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Corporate fundraising in the small shop: Common misconceptions

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Sponsorship and cause marketing are essential components of any corporate fundraising strategy. If you aren’t doing sponsorship and cause marketing as part of your fundraising plan, you should be!

The small shop, defined as less than three fundraisers or under $2 million in revenue, is a particularly interesting and challenging environment to do corporate fundraising. In part two of this series, we're going to look at some tactics, campaigns and strategies for corporate fundraising in the small shop. Before we do that though, it's important that we consider some of the mistaken beliefs about corporate fundraising that could be holding you back.

Here are some of the most common misconceptions I see when working with small shops in building a corporate development strategy.

Misconception #1: Seeing companies as a cash cow

When I’m working with small shops I find that their boards focus heavily on sponsorship and corporate philanthropy as the main source of revenue generation. The typical justification for this view is that “companies have lots of money” or that “company X gives away a ton of money every year.” It can be perceived as easier to ask companies for money than people.

The truth is, companies invest money in charities - but always to achieve a certain aim. Even if your request is small, your prospect will demand a return on their investment and, in some cases, small requests will be ignored by the large company because they don't offer a big enough impact.

Should you be approaching companies for money? Absolutely! But not at the expense of your other forms of fundraising and never with the assumption that a successful application will have a lottery-like impact on your charity.

Misconception #2: Corporate philanthropy is the best source of revenue

I see a major emphasis by most small shops on Corporate Social Responsibility (CSR) grants as the main focus for their revenue goals in the corporate space. CSR programs operate much like foundation grants and can feel much like traditional philanthropy. The problem with focusing just on CSR is that you miss out on the unrestricted revenue of sponsorship and the brand building power of cause marketing.

CSR is highly competitive and only represents one stream of corporate fundraising. You should definitely have a CSR strategy but not to the exclusion of the other, more lucrative types of corporate development. Make sure you have a sponsorship and cause marketing strategy as well.

Misconception #3: We don’t have an audience

This stems from the belief that in order to attract sponsors to an event or campaign, you need to have 10,000 people present. Think more about who attends your events instead of how many. I have worked with charities running events that attract 100 people or less. These charities were convinced that they didn’t have an audience to attract sponsors and so they never pursued it.

In one case, after some analysis we determined that all 100 people at an event were young professionals in a major city. What did this group have in common? An above average income and a desire to buy a new house. One hundred warm prospects, all looking to buy $500,000 homes, is an incredibly valuable asset to real estate companies, lawyers and accountants...and that’s who we went to for sponsorship.

Instead of focusing on the number of attendees, think about who is coming to your events, what they care about and who wants to market to them.

Misconception #4: Companies just want logo placement

Putting a company logo on your website can be worth a few pennies up to a few dollars for 1,000 views...if you’re lucky! Logo placement has value to some companies but for most in the private sector, sponsorship and cause marketing are ways for them to find and engage their customers.

Most of the sponsorship agreements that I negotiate involve logo placement in some way but it’s usually a secondary part of the deal. Most of the negotiation is focused on product placement, speaking opportunities, media opportunities, social media campaigns, naming rights and growing the company's database. They want people to engage with their brand, not just see their logo.

It's important to think of ways that go beyond logo placement, where you can connect your audience to your sponsors in meaningful ways and then build your corporate sponsorship strategy around that.

Misconception #5: The sponsorship package is your most important sales tool

I have heard stories from clients and colleagues that they have created and recreated 15 or even 20 drafts of a sponsorship package before it’s sent to a prospect. The package has gone back and forth between staff and the board and a committee, each time with a small change, or added sponsorship level which triggers a new debate and another review.

What these organizations aren't realizing is that the sponsorship package doesn’t sell sponsorship. People sell sponsorship! What you’ve written on page six of a 10-page package doesn’t matter if all the sponsor wants is a speaking opportunity and product placement. How many free tickets they get to your AGM is of little importance if all they want is to run a social media campaign in partnership with your organization.

This approach to writing and rewriting a sponsorship package is rooted in the belief that if a proposal includes absolutely everything you have to offer, that every prospect you approach will see something of value. The truth is, very few prospects will even read your proposal. Those that do will probably not read the entire package - unless you’ve customized it for them after a few meetings.

What should you do instead? Leave the proposal at the office and go and talk to your prospects. Ask them what they value, how they want to engage your audience and what they are willing to pay for...then head back to the office and build them a custom package based on their needs.

Misconception #6: Corporate fundraising is for big shops only

Nothing could be further from the truth! Small shops have boards packed with passionate people who are willing to make introductions. Small shops are in tune with the needs of their program users, what their donors want, who their events attract and who values their brand. These qualities of a small shop can be incredibly appealing to corporations.

Knowing the power of your brand and having a loyal following, regardless of the size, is a powerful asset and one that you can lend to companies so they can build their own brands. When I moved from Toronto to a smaller city, with the same organization, I had a much easier time getting meetings with local companies. The transaction size was smaller but I was able to activate those sponsorship agreements in a far more meaningful way. Those corporate partners stuck with that charity through some tough times and are still people I consider friends many years later.

Misconception #7: Ignoring cause marketing

Ignoring cause marketing isn’t technically a misconception but it is a perfect segue for part two of this series. CSR is one element of corporate fundraising, sponsorship is another but what about cause marketing? This is often missing from the corporate development strategy of organizations of all sizes, but even more so from the small shop.

In part two, we'll discuss actionable, field tested, cause marketing and sponsorship strategies designed with the small shop in mind.

Chris Baylis is a sponsorship, cause marketing and corporate fundraising expert. Chris has managed the entire spectrum of the sponsorship process, raising millions of dollars for charities, events, associations and not for profits and is a board member of the Association of Fundraising Professionals. Connect with Chris via The Sponsorship Collective, or on Twitter and LinkedIn.

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An awesome read. Seeing how this article points out the common belief misconceptions about Corporate Fundraising is spot on, provides a sense of relief that non profits reading it will now have a better chance of setting far more effective strategic fundraising ideas that will work.
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Appreciated the comment about events of all sizes and looking forward to more wise words on cause marketing. Thanks!
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JB, Thanks for the kind words! Glad you enjoyed it.

~Chris Baylis
Sponsorship Collective
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Brilliant article! Another way of overcoming these misconceptions is to recognize charities are a "business" type just as restaurants or others are business types. Businesses "collaborate" for the greater good... if both parties have something of value to offer why not get out there... tell your story and listen to theirs!
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Nigel, agree completely! If a charity wants to enter the realm of marketing and business development (which is what sponsorship and cause marketing are) then they have to be ready for all that it entails. For better or for worse, the cause takes on a different role in these types of conversations.

~Chris Baylis
Sponsorship Collective
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