Posted on Aug 18, 2022
Corporate sponsorship is most often a contribution of goods, in-kind services or money given by a company to a non-profit organization to fund a specific project or event. In return for the funding, the corporation becomes a sponsor, which is very similar to becoming an advertiser. The difference is that rather than paying for an ad, the sponsor pays a fee for the privilege of aligning its name and brand with the entity it promotes.
Funding for Projects and Events
Organizations, particularly nonprofit groups, often rely on monetary donations from corporations to fund the various programs and events they produce. The advantage of receiving corporate sponsorship funding is that the organization gets the money it needs and, in turn, typically only has the responsibility of mentioning the sponsor's name through signage and noting the company's support and participation in its promotional materials. In some instances, an organization may also give the sponsor the opportunity to speak, distribute company literature or gain access to the organization's mailing list for advertising purposes.
Corporate sponsorship funding can benefit both the corporation making the financial contribution and the organization receiving the donation through a resulting positive affiliation. For example, an environmentally-aware company that supports an Earth Day celebration at a local school, or a large medical supply company that funds a community health fair, has the opportunity to promote itself as being a good corporate citizen. At the same time, the organization hosting the event gets a boost of credibility by showing it has the support of large and influential companies.
New companies that want to get their name and product in front of the public often choose to do so through corporate sponsorship funding. This approach allows the company to align its brand with an established organization and promote its commitment to the community at the same time. The approach can also help corporations reach a target market. For example, a company that manufactures bowling balls would benefit from sponsoring a large bowling tournament while an office supply store may profit from sponsoring a back-to-school fair. Many corporations chose the types of organizations they fund based on the tie-in to their particular product, industry or market.
In some cases, corporate sponsorship funding can have positive tax implications for the companies making the donation and the organizations receiving the funding. A tax adviser can determine the extent to which a company can deduct its contributions.
Original article: The Advantages of Corporate Sponsorship Funding