Charities, non-profit organizations, and independent organizations are always in need of funding. Donations given to such institutions are often a large source of their income for operations and causes. There are generally two ways to receive donations – one is through philanthropic means; the other through business partnership or sponsorship.
One versus the other
Philanthropy is generally seen as the first means of giving when it comes to charitable foundations; sponsorship on the other hand, usually comes as an alternative. Although giving is generally thought as the much preferred method of funding; it may come as a surprise to know that sponsorship for non-profit institutions is a more rewarding and productive means of support for both parties.
Corporations typically have two main business reasons for sponsorship; and these are tax savings and public relations. Although any form of help or support generates an overall positive effect, it is mainly through these two reasons why sponsorship is pushed on by businesses.
In terms of satisfying both parties – sponsors get the chance to associate themselves with a charitable institutions and create a chance for them to acquire tax breaks, and at the same time expose their company name to the public. Sponsees, in this case the non-profit organization, are able to increase the level of support given by their current sponsors; and at the same time open new ways in gaining capital.
With philanthropy, the means of exposure and recognition is fairly low in percentage. Usually recognition is through annual reports that generate a little fanfare. Sponsorship, however, gives itself an amount of exposure that highlights a new partnership for the public to see. Through this publicity, the aim for awareness is reached by both sponsor and sponsee.
Some examples where sponsorship thrives in donations and public awareness are the following: A bookstore may donate books to an orphanage and at the same time let the public know about the store to gain customers. A clothing company sponsors specially designed t-shirts for volunteers to wear when there is a charitable event; and through wearing the t-shirt, the company not only helps in donating, but also makes the public aware of their brand.
Sponsorship for charities is basically seen as a win-win partnership. One helps the other through different gains and results. It is also through sponsoring, that charitable institutions have a lighter load on figuring out the means for which to get resources. For example, when an event is sponsored by a corporation, the charity wouldn’t have to worry how to provide the food and drinks needed since it would be covered by the sponsor’s funding.
By supporting through the use of sponsoring, a business uses their budget for advertising and marketing, leaving their funds for philanthropy (if there is ever) alone and untouched. Through using such a budget, the business is able to use the costs as tax-deductibles from their expenses. This way, sponsorship helps in letting the business be cost-efficient.
It should not be seen, however, that philanthropy is a less useful means for support. Donations and funding of this nature is often praised and well-advocated by the public. It is only shown that sponsorship has a more business-side in handling contributions and help to other organizations – where they see it fit to practice a give-and-take method; and see it best to have profit-producing ventures.