As a nonprofit, you’re likely looking for any kind of support you can get from your community. But it’s important to know the differences between types of support like donations and sponsorships so you can assess which is the best option for your organization. In this article, we’ll cover everything you need to know about sponsorship vs. donation, including how to determine which is the best for your needs.
On average, corporations give $21 billion to nonprofits every year. More and more nonprofits are seeking a piece of corporate philanthropy – and understanding the difference between sponsorships vs. donations is the key to getting more.
If you’ve ever wondered the difference between these two philanthropic acts, you aren’t alone! Understanding sponsorships and donations is an important step to building a stronger fundraising strategy.
Read on to learn the difference between donation and sponsorship, including what you need to know about each act.
While both are important types of support nonprofits can receive, the main difference between sponsorships and donations is that sponsorships typically include the giver receiving something in return. For example, sponsorships can include naming rights for buildings and exhibits, advertising on event programs, and other kinds of recognition.
Sponsorships also almost always come from a corporation or other company that benefits from brand recognition. While some donors may also receive public recognition, they don’t necessarily “sponsor” your organization’s programming the same way a company might. They are thus recognized as individuals or as foundations who have supported your cause with a donation.
Now that we’ve covered the difference between these two acts, let’s look deeper at donations. Sure, you know that getting them is important – but do you know all the different types of donations available to you? And do you know the best way to get them?
Don’t worry – we have you covered!
For an in-depth look at nine types of donations available to your organization, check out this blog. Below, we’ll outline three key donation types your organization should strive to collect. We’ll also share best practices to bring in more of each type.
This is the type of donation we think of most often. A one-time donation happens when a donor feels compelled to give but perhaps isn’t sure they want to support your organization with an ongoing gift.
These donations will likely make up a large percentage of your annual contributed income. In order to bring in more, you need to focus on the following:
Recurring donations are automated payments that occur regularly. For example, you might have someone giving $20 a month to your cause, or $240 a year. Someone else might be giving $5 a week, or $260 a year.
These types of donations are incredibly valuable for nonprofits. Recurring donors give 42% more per year than one-time donors. This is because it’s easier to give a little at a time to make a big difference at the end of the year.
Check out how Project WET added recurring giving to their Donorbox donation form. This makes it easy for donors to sign up for a recurring gift. They can even pause, cancel, or change their recurring donation at any time through their Donor Portal.
To get more recurring donations, focus on:
In-kind donations are gifts of goods, property, or services. They benefit your nonprofit by supporting you with necessary supplies and services or financial gain, in the case of property.
In-kind donations are more likely to come from donors who already have a relationship with your organization. To get more in-kind donations, you should try:
While there is some overlap between donations and sponsorships, remember that sponsorships almost always require something in return from a nonprofit.
They typically come from corporations with corporate responsibility departments, although smaller, local companies are still a great source for sponsorships and corporate partnerships.
Below, we’ll share four types of sponsorships your organization can strive for. We’ll share tips to get more sponsorships in the next section.
The first and most common type of sponsorship is financial – meaning a gift of cash. This often comes in the form of event sponsorships and capital campaign sponsorships, where corporations receive naming rights for new properties.
These types of sponsorships benefit organizations by providing a fresh stream of financial support to tackle a certain initiative.
Sometimes corporations will offer to cover the costs of promoting your nonprofit’s event or initiative. This sponsorship comes in the form of cash or in-kind services to cover television, radio, and online promotion costs.
Just like the in-kind donations listed above, corporations can sponsor events or specific initiatives by providing goods, services, or property.
For example, a corporation might offer to sponsor your organization by allowing you to use their venue for free. Another may provide free refreshments for your next service day.
However, corporations choose to provide in-kind sponsorships, know that they are incredibly valuable when it comes to meeting your project budget.
Matching gift campaigns are another way corporations can support your cause through sponsorships.
There are two ways these kinds of sponsorships can play out:
Either way, matching campaign sponsorships bring in more support for your cause.
When it comes to event sponsorships, you’ll get more interested sponsors when you’re clear about the benefits they will receive.
For example, check out how JOYE clearly demonstrates the benefits associated with each of their sponsorship levels right on their Donorbox Events page.
They list several benefits for their gala sponsorships and provide a clear matrix to illustrate what each package gets.
To find sponsors, start with your network. Which corporations do you already have connections with?
Consider asking those who already have a clear interest in your organization, such as:
Pro tip: This is where having a high-quality CRM comes in! With Donorbox CRM, you can easily group supporters by custom qualities, such as employers. You can also add notes to supporter profiles to signify any potential sponsorship connections.
Sometimes the best sponsorships are born out of creativity. Consider how you can think outside of the box when it comes to:
Pro tip: Identifying your sponsors and getting a sense of what they’re most interested in first will allow you to tailor your approach. How can you get creative and offer a compelling sponsorship deal that will win them over?
For more ways to secure corporate sponsorships, check out this blog.
To determine which type of giving is best for your organization, you’ll need to consider the following factors.
The first step is to understand which type of giving works best for your current campaign. For example, if you’re running a year-end campaign, you might benefit from both regular donations and sponsorships in the form of gift matching.
For your next fundraising event, sponsorships can help you cover your expenses so more of your income goes toward serving your mission.
Similar to understanding your campaign needs, your funding needs can help you determine whether you should focus on donations or sponsorships.
If you need large-scale fundraising for your capital campaign, sponsorships can make a big impact on your goal. Connecting with major donors will also be necessary to bring in the funding you need.
Fundraising is so often about forecasting and understanding your organization’s financial sustainability. How much funding do you need to keep operating for a year? For 10 years?
Understanding your financial sustainability can help you determine how much you need in sponsorships and donations. Sponsorships are great for sustaining long-term programming because they can include ongoing support in exchange for public recognition.
Fully understanding the benefits of both sponsorships and donations can help you decide which to focus the bulk of your energy on. Do you need a large, potentially one-time gift that funds a specific project? Or do you need several, potentially smaller gifts that are less restricted in how you use the funds?
Ultimately, a healthy fundraising strategy will include both sponsorships and donations to support your important cause.
At the end of the day, there really isn’t much difference between a sponsor and a donor. A sponsor is typically a corporation that supports a specific event, program, or initiative. A donor can also support specific initiatives but often does so through smaller gifts with fewer requirements.
Whether your organization chooses to focus on sponsorships or donations, Donorbox can help you raise more and manage your supporters more effectively. With industry-leading donation forms, game-changing in-person donation tools like the Donorbox Live™ Kiosk, and a streamlined CRM, Donorbox has helped over 80,000 organizations raise more than $2 billion.
For more fundraising tips and tricks, check out the rest of our Nonprofit Blog. Subscribe to our newsletter to receive the best of the blog in your inbox every month.
Lindsey spent years wearing many hats in the nonprofit world. Whether she was helping arts nonprofits with their messaging and content, planning a fundraising gala, writing an NEA grant proposal, or running a membership program with over 400 members, she learned how to navigate – and appreciate! – the fast-paced world of fundraising. Now, she loves sharing those hard-earned lessons with the Donorbox community.
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Lindsey Baker Bower