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What Are the Benefits of Sponsorship?

By Jeremy Laukkonen
Updated May 16, 2024
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There are a variety of different benefits of sponsorship from a business perspective, though the specifics can vary depending on the particular sponsorship package. The main benefits of sponsorship can be categorized based on whether they directly help the sponsoring business or do so indirectly by benefiting the community as a whole. Direct benefits may include increased name or brand recognition and an improved public sentiment towards the business. A business can sometimes benefit indirectly as well if the cause, event, or organization being sponsored has a positive effect on the community. In some cases, there may also be potential tax benefits.

When determining whether to sponsor an event or organization, a business will typically examine the sponsorship package. This is generally a document that outlines the specific benefits of sponsorship to the business. There are often several sponsorship levels, each of which can offer different benefits for corresponding amounts of money. Most of these benefits increase name awareness or help the business to stand out from its competition.

Specific benefits of sponsorship can vary widely depending on what is being sponsored. An organization that produces reports or studies may offer to place the sponsoring business's name on these documents. Events with printed programs or other media may also offer to place the corporate name or logo on these items. Banners may also be available to show that an event has been sponsored by the business in question. A charity golf tournament, for example, may offer the ability to sponsor individual holes, with the business name displayed prominently at the tee boxes.

There are often indirect benefits of sponsorship as well. Many businesses choose to sponsor local groups and activities in order to help improve the community. Local youth sports, community events, and homeless shelters are all ways that a business can invest in its community through sponsorship. This can often help generate business directly through name recognition, but the community building effect can also provide a long term indirect benefit.

Another potential benefit in becoming a sponsor is tax related. If the organization that is being sponsored is a qualifying charity, sponsorship donations may be tax deductible. The laws regarding this differ between areas, though in many cases any other tangible benefits must be taken into account before calculating the tax deduction. This means if any advertising or other benefits were provided in exchange for the sponsorship, the monetary value may need to be subtracted from the sponsorship amount before claiming it as a tax deduction.

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Discussion Comments

By lluviaporos — On Apr 07, 2013

I really like the fact that they acknowledge here that corporate sponsorships can end up indirectly benefiting the company by improving the local community.

People are often factored out of the bottom line when it comes to businesses, but in reality a robust community is going to be able to buy more from your store. It's not even just about name recognition or building brand loyalty.

If you are sponsoring a canned food drive and providing food that helps a person to keep their home through a tough time, that person is going to make a better potential customer than if they lose their home. It's a long term investment but it's worth it.

By irontoenail — On Apr 06, 2013

@Ana1234 - With that said, do make sure you have someone who knows what they're doing look over the application before it goes out. I know when I was a kid my idea of getting sponsorship was to just go and knock on the doors of all the local businesses without any preparation and just ask. Which can actually work, but probably won't and then you've basically burned your bridges with them.

It's better to try and do it right the first time, so, while the kids can definitely figure out how to get sponsorships on their own, they do need some help with putting it all together.

By Ana1234 — On Apr 05, 2013

If you're with a school or another group that has children as members, it's an excellent lesson to get them to put together their sponsorship package themselves, rather than to have you do it for them.

No matter what the event is that they want sponsorship for, they will see it more clearly if they look at it from an outside perspective. Even if it's just for a sport team.

Not to mention, if the sponsorship application really is student-driven, the business will be that much more impressed and willing to acquiesce to their application.

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