With these 6 tips from Karen Lafleur, a Business event management advisor at Desjardins, you'll save yourself from turning the decision-making process into a lottery, by developing eligibility criteria that will serve your business well.
1. Define a framework
You can't say yes to everyone. A guide will make it easier to decide on your sponsorships, while giving you arguments to back up your decisions. Updating it every year, or every 3 years (if you have a number of sponsorships spread out over several years) will ensure optimal efficiency.
Keep it simple, incorporating just a few things:
- Values and market segments - Identifying your personal and business values will help you decide which industries or market segments to sponsor (e.g, sports, education, health, entrepreneurship, sustainable development).
- Criteria - Determine what you want to focus on, and what you'll exclude. Here are some ideas:
- Choose groups or organizations (to keep individual members from approaching you)
- Decide on eligible events (e.g., tournaments, festivals, special evenings, fundraising campaigns)
- List what you won't sponsor (e.g., individuals, products or works, political financing, religious groups)
- Regional needs - Take a look at your needs, and see which ones are a good fit with the industries/market segments you've identified.
- Duration of agreements - Spread major sponsorships over several years.
- Visibility elements - Determine the type of visibility you want, depending on the amount granted (e.g., logo, tickets).
2. Publicize the guide
This is a good way to manage the volume of requests. By posting your sponsorship guidelines on your website or elsewhere, potential applicants will know which sectors you support and what your selection criteria are. You'll be discouraging those who don't meet the criteria from putting their energy into requests that aren't eligible, and saving yourself the time of reviewing them.
3. Create a form
This is very useful, both for you and applicants. "The form should ideally include the industries/market segments you've identified and the eligibility criteria, as well as the documents required to submit a request. That way, an initial screening happens without you having to do anything," says Lafleur
4. Create a follow-up procedure
You want to keep things light, because you have a lot more on your plate than just managing sponsorships. A simple process to keep track of requests received, and those you've approved, as well as the associated visibility, is an important tool for managing the whole sponsorship portfolio.
"It's great to give, but being able to manage the benefits associated with a sponsorship helps businesses strike a balance between the amount they give and the visibility they get out of it," says Lafleur.
5. Make the most of the sponsorship
The goal is to get good visibility based on the amount given, because sponsorships are a great business development strategy, offering access to your target market and the community.
Here a few things to keep in mind to optimize your sponsorship budget:
- Leave some wiggle room - A portion of the amount allocated should be used to promote the sponsorship with promotional items, participation in an activity for networking purposes, and so on.
- Vary the visibility elements - Logo, having your people on site, tickets for an event or speaking opportunity, etc.
- Support a recurring event - Gives you a negotiation strategy and allows you to effectively manage the support given.
6. Reap the tax benefits
Help your community, help yourself--sounds good, doesn't it? When you or your company grants a sponsorship, 100% of the sponsorship amount can be deducted from your taxable income. This deduction will result in tax savings based on your taxation rate.
However, if, in consideration of your sponsorship, you receive goods (e.g., tickets to a show or free meals), the deductible amount would be reduced by the value of the goods. If the goods received as part of the sponsorship are used to generate revenue, they could also be deductible, but with certain restrictions (e.g., you would only be able to deduct 50% for show tickets received in exchange for a sponsorship and given to a client). Remember, though, that when it comes to taxes, it's best to discuss these matters with a specialist to make sure you're following the rules.