nonprofits looking for sponsorship.
To counteract this, there are a few things you can and should do:
• Ensure you don’t focus on your organization’s need, particularly in early conversations. Give them a thumbnail sketch and then move on.
• Use those early conversations to gain information from the sponsor on their overall marketing objectives and target markets, and how they see these changing in the future. Although they may have a nonprofit strategy in place, asking those very objective-oriented questions, rather than asking them what they support, will position you as a potential commercial partner.
• Do not ever let your personal passion for your organization’s mission blind you to commercial realities. Your organization may do amazing things, but that doesn’t make you the perfect partner for every sponsor out there. Concentrate on finding the right fit, and you will end up with a portfolio of fantastic partners that bring money, promotion, expertise, and more to the relationship.
• Clearly acknowledge to the sponsor that while you are a nonprofit organization and clearly have funding needs and a social agenda, you understand that they need to be able to justify their investments and make a meaningful return.
• Do your very best to speak with a brand manager, if you can. The brand manager is the caretaker of brand health and often hasn’t had the experience of being burned by nonprofits in the past. If you approach the partnership strategically, they could very well be receptive.
• If you do all of the above and the sponsor still refers you to their (often underfunded and fully committed) foundation, they really aren’t seeing a lot of potential for the partnership. Keep in contact, as future projects may be a better fit, but it’s probably better to just move on.
You Don’t Know How to Be a Real Partner
A number of times, we’ve asked nonprofit audiences to define their “dream sponsor.” Inevitably, someone will say, “someone who gives us a lot of money and doesn’t make us work hard for it.” Invariably, this comment is met by a roomful of nods of agreement. Again, this may not be your approach (and we hope it isn’t), but there are a lot of nonprofits out there defining the perfect sponsor as a virtual silent partner.
Managing this perception is about managing their fear, just like the “handout” perception. We suggest that you do all of the above, and add a couple more:
• If you have current sponsors who are achieving a commercial return—that is, changing people’s perceptions and/or behaviors—by all means, use them as case studies. The best way to prove you can be a real partner is to showcase the fact that you are one already.
• Ask your sponsors (current and any former sponsors with whom you parted on amicable terms) for references. In particular, ask them to outline some of the objectives they’ve met through the sponsorship. You get bonus points if they invite potential sponsors to contact them.
They Won’t Be Able to Achieve “Real” Objectives Using Cause Sponsorship
This perception has more to do with a sponsor’s own lack of vision and leverage, but it is certainly something you will have to counteract at one time or another. Again, all of the above strategies will be helpful, but we would add one more.
If you have a potential sponsor that refers to nonprofit sponsorship as “good corporate citizenship,” “giving back to the community,” “warm fuzzies,” or some other related euphemism, you need to dig deeper. These are not real objectives; they are camouflaging the real objectives—for you and for the sponsor. Ask them, “If you are successful at being a good corporate citizen, what does that mean to your staff? Customers? How would it change what they think of you? How they interact with you?” That’s not a hard thing to ask, but the result is that they should tell you about the results they want to achieve—their real objectives.
It Will Be Difficult to End the Relationship If the Sponsor’s Needs Change
From time to time, a sponsor’s needs will change and it will be time to drop a sponsorship and do something else. Nonprofit sponsorships get dropped, too, but they can be so ungraceful about it that it’s scary to contemplate.
We know of nonprofits who have tried to pull rank—going to the chief executive, or even a government minister, to complain about being abandoned by a sponsor—as well as many who threaten to go to the media. A few even do go to the media, which can get really ugly.
Now, what kind of partnership is it when the nonprofit organization is ready to resort to threats of blackmail to continue getting the money? We’ll tell you: one that is going to scare every other sponsor away for a good long time.
We’re sure you would never do something so dastardly to a sponsor you have spent years valuing, but to be sure they know it, we suggest the following:
• From the very start, you need to tell the sponsor—and back it up with actions—that you will do everything you can to assist them in achieving their goals, but that you understand that it needs to meet their strategic needs, and if those needs change, you will understand.
• Ensure you are servicing your sponsors really well. In addition to staying abreast of their sponsorship plans, you should be asking about their forward planning and if any changes will affect the relevance of your organization to their brand. That way, you should know as early as possible if a renewal isn’t on the cards.
• If the sponsorship has high visibility, you should offer to issue a joint media release that positions the split as amicable, based on a change in strategy, and setting you up as a great partner to other sponsors.
• If their exit is really going to hurt, don’t try to convince them to stay—that decision has been made. Instead, ask them to ease the transition. They could pay for you to attend a workshop, secure a consultant to assist you in fine-tuning your offering, or sponsor you for one additional year at a much lower level. Assuming they left because of a change in strategy, they may also be able to provide you with referrals to other sponsors who may be more appropriate.
Your Real Competition and Your Real Edge
With the huge range of nonprofits out there—from local to global, children to aged, education to environment, health to homelessness—it would be very easy to think that sponsors are choosing first to sponsor one or more nonprofits, and then deciding which ones.
Not so! As sponsorship decisions are increasingly driven by brand management teams, you need to understand that they make their decisions based primarily on two things:
1. Brand fit. Does it underpin any of the brand’s values or attributes? Can it achieve a range of objectives?
2. Target market fit. Is it relevant to at least one of the brand’s target markets? Is there scope to provide the target market with a functional or emotional benefit?
What this means is that you are not competing against other nonprofits, but against anything that brand could sponsor, plus advertising, sales and media promotions, online activities, endorsements, and anything else they might do to market the brand.
Before you freak out about the huge amount of largely well-resourced competition, take a deep breath and hear this: there are some things on that list that a nonprofit organization will be able to do better than anyone else.
Nonprofits tend to inspire deeply held passion and admiration in their supporters. The potential for providing a sponsor with an emotional added-value benefit for their customers is outstanding.
One of the major factors for success that we’ve seen over the years is that the more individualized and real you can make the investment, the more relevant it will be—even to people who may not be fervent supporters:
• “Every dollar donated will vaccinate X children from all major childhood diseases.”
• “In 2014, our staff planted over 20,000 native trees with their own hands and donated enough to plant 55,000 more. That’s almost 500 acres and three times as many trees as there are in Central Park!”
• “A $20 donation could pay for the doorknob this family turns every time they walk into their first real home.”
• “We didn’t see a doctor to minimize scarring, we saw Green Plan. They showed us how we can cost-effectively rejuvenate retired mine sites, creating new habitats and dramatically reducing the long-term impact on Australia.”
The biggest thing to keep in mind, however, is that nonprofits—and no one else—can provide a sponsor with an opportunity to make their customers and staff the heroes. Say that to them. It’s very powerful.
Get the Right Advice
We would never say a bad word about fundraisers—a passionate, resourceful bunch working in a highly competitive field. What we will say is that there are not a lot of fundraising workshops, conferences, publications, or other resources that are 100 percent up to date with best-practice sponsorship. It’s a highly specialized, highly changeable industry and just not their core capability.
With that in mind, you need to be careful about where you get your information on corporate sponsorship. You need to be sure to get the information from organizations who do corporate sponsorship—not fundraising—as their core job.
• Workshops. Attend workshops aimed at both for-profits and nonprofits. You need to understand and practice the process, and it’s the same for everyone. Better yet, balance your training between the sponsee side and the sponsor side. It can be very enlightening to understand what sponsors are after from the sponsors’ own mouths.
• Conferences. A nonprofit conference with one session on sponsorship is unlikely to be your best source of cutting-edge information. Go to a conference serving the entire sponsorship industry and attend a range of sessions. You can learn as much from an astute motor racing team as you can from a successful nonprofit organization.
• Associations and publications. Read sponsorship industry publications, subscribe to industry websites and newsletters, and join industry associations. To get you started, a huge range of sponsorship resources are listed in Appendix 2.
• Consultants. If you decide you need strategic or brokering assistance from a consultant, again, try to secure a consultant that works across the range of sponsorship seekers, including nonprofits.
There is nothing stopping you from being a member of fundraising associations or going to nonprofit conferences, as you probably need a range of skills in your job. Just understand that you will probably need to augment those resources with some that are specialized for sponsorship.
Partnership Options
Nonprofits have more options for partnering with sponsors than any other type of sponsee. The most common structures are outlined below, but the key is that any of these can and should be leveraged by the sponsor as if it were a standard sponsorship.
• Cause sponsorship. This is the standard sponsorship structure. A sponsor makes an investment of cash, goods, or services in a nonprofit organization and receives a range of leverageable benefits in return.
• Cause-related marketing (CRM). The sponsor creates a sales promotion whereby it makes a donation every time a customer makes a purchase. For instance, you might buy recycled paper towels, and every time you buy that brand, it donates 10 cents to the Wildlife Conservation Society. There is often, but not always, a flat sponsorship or licensing fee paid to the nonprofit organization, and the total cause-related donation is almost always capped.
• Donation facilitation. This is where a sponsor creates an easy “funnel” for donations, such as Qantas collecting loose change from passengers, in any currency, and donating it to UNICEF, to the tune of millions of dollars.
• Donation matching. This is similar to the above, but the sponsor agrees to match all donations made, often to a capped amount.
The CSR Trap
As corporations move toward corporate social responsibility (CSR), two things have happened:
1. Some corporations have elected not to become more socially responsible in their environmental, workplace, or other practices and instead have elected to write checks to nonprofits.
2. Some nonprofits have positioned writing that check as ticking the CSR “box,” further enabling this flawed take on CSR.
CSR is a measure of how responsible a company is in the manner in which it carries out business and makes money, as well as the sustainability of those measures.
CSR is not a measure of how much money a company spends sponsoring or donating to nonprofits. Sponsoring nonprofits can be very powerful and, if authentic, a big statement about the values of a company and its brands, but it doesn’t work if it’s not authentic. Sponsoring environmental organizations does not undo continuing and unaddressed environmental damage. Sponsoring World Vision does not undo using subcontractors who engage child labor.
If there is an authentic match between a company’s CSR initiatives and what your organization does, they can certainly use the sponsorship to underpin those values. By the same token, if your organization can provide meaningful assistance to them in achieving CSR targets—providing expertise, infrastructure, or other means—then you can connect CSR and sponsorship.
However you look at it, always remember, running a business in an ethical manner and sponsoring your organization are not the same thing. Writing you a check is not CSR.