Smaller businesses, much like their regional and national counterparts, are aware that supporting community organizations should be a key part of their marketing efforts. For nonprofits and other local organizations, however, learning how to tap into these small businesses as well as the larger regional corporations can be tough. How can you get a local business to write a check, especially a check to sponsor your next event?
Why would a business sponsor your organization’s event and is it possible to secure support from this business for your event every year? Businesses, no matter their size, make contributions in order to:
1. Enhance their company’s reputation and standing in the community.
2. Create long-lasting goodwill for their company.
3. Improve relations with clients and customers.
4. Build employee loyalty within the company.
Usually, all of the reasons listed above apply — not just one or two. Businesses can sponsor events in different ways, including:
- Direct cash.
- Matching or challenge grants.
- In-kind contributions.
Direct cash: Cash gifts can range anywhere from $50 on the local level, to hundreds of thousands of dollars on the statewide or national level. Matching or challenge grants are also cash awards, but your organization is usually required to match the grant with other funds.
Matching or challenge grants: These can provide great incentives for fundraising events. By identifying businesses that will match the funds your organization raises, you can double the value of your individual donors’ contributions. For example, donors who attend your organization’s annual auction might feel compelled to raise their bids if they know their donations will be matched dollar-for-dollar by a local business.
In-kind contributions: Often, these are products or services. A local computer store might donate a laptop for an auction, or a dentist might donate an appointment for teeth whitening. Most of us are used to this kind of contribution for events (auctions, door prizes, etc.). But when you expand your thinking to incorporate products and services we use all the time like:
- Electronics like cell phones, laptops, tablets and TVs
- Lottery ticket packages
- Tickets to sports games
- Restaurant packages
- Autographed music or sports memorabilia
- Exclusive experiences like backstage passes to an upcoming show or private winery tours
- High-end clothing as well as accessories like handbags
- Furniture and Home Accessories
- Entire Homes
These items can bring in a lot of bids at an auction and bidders can find this very attractive.
Volunteers: Loaned executives or employees are another way of contributing to an organization holding a special event. For example, a business may ask its employees to donate time answering phones at the local public radio station for an on-air fundraiser or participate in a run-walk marathon.
Lending: An interesting way to leverage support from a local business is through lending. A business can lend funds to the nonprofit at below-market or even no interest. Borrowing is an effective way for a nonprofit to cover up-front costs for a special event.
Developing a long-term relationship with a corporate sponsor will nurture one of the most assured sources of ongoing funding for your annual event. Corporations excel at connecting themselves with well-respected nonprofits and supporting them year after year. Nonprofits should develop assertive corporate solicitation programs that become a scheduled part of each year’s fundraising efforts, thereby assuring the success of annual events.
Unlocking the treasury
Getting companies to open their wallets and sponsor your event isn’t hard — it just takes work. Ideally, you want to create a pipeline of potential corporate sponsors for your event(s) and continue to work with them throughout the year. Where should your organization look to find corporations or businesses that might be interested in underwriting an event?
Start with your vendor list. Look at every company with whom you do business: banks, insurance agencies, property management companies, utility companies, print shops, travel agencies, online businesses and other service agencies that show up on your operating budget. Anywhere you spend money could be a place to get additional monies, so establish a file for each of these vendors.
Also, look at businesses that complement or mirror your work. For example, if you’re a ski club, establish files for all of the sporting goods stores, physical therapists, sports medicine clinics and doctors, and local health insurance vendors. If you are a food bank, set up files for restaurants, grocery stores, farmers’ markets, nurseries, cookware stores, etc.
Don’t make the mistake of going after only the “big guys” — money that everyone chases. You may or may not add the large corporations that everyone knows about to your organization’s solicitation schedule, but don’t make them the focal point unless they directly connect to your mission. You may be surprised just how much a local businesses will contribute to your fundraising efforts. Every business big or small is fair game.
Maintaining your sponsor list
Once you have created a list of businesses that may donate to your event, develop and maintain a file for each of them. These files (electronic or hard copy) should contain background information on the business, including:
Name of the CEO and/or owner of the business.
- Corporate structure (sole proprietor, LLC, etc.).
- Founding date.
- Headquarter location.
- Correct spelling and titles of all contact individuals (including the charitable giving officer, if there is one).
Most of this information is readily available through the local Chamber of Commerce or the state’s Department of Commerce. In fact, much of this information is available on each businesses’ websites, brochures or letterheads.
- Where they give.
- To whom they give.
- What they give (products or services, matching or challenge grants, loaned executives or employees, cash, etc.).
- How they give (as tax deductions, business expenses, through an established corporate foundation or the regional community foundation, via their marketing or public relations department, etc.).
This information is harder to come by; obtaining it can be a great assignment for a board member or volunteer. Researchers can begin to gather this information by checking businesses’ websites for corporate giving guidelines. If the company does not have a website or the website does not include guidelines (and there are still many small businesses’ websites that don’t offer that kind of information), then have a representative from your organization call the company. Asking questions directly is the most efficient way to gain access to information about a business’ giving tendencies.
Don’t overlook this step. It is important to understand the structure of any company’s giving program so you don’t spend a lot of time developing a request, only to submit it to the wrong place. Most small companies prefer direct giving programs, but make sure that is their modus operandi before moving forward.
Finally, research is key and developing a complete profile for each potential corporate sponsor is essential. Good luck with your sponsorship search!