Every organization likes to be seen in a good light. Familiarity, a good name, great reviews and of course good turnover are wishes that all organizations strive for. To achieve this, you want to show yourself as an organization, you want to appear involved and you want to be at the heart of society. This way, people will know where to find your organization and only then can you flourish.
What is sponsorship?
Sponsorship means that one party supports another party. This is often not selfless. By showing the name or logo of the sponsor, it quickly becomes clear who the sponsor is. This gives the sponsor more visibility.
An example of this is a football shirt on which the name of the sponsor is clearly visible. This way of working together creates a win-win situation. Organizations, events or individuals are offered financial resources in exchange for marketing. This may involve a one-off gift, but more often it involves long-term contracts.
The difference between sponsorship and a gift or donation
As a sponsor you can always expect something in return. This usually involves displaying the sponsor's name or logo on, for example, a website, posters, publications or clothing. A sponsor has no influence on the operation of the organization he sponsors. Sometimes a main sponsor may impose certain requirements. In addition, main sponsors are offered free tickets or VIP seats, for example.
If there is no quid pro quo, it is called a donation or a gift. It can be very satisfying to help with local initiatives or the local economy without expecting anything in return. It is also possible to make donations to a good cause. This is how you show commitment to people who are having a hard time.
Examples of sponsorship
1. Sponsorship in the form of a financial contribution
The best-known form of sponsorship is in the form of money. This is done in exchange for promotion. Professional football involves a special form. There is a direct financial interest involved. For example, some football clubs rake in millions through their sponsors. This allows them, for example, to purchase a new player.
2. Sponsorship in kind
You can also sponsor in the form of in-kind. For example, events are looking for tables, chairs or fencing. The sponsor can then supply this. The name of the sponsor is then clearly displayed at the event.
A crane or excavator provided free of charge also falls under this form of sponsorship. There is usually a large sign hanging on this machine with the sponsor's name clearly on it.
Some beverage suppliers are willing to lower their prices in exchange for advertising. You can also be a sponsor in this way. The same applies to free services, for example in the form of personnel.
3. Crowdfunding
Through platforms such as Kickstarter, new entrepreneurs can ask for financial support to further develop their ideas. The return for this support is usually not visibility. This makes crowdfunding different from other forms of sponsorship. Yet a sponsor does not do this for nothing. The goal can be to make the investment profitable or it can be used as a marketing tool.
Reputation management in a sponsorship contract
A sponsorship contract is often a long-term contract that can involve a lot of money. It is a good promotion for the sponsor and it shows commitment. Without these sponsorship contracts, events would not be able to take place and sports clubs would struggle. But such a contract also entails risks.
Reputational damage
If the sponsored person, club or organization makes a mistake, there is a chance that the sponsor will be sucked into it. This may cause reputational damage. There are many examples where things went wrong.
For example, Nike sponsors many top athletes. Lance Armstrong was also sponsored by Nike. When this athlete turned out to have played a major role in doping in cycling, this was a big blow for Nike.
It can also happen that there is a mismatch between the sponsor and what it sponsors. For example, McDonald's sponsored the Olympic Games for many years. From the moment the Olympic committee decided that healthy food was more appropriate in sports, McDonald's no longer fit into that picture.
Reputation management
The reputation of your brand or organization you must keep a close eye on. Especially considering that more and more channels are emerging, for example within social media. These can affect your brand name or company name.
Reputation management is the structural monitoring of all reporting that influences how people view your product, company or brand. The goal here is to act as promptly as possible to improve or protect your reputation.
It is therefore important to get a good overview of all messages and publications in which your organization is mentioned. This way you know what is going on and you can act immediately in case of unwanted messages. Reputation management is therefore important for every organization, not only when it comes to sponsorship contracts.
The sponsorship contract
As a sponsor, you may wonder whether you want to take the risk of reputational damage. But don't forget the benefits either.
- Just like with a donation or gift, you receive a tax benefit on sponsorship costs.
- In addition, you show commitment and your brand or organization becomes more visible. It is an efficient form of marketing and may increase sales.
To prevent or limit reputational damage, it is important to ensure a good match between you and the person or organization you want to sponsor. In addition, it is necessary to ensure adequate reputation management.
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