Let’s get right to the point. Sponsorship and philanthropy are not the same. They are different—very different. Typically, philanthropy is done by individuals, not companies, but some companies still give for the sake of giving expecting nothing in return. Actually, that is philanthropy, especially when it comes to the Canada Revenue Agency. Philanthropy, or a donation by a company, is a gift made to a charity with no expectation of anything in return—no event passes or tickets to a gala, no logo inclusion, banners, tweets, or posts. Nothing! Zilch! Nada! Philanthropy comes from the heart; donations should be altruistic.
Sponsorship, on the other hand, is a business transaction. The sponsor pays/gives the property money. In return, the sponsor receives benefits that will help them make more money, be it through alignment with the property, through sales, brand development, PR/GR, or employee engagement and such. It is a form of marketing, and like buying social, digital, outdoor, TV, or radio; they receive value in return for their investment.
Here are my most recent observations or “beefs.”
- Recently, I was with a brand. They expressed to me that their “investment” with a hospital foundation was not delivering the ROI they had hoped for. They had agreed to a donation and took a tax receipt, but they had wanted an announcement, some fanfare, publicity, and PR. The foundation had agreed to this in a limited way. I told the brand that, if you agree to donate (versus sponsorship), then don’t expect a PR campaign. If they had told the hospital foundation that they wanted a PR campaign, specific exposure, and branding, then the foundation could have agreed or declined the contribution. Brands need to understand that, if they want ROI, they should do a sponsorship deal. If they want to just feel good, promote internally, and contribute to a worthy cause, then they should do so, but not expect ROI.
- Another case I heard was a brand that had bought a sponsorship, but really did not get value. They were complaining about the fact that they had invested $25,000 in a gala sponsorship and just gotten logos, tickets, name mentions, and banners. They had asked for more specific assets, such as a speaking opportunity, opportunity to sample product (a high-end gift for attendees), and content in the quarterly newsletter. They were told they could not have those assets and their “package” was set. They accepted that. I told them it was their problem and fault, not the fault of the charity. Really, the charity was providing maybe $2,000 worth of marketing value and $23,000 in philanthropic contribution, and the brand should get a tax receipt for the $23,000 donation. I said that, alternatively, they should have passed on the opportunity. If you cannot get what you need, don’t buy the product!
- On the property side, I had a real doozy! The organization was getting $5,000 to $50,000 from different brands. In each case, they called the contributions “sponsorships.” There was no real value, but lots of assets—worthless assets such as a logo on the organization’s web site “sponsor page,” banner at the event, logos on banners, etc. Most, if not all, the brands were really there to support the organization and its event. None were looking for any sort of marketing coverage or ROI. They were being philanthropic and wanted to make a difference in the community, and the event was a vehicle for doing so. But the organization insisted that they were providing value and didn’t want to issue tax receipts (too much work, they told me), and because they were contributing to an event versus directly to the organization, it was a sponsorship and not a donation! So, they called them sponsorships and refused to provide tax receipts! I voiced my disbelief and walked away when they clearly had no interest in doing what was right!
Come on folks! We need to understand these are different and treat them accordingly! We need to know when it is philanthropy and when it is sponsorship marketing—and do the right thing!
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