Being a corporate sponsor involves donating money, goods or services, or otherwise supporting or underwriting certain costs for a nonprofit or charitable organization. While being a sponsor can raise your company’s image in public and brand you as a good corporate steward, you should know about some of the potential downsides to sponsorship.
Representation of Your Business
Charitable organizations often thank sponsors by displaying the company’s name or logo in association with the event, activity or project being funded. Your business might not have control over the specific way your organization is branded in this process. For example, if your logo is printed on an event banner in the wrong font or color, it can have a negative impact on how your business is recognized and perceived. Diminish the possibility of this outcome by asking to see all promotional materials that have your company name prior to printing and display.
Businesses may become sponsors as an anticipated way to generate cost-effective publicity and advertise the company. While this can be a benefit, the approach is not typically as effective as traditional paid advertising efforts. Sponsorship doesn’t allow you to target your audience, tailor your sales message or determine the timeline for promotion like mainstream advertising does. This can be a disadvantage for a small business that has a limited marketing budget.
Relationship by Association
Unless you have an exclusive sponsorship contract, the organization you support will likely seek other financial sponsors as well. This could result in your business co-sponsoring an event with a competitor, or worse, with another business or organization that isn’t in line with your corporate ideals. For example, if you’re a green, environmentally conscious company sponsoring an event also sponsored by a major chemical-production company, the sponsorship has the potential to inadvertently associate you with the other organization. When considering sponsorship, ask about other sponsors in the mix and the right to be an exclusive sponsor if you see potential conflict.
Use of Funds
If you sponsor something specific, you’re likely to have control over how your money is used. If you make a general sponsorship donation, you may not have much say in how resources are allocated. For example, sponsoring a local youth soccer league and paying a $500 uniform bill lets you know exactly where your donation is used. If you make a $500 general sponsorship donation to that same league with no qualifiers about how the funds are to be used, it could be spent on any expense, or you may not get an accounting of where the money is used. Always ask for a breakdown of funds usage, both to see where your donation goes and to have records for tax-reporting purposes.
- Photo Credit Ingram Publishing/Ingram Publishing/Getty Images
Advantages & Disadvantages of Commercialization in Sports
Today it seems there is hardly any level of sports participation which does not have sponsorship or some variety of commercial venture....
Sports Sponsorship Agreements
The Disadvantages of Sponsorship. ... How to Prepare a Profile for Sports Sponsorship. Before you begin to seek sponsorship there are several...
Definition of In-kind Sponsorship
In-kind sponsorships allow people to help in whatever way they are most able, ... The Disadvantages of Sponsorship. Featured. 6 Ways to...
How to Determine the Benefits of Corporate Sponsorship
The Disadvantages of Sponsorship. Corporate sponsorships enable organizations to successfully conduct their operations and expand their visibility in key growth markets.
The Advantages and Disadvantages of Nonprofit Grants
The Advantages and Disadvantages of Nonprofit Grants. ... seeking corporate sponsorship or making an aggressive fundraising push to members of the local...
How to Quantify & Measure Sponsorship Success
How to Get Sponsors for Your Event; Comments You May Also Like. ... The Disadvantages of Sponsorship; How to Make a Sponsorship...
Advantages & Disadvantages of Advertising
Modern consumers are constantly subjected to advertisements, even while performing routine daily activities like checking email or driving to work. Companies use...
The Disadvantages of TV Advertising
Advantages & Disadvantages of TV Advertising. ... How Corporate Sponsorship Affects TV Programs; How to Write "Watch TV" in Chinese Symbols; The...
Pros & Cons of Merging or Acquiring Another Company
The Disadvantages of Company Mergers. A business merger occurs when two separate companies combine to form one new entity. A merger is...
Advantages and Disadvantages of Sports at Schools
Having sports at school is for the most part viewed as a good thing, because it gives youths opportunities to learn teamwork,...
Advantages & Disadvantages of E-Marketing
Electronic marketing refers to the application of marketing principles and techniques via electronic media and more specifically the Internet. This is the...