June 5, 2003

The Value of Corporate Sponsorships

"One of the serious obstacles to the improvement of our race is indiscriminate charity." - Andrew Carnegie (1835-1919)

A few weeks ago, ChevronTexaco discontinued its 63-year sponsorship of the New York Metropolitan Opera's weekly radio broadcasts. The annual cost of the radio sponsorship was a staggering $7 million. The company attributed its decision to "a desire to focus our resources directly with the countries and markets where we do business."

You don't have to be the size of ChevronTexaco to wonder whether sponsorships are an effective allocation of marketing dollars. Sponsorships are defined as payment (in fees, goods or services) in return for the rights to a public association. The day you open your doors for business you can count on requests from a variety of groups - local charities, cultural institutions, community raffles, annual pancake breakfasts and golf tournaments. They are all worthy causes in their own right, making it difficult to choose.

Clients and prospects often ask us to help evaluate which sponsorship requests are "PR worthy." Sponsorships can be valuable long-term brand building tools, but they are not vehicles for getting quick press coverage. Very rarely is a contribution newsworthy enough to get the media interested (unless, of course, it's a $7 million check). Even if the best intentions motivate your organization, creating a publicity event around sponsorship dollars is often seen as quite tacky.

So, with a limited budget and the knowledge that sponsorships are long-term investments, it is important to choose wisely. Some guidelines to consider:

1. Select causes compatible with your organization's objectives and values and make it known that you will support only these. In addition, be specific about what you will not support (e.g., individuals, political campaigns, religious groups, etc.). Indiscriminate giving, a little bit here and a little bit there, rarely helps your organization accumulate long-term good will.

2. Choose reputable organizations that demonstrate measurable impact and achievement. In particular, look for organizations where community support is high and administrative expenses are low. If you are evaluating national charities, go to http://www.charitynavigator.org. To date, the organization has rated 2,300 U.S. charities based on the information in their tax returns

3. If possible, choose a cause or group that allows for employee participation. Having your corporate name and logo on a banner, in a brochure, or on an advertisement is nice but it is not enough. Enthusiastic employees who get involved with a cause are your best PR tools.

Timberland, for example, carefully evaluates sponsorship dollars to ensure they go to organizations dedicated to environmental betterment. In addition, each full-time employee has 40 hours of paid time-off to serve in their community.

Obviously, you don't have to be the size of Timberland to make a difference. But the key to maximizing effectiveness is finding focus. Along the way you may find the media waiting - perhaps there will be a TV camera crew or a newspaper reporter covering an event you've sponsored, and that is great! But if you view it as icing on the cake, not the cake itself, you will not be disappointed.

Best wishes,
Ellen Grosshans