For many clubs, sponsorship is fundamental and can be the financial backbone of the club. Sponsorship is a mutually beneficial business relationship between two parties, the business (sponsor) and the club (sponsored).

Sponsorship may be in the form of cash, donated goods and services or access to the resources or staff of the sponsor. It must be remembered that a sponsorship differs from a donation. A donation involves an individual or group donating money to a club to recognise the work they do or for other personal or philanthropic reasons. A sponsorship is not a donation.

A sponsorship involves the sale of assets from the sponsored to the sponsor agreed upon between the two parties. These assets cane be sold for either monetary investment from a sponsor or for goods representing value in kind. Clubs should establish the value and worth of their assets before marketing available proposals to potential supporting organisations.

a) Motivations of sponsors

  • Publicity – Sponsors often benefit from complimentary media coverage and publicity.
  • Improved customer relations – Sponsorship allows sponsors to ‘add value’ to relationships with their customers. This can be in the form of free tickets or sponsorship of a free special event for the entire community.
  • Sale of product or services at the event – Special events can provide a venue for trailing or selling a product or service. Sales promotions such as redeemable coupons or sales brochures can also be distributed at an event.
  • Increased employee morale – Sponsorship of an event, program or activity can include an opportunity for a company to provide certain perks for employees, such as free tickets, guest participation or an opportunity to host VIP guests. Company employees may even become involved as volunteers.
  • Opportunity to be seen as a good corporate citizen – More and more companies are investing in their local communities to enhance their profile and because they want to give something back to the community in which they operate.
  • Economic development – Most companies understand that a healthy community is good for business. A well-run special event, activity or program can contribute to the quality of life in a community and provide flow-on economic benefits.

b) What do Sponsors seek?

Today, sponsors are seeking more than just some free tickets and t-shirts. Increasingly, they are seeking to ‘own’ an event, program or activity and be perceived as an integral part of it, through a long-term association. This is not an attempt at a take-over; it is in response to the increasing communications and sponsorship clutter that is growing in the marketplace.

What opportunities are most sponsorable?

  • Major events, competitions and activities
  • Top teams
  • Development programs
  • Equipment or infrastructure

Buildings, individuals and administration activities are the least favoured sponsorable activities, as they are not really newsworthy or exciting. The exception for this is major naming rights to an entire sports pavilion or building. Generally these activities are better used as the goal of a fundraising campaign.

c) How does my Club secure sponsorship?

There is no easy path to attaining the goal of successful sponsorship. You and your club must be prepared to invest a great deal of time and energy, but persistence, thoroughness and professionalism will pay off.

Soliciting a corporate sponsor is a systematic process:

  1. Evaluate the opportunity (event, program, activity, equipment or infrastructure)
  2. Develop a sponsorship plan
  3. Define the sponsor opportunities
  4. Identify potential sponsors
  5. Research potential sponsors
  6. Prepare the sponsorship proposal and present
  7. Follow up on the proposal
  8. Sign a formal agreement

The time required to complete these steps and the formality with which they are conducted will vary considerably but this basic plan of action will work in almost any situation.

Lead time is critical. Most major sponsors will want 12 months lead time to successfully plan and budget for a partnership, although regional offices or branches will usually have a discretionary budget for smaller sponsorships, requiring less lead time.

d) Evaluate the Opportunity

Before beginning the search for a sponsor, take a long, hard, objective look at the opportunity (event, activity, program, equipment or infrastructure). For instance, if it’s an event, is it a quality event? Is it well planned? Is it new, creative, exciting, or fun? Are there any existing or aspiring stars involved? Who will attend? Will it attract media coverage? In other words, is it a ‘sponsorable’ event? How could a sponsor or number of sponsors enhance the event? What is needed for the event in terms of money, supplies, services, volunteers and so on? Could one sponsor provide all these things or is there room for several sponsors? (If so, avoid conflicts with other sponsors of your sport at a national level or other regions in the same category).

e) Define Sponsor Opportunities

Once you have determined that an opportunity is sponsorable and have prepared a sponsorship plan, you will need to develop a package of tangible sponsor benefits. Try to ascribe a dollar value to certain things if you can, such as the equivalent value of paid advertising exposure from the opportunity would be worth.
Be aware of what sponsors seek. For instance:

  • Is there opportunity for the sponsor to promote the company’s product or service?
  • Maybe the potential sponsor’s top priority is exposure
  • Will the sponsorship opportunity attract media coverage?
  • Where and how much?
  • What other exposure could they get: t-shirts; tickets; banners; signage; the sponsor’s logo on posters, fliers and other printed material and the club’s online platforms?
  • How else can you add value?
  • Is category (industry sector) exclusivity desirable?

Is there an opportunity for the corporate sponsor’s employees to get involved? A large corporation may be a prime source of volunteers, and company involvement could be good for employee morale.

f) Identify Potential Sponsors

Who should you approach for sponsorship? Should it be a small local business or a national corporation, a radio station or a bank, an insurance agency or a small local store?

Every company you do business with is a potential sponsor – but not every company is a potential sponsor for every opportunity. Much time and energy can be wasted by preparing a sponsorship proposal and sending it out randomly in the hope that someone will be interested. It is more productive to identify a list of companies that ‘fit’ the opportunity and the sponsorship, and solicit from that list.

Be careful that the sponsors aren’t in competition with each other, eg. asking KFC and McDonalds or Coca Cola and Pepsi to sponsor an event together is a bad move.

For events consider the type and size of the event:

  • Who is the target audience and what do you know about them?
  • At what time of the year is the event to be held?
  • What is the estimated attendance?
  • What opportunities exist for sponsor exposure and involvement?
  • What opportunities are there for marketing extensions, such as access to your membership base? (Beware of the restraints of the Privacy Act)

What is needed from the sponsor? Don’t overlook sponsorship by way of in-kind products and services (like travel). It can be just as valuable as cash if it offsets your costs.

With these questions in mind, you should be able to compile a list of companies that appear to ‘fit’ an opportunity based on their own target markets and company objectives.

g) Researching the Potential Sponsor

Before approaching a potential sponsor, it is wise to conduct a little research to learn more about their business:

  • What is their company philosophy?
  • Do they have a sponsorship budget?
  • When is their budget established?
  • What types of sponsorships have they undertaken in the past?
  • Have they been in the news lately?
  • Look at trends in the potential sponsor’s industry.
  • Who buys and uses their product or service?
  • What is their advertising strategy?
  • What are their corporate goals in terms of image enhancement, publicity, customer relations and economic development?
  • Who makes sponsorship decisions?

Major corporations receive hundreds of requests for sponsorships every year. The sponsor seeker who has taken the time to gather more specific information about a potential sponsor will have an advantage over others competing for limited amount of sponsorship resources.

If the company is local, the task will probably be simpler. You might require more time and energy, however, to gather facts about a large national corporation. Contact them and ask for a copy of their annual report or refer to the relevant person in charge of sponsorship.

Network thoroughly, especially at a local level. Get to know your local business people and ask about their sponsorship policies in informal gatherings.

Remember the old adage: if you want money, ask for advice; and if you want advice, ask for money!

h) Sponsorship Proposal

You should now have enough information and ideas to prepare a sponsorship package for each potential sponsor. The opportunity may be suited to one exclusive sponsor or any number of co-sponsors, in-kind sponsors or media sponsors.

You should develop a sponsorship package for each desired sponsor and write a formal sponsorship proposal. Keep it brief – no more than five to six pages. Remember, the purpose of a proposal is twofold: to avoid a ‘no’ and to secure a meeting. There is no such thing as a perfect proposal, but the following format works:

(i) Executive Summary

An executive summary at the front of the proposal should briefly describe the opportunity, the sponsor opportunities or benefits, the sponsor investment and when a decision is needed.

(ii) Introduction

If the company is unfamiliar with your organisation, a simple introduction may be necessary. You might also give some background about the opportunity and how it came about.

(iii) Description of the opportunity

An event, program or activity should be described in detail, including the date, time, location, past attendance figures and target audience. State your goals for the event. Include information from past events, including news clippings. For Equipment or Infrastructure describe what it is, where and why it is used and how effective it is/will be.

(iv) Sponsorship Investment

This section should include a detailed outline of what you are requesting of the sponsor – cash, product, prizes, advertising/promotion, services or expertise. Always include a value. Make it realistic to cover your costs and to make a profit, bearing in mind that what you ask from the sponsor must be relative to the value of the benefits you are offering. Never undersell and risk running at a loss.

(v) Sponsor benefits

Clearly outline all sponsor opportunities and benefits. Include intangible benefits such as enhanced image or increased public awareness. Wherever possible, quantify the returns.

(vi) Deadline for decision

Clearly state the deadline for the company’s final response and your own contact details. Expect a response within 10 days or follow up yourself by phone. Offer to meet and discuss the proposition.

(vii) Appendices

Include support materials such as your sponsorship plan and brief budget, photographs, artwork or diagrams where appropriate, letters of support or recommendation, old newspaper clippings and programs where applicable; anything that you think might enhance your proposal.

The proposal should state clearly the type of sponsorship. Is it an exclusive sponsorship? In order to make a wise business decision, the company may need to know what other types of corporate involvement you are planning.

LSV has a range of photographic resources and template designs that could assist in making your proposal stand out from the crowd. Contact LSV’s Communications and Partnerships team for a copy of the LSV Brand Guidelines.

Remember:

  • All sponsors need time to review proposals and make decisions. Allow plenty of lead time (three to twelve months depending on the opportunity)
  • The proposal you may eventually sign up will probably be different from the one you went in with. State clearly that you are prepared to be flexible to accommodate their specific marketing needs
  • The content and appearance of the proposal is of utmost importance, but don’t go overboard. A proposal that stands out has a better chance of being read and not just put in the decline heap. Today’s technology makes it easy to produce professional looking documents for minimal cost
  • Proposals for exclusive sponsorship should never be sent to two companies at the same time (especially in the same industry!) What if they both accept? Word gets around and your club and proposal risks being devalued
  • If you are rejected, try not to be discouraged – find out why and keep trying

i) The Five Essentials of Sponsorship Proposals

  1. Proposal must show value for money
  2. Proposal must give consideration to the target company’s philosophies and objectives
  3. Proposal must be detailed, accurate and comprehensive.
  4. Proposal should look as good as possible without going overboard
  5. Amount of money required must be within realistic guidelines

There is an element of good luck involved in securing sponsorship – finding the right window of opportunity with the right company at the right time. In the long run, persistence, professionalism and a genuine desire to make that sponsor part of your team will pay off.

j) Sponsorship Agreement

Once terms have been agreed, they should be acknowledged in some way by both parties. This can be as simple as a letter of intent for small sponsorships. For anything over say $5,000, a written document spelling out exactly what is expected of both parties is recommended.

k) Keeping Your Sponsor

Securing a sponsor is only the start. Event sponsors add another dimension of responsibility to the organisation planning the event. Additional effort is required to coordinate the sponsor functions and the sponsor becomes a second ‘audience’ that must be satisfied with the result.

Keeping sponsors is as important as finding them. Follow the sponsorship implementation with a thorough evaluation (agree on a timeline with the sponsor), quantifying the benefits and where possible including copies of any media coverage. For events, programs or activities, mementos such as t-shirts, photos or a video are an inexpensive touch that sponsors really appreciate.

Never think that because your sponsors are commercial they are out to exploit you. They have decided to be your sponsorship partner because you represent good value, the partnership demonstrates shared values, and that they are good corporate citizens. Sponsorships can also be a means of communicating the sponsor’s messages to your target audience. Always remember that you and your sponsors are living and working in the same community. You have a lot to
offer each other.

References

SLSA Sponsorship Policy
https://members.sls.com.au/members/document_library/1/media/948

Last modified: 13 July 2023