Approximately 97% of not-for-profit organizations in Canada engage in some form of sponsorship program as part of their annual work plan. Sponsorship, on average, accounted for 11.5% of not-for-profit annual revenues in 2017 and net results averaged $57,000 in that year.
Partnerships have similar attributes, but could be characterized as being not financial in nature with respect to the objectives and the outcomes experienced by the involved organizations. Partnerships are also a mainstay of many organizations within the Canadian association community. Partnerships are formed to provide support for advocacy programs, to share the load when it comes to managing specific community needs and to share costs when mutually beneficial initiatives are being pursued.
The point is, almost all not-for-profit organizations engage in sponsorship and partnership activities to improve their fiscal position or to promote strategic initiatives.
In designing a sponsorship program or a partnership arrangement, there are always many factors to consider. Possibly the most important one is that each such agreement is unique and you and your organization need to recognize both the unique components of each arrangement and make necessary adjustments. Among the many considerations to be managed, there are three factors that remain consistent for any partnership or sponsorship arrangement to allow your organization to have a solid foundation. This foundation will allow the arrangement to be successful and possibly create some form of long-term benefit.
Those three considerations include:
- Carefully defining your objective in entering into this arrangement;
- Knowing, in some detail, the objectives of the sponsor or partner organization(s), and;
- Defining the minimum and maximum that you are willing to accept in order to move forward with the agreement.
Defining your objectives may sound obvious, but so many organizations initiate a sponsorship program or a partnership arrangement without having a specific idea of what it is they are trying to achieve and what they have that would be of value to a second party. If you don’t take the time to analyze your own expectations, how are you going to gauge success? Without setting your objectives relative to revenue, number of sponsors, length of commitment, profile of sponsor, etcetera, you can easily fool yourself into thinking that you are successful, when really you are not generating sufficient revenue to justify having a sponsorship initiative.
To engage potential sponsors, you also need to be very aware of what you have that may be of interest and how willing or able you are to part with or share that information with any particular sponsor or partner. If your board of directors is squeamish about sharing association data (i.e. names and addresses of members), renaming events or awards, or about offering exclusive access to segments of your membership in return for sponsorship, you need to know that at the outset of a campaign so you can protect the integrity of the organization and your own professional integrity. Those may seem like easy decisions, but they are complicated and complex decisions that can change quickly based on the composition of your board of directors. It’s worthwhile to frequently circle back with your board to ensure they are onside with your approach or sponsor.
The same can be said for partnerships, which may not involve money, but always involve capital. What do you want from the partner and what do you have to give them? Is there more than one partner that you want to involve and do those partners have good relationships or are you going to be acting as a referee? How effective is any particular partner going to be in helping you to achieve your objectives?
Doing some research on your potential partner or sponsor is also very important. Knowing their objectives will allow you to determine the extent to which a particular company or organization is a good fit with your own organization. Sometimes, you are better for the partner than they are for you and knowing that at the outset can temper the level of involvement that you are willing to commit to and the number of resources you will contribute. It will also help you define the minimum contribution you are willing to accept or the benefits you are willing to make available to a sponsor. The more you know about the person or the company you are negotiating with, the better able you will be to identify what assets you have that they value and the better you will be able to negotiate what it is that you need from them to make the arrangement a success.
Being able to enter discussions with a potential partner or sponsor knowing exactly what you have to work with makes your job easier and increases the potential for a successful outcome for your organization. Board of directors will often give a direction that sounds something like this, “I think we should get a sponsor for that (fill in the blank with the name of an association asset).” If there isn’t a detailed discussion and determination of the value of that asset, you can almost guarantee that the perceived value of that asset among a 10-person board of directors will vary significantly. This is particularly true when it comes to sensitive, high-profile components of your organization or elements that exist in any association, despite the notion that yours is unique (such as the ‘Member of the Year’ award that every board believes is worth $1 million to potential sponsors!).
This is why it is always best for you to know the expectations of your board early in the sponsorship process. This discussion can help establish your priorities, manage expectations and help you develop your side of the sponsorship program (what you are giving to the sponsor). In a partnership scenario, this discussion allows for the board of directors to identify its priorities relative to advocacy initiatives or joint programs and is very valuable in determining which relationships are must-haves and which are nice to have, but not at any cost.
In the end, relationships are the key and your ability to develop those relationships can be greatly enhanced by knowing the expectations of your board, the results it wants to achieve and the compromises its willing to accept. Knowing the same information about your partner or potential sponsor will help you to achieve a winning outcome for both parties. Sponsorships and partnerships will continue to be important to not-for-profit organizations and having a consistent approach will make for a consistent decision-making process.
Ken is President of Delta6 Consulting. He has over 30 years of leadership experience in the not-for-profit sector and he continues to be excited with the prospect of helping organizations exceed their expectations. Contact Ken at [email protected], @cousineauken on Twitter, kcousineau17 on Instagram or at www.delta6.org.