For many years, businesses have donated money to nonprofit organisations that serve their community. In fact, many large corporations maintain dedicated corporate social responsibility departments whose sole responsibility is to identify charitable agencies with which the company will align. For small and medium business owners corporate sponsorship and giving can be a savvy decision, with many benefits.

Choosing the right sponsorship relationship can broaden your competitive advantage by increasing credibility, image and visibility via sponsoring organisations and events relevant to your target market.

What is sponsorship? Sponsorship is the financial or in-kind support of an organisation, program or event, used primarily to reach specified business goals.  In exchange for a donation, a corporation’s name and logo are included on social media, websites, mailings, advertisements, and other promotional material produced by the nonprofit. In some cases, a large donation may even culminate in property, such as a conference room, garden or computer laboratory being named in honor of the donating corporation.

Sponsorship allows you to efficiently reach specifically targeted niche markets. It is a powerful complement to other marketing programs, and can have a significant influence on customer relations.

So, why should your company be interested in sponsorship? When done well it offers opportunities for distinct marketing and competitive advantages, as well as showing support for your community.

Sponsorship and corporate gift giving offers the possibility of achieving several goals, such as:

1. Increased Visibility

The biggest advantage for businesses that sponsor nonprofit organisations, programs and events is increased visibility within the community. Increased visibility of a company’s name and logo leads to improved brand recognition. An easily recognised brand makes closing sales easier.

2. Image Enhancement to Shape Consumer Attitudes

Often companies are looking to improve how they are perceived by their target audience. Sponsoring organisations, programs and events that appeal to their market can shape buying attitudes and help generate positive attitudes.

3. Driving Sales

Sponsorship geared to driving sales can be an extremely effective promotional tool. This objective allows sponsors to showcase their product.  For example, food and beverage companies often use sponsorship to encourage samplings and sales.

4. PR and Affordable Advertising

Every sponsor is seeking to widen exposure in both electronic and print media. Positive publicity helps promote products/services. Media covering a nonprofit organisation, program or event often includes sponsor names and details. In addition, the kind of media coverage sponsors get is often unaffordable if the company were to purchase it, and if it were available. That is, sponsorship often generates media coverage otherwise not available or accessible to the sponsoring organisation.

5. Differentiating from Competitors

The mere act of sponsoring a nonprofit organisation, program or event, especially an exclusive sponsorship, is a significant way to create competitor differentiation. Your company name has the opportunity to stand above the competition. This is particularly helpful if your company wants to take-on a competitor with a larger marketing budget. Sponsorship allows smaller companies to compete with their industry giants.

6. “Corporate Citizen” Image

Another powerful sponsorship objective allows companies to be viewed as a “good neighbor.” To be seen supporting the community and contributing to its economic, cultural or social development is extremely powerful and creates enormous goodwill.

7. Tax Advantages

Tax laws are complex and seeking professional advice about tax questions is important, but there are tax advantages to corporate gift giving.

8. Employee Engagement and Team Building

Employees take pride in working for organisations that demonstrate moral, ethical and caring behaviours.  When employees work for organisations that give back to their communities, they are more likely to take pride in the organisation and demonstrate engagement with their organisation. Engaged employees are more productive than those who are not.

Some businesses encourage employees to participate in organisations they sponsor. For example, teams of employees participating in a working bee, a group of employees volunteering at a fundraising BBQ or participating in a charity golf day.  These experiences take employees out of the work environment and foster team building.

Does your organisation sponsor anyone?