So you’ve seen the benefits of sponsoring a local nonprofit organization and you’re enthusiastic about how you can market your business while also supporting an organization in your community. But how much will your sponsorship actually cost?
The truth is, there’s no hard and fast answer to that question.
First sponsorship isn’t always tied to a dollar amount. This means the cost of sponsoring a local nonprofit can vary widely, from an in-kind sponsorship where your cost is in donated time and products/services to six-figure monetary support of programming and events. As long as your budget allows, the sky’s the limit.
While we’ve seen sponsorships ranging from $100 to several thousand dollars, multiple factors impact the cost of local sponsorship. These factors differentiate cost from value, which is the true consideration for most businesses looking at marketing via local sponsorships.
Cost Varies Based on Type of Sponsorship
In-kind sponsorship involves a donation of goods or services; the benefit is generally public recognition by the nonprofit organization. For example, Cary, NC bakery Neomonde donated king cakes to the Historic Interpretations Inc 2016 Mardi Gras Ball and were recognized both in the ball program and in person by the event emcee. Since there is no money spent on this sponsorship level, the cost to your business is in the value of goods or services donated.
Event sponsorship is providing monetary support for a nonprofit event; event sponsorships are generally available in tiered levels to make sponsorship feasible at any budget. The benefits to sponsors increase as tiers increase. Returning to the Historic Interpretations Mardi Gras Ball – for which yours truly is on the organizing committee – the ball has four sponsorship tiers, ranging in cost from $100 to $600. Each sponsorship tier includes event tickets, public recognition, champagne, and a Historic Interpretations keepsake, however the $100 sponsorship includes just two event tickets while the $600 sponsorship includes eight event tickets, crowns for the king and queen of carnival, and $80 worth of raffle tickets for carnival prizes.
Monetary support is exactly what it sounds like: providing money directly to the local nonprofit to support their programs and events at their discretion. The benefits for this type of sponsorship depend in large part on the amount of support you’re providing. Recognition on the organization’s website and in their public relations materials are common; larger donations can also result in events bearing your name.
Cost Varies Based on Sponsorship Benefits
The benefits of a sponsorship have a major impact on its cost. Per the National Council of Nonprofits, in order for a corporate sponsorship to be appropriate and legal, the benefit to the for-profit entity should not outweigh the benefit to the tax-exempt charitable nonprofit. IRS rules state the nonprofit cannot provide more benefit than they are receiving, meaning that $600 Mardi Gras Ball sponsorship cannot cost Historic Interpretations more than $600 to provide.
The sponsorship cannot be worth more than $600 from Historic Interpretations’ perspective, but it can be worth more than that from your perspective. It doesn’t cost Historic Interpretations anything to recognize your business at the event and in their public relations work, but those mentions do have marketing and public relations value for you. If you assign a value of $1 to every event impression and $1 for every 100 media impressions, knowing that average event attendance is 100 people, you’ve got $100 in value gained from event impressions and potentially thousands of dollars in media impressions between local special interest news stories in print, web, and television. Your $600 sponsorship seems cheap by comparison.
Cost Varies Based on Organization Size and Location
An area’s cost of living also impacts operating costs for businesses and nonprofit organizations. Historic Interpretations, a Raleigh, NC organization, offers very low cost sponsorships in comparison with the Brooklyn Historical Society in NYC because Raleigh has considerably lower cost of living than New York City.
The nonprofit’s size is also a factor. While Historic Interpretations and the Brooklyn Historical Society are both local to their specific towns, Historic Interpretations is a much smaller organization with a proportionately smaller operating budget, and their sponsorship needs are also smaller.
Asking the cost of local sponsorships is like asking the cost of attending college. There is no guaranteed formula to let you know how much school will cost you, because the school’s location, size, and status (ivy league, state school, trade school, etc) determine its price.
The size and location of local nonprofits impact the cost of sponsorship, as do the type of sponsorship and associated benefits. Much like with choosing a college, you should research all your local sponsorship options before deciding on the right sponsorship for your business.