5 sponsorship models that work

When exploring opportunities to sponsor, or get involved in a funding partnership, it’s important to know that there is not just one form of sponsorship, and that you need a sponsorship model and approach that fits your business values and culture. Not all businesses fit the traditional sponsorship model of providing money, but there are several different models and combinations that may be better suited to your way of doing business – each with their own benefits. 

This month’s insight piece looks at five models of sponsorship, which we know work, based on some New Zealand examples.

1. Business sponsorship via income contribution

The key with partnerships is tailoring it to your business purpose and value set.  With Flick Electric’s partnership with the Comedy Festival we shared how a comedy show supported a whole new look at the electricity industry, not traditionally known for its innovation and/or customer engagement. The Comedy Festival then showcased by association the disruptive ethos of Flick.

Companies can receive sponsorship credit while providing only a portion of the funds. In the best cases there is an agreed understanding of inputs and ongoing measurement. The best partnerships involve two-way skills transfer, for example the partnership between Hell Pizza and IDEA Services (a subsidiary of IHC), where each learns from the other.

Customers, staff, and wider stakeholders should be considered (and potentially involved) on the ultimate partner segment fit.

2. Supplier selection

Choosing who you do business with, and promoting or advocating their products and services as your consumer choice, is another great way to not only demonstrate what you stand for but to support an organization or initiative without directly giving money. Again, you are demonstrating alignment to your values.

For environmentally conscious purchases, an example could be sourcing  note paper for your office from a business like The Misprint Co., who create notebooks out of waste paper, ultimately reducing water usage in production of the notebooks..

Another example is choosing to use and source locally and ethically, such as using Zoomy, an ethically better option than other ride sharing apps. To take it to the next step you could use a service like Conscious Consumers. They provide an accreditation service that allows businesses to commit to and move to certification for causes important to them. Consumers can then make informed choices on who they purchase or work with based on what the business stands for.

Involve your staff in the selection of key causes and how you will demonstrate tangible results.

3. Employee time

One employee benefit becoming increasingly common is giving a day off each year for employees to give their time to their chosen charity or organisation. This is both great for the employee who can work for companies that see value in giving, and good for the community. Time can be in the form of collection buckets, ocean clean ups, planting trees, through to the board room sharing expertise or a day of marketing planning for a charity. Aligning employee skills to where they add the most value can have a bigger impact

A Generosity NZ June 2017 report noted that Deloitte NZ employees had volunteered more than 12,580 hours in 2016, which represents almost $3M in value.

Engaging employees on the selection of partners to support with their skills is rewarding and contributes to employee engagement.

Employee time can also be pooled to be spent with the company’s partners, which enables a company to build stronger relationships with their charitable partners by having a stronger impact.

4. Employee [Matched] payroll giving

Employee matched payroll giving is where the company matches dollar for dollar of what their employees contribute to charities.

Payroll giving allows an immediate tax deduction for employees, and encourages employees to contribute to the causes they care about. I am always surprised that this is not better promoted by both companies and the IRD due to its efficiency and transparency.

The Spark Foundation 2016 Annual Report shows that where employees select  any of 27,000+ registered charities or 2,600 schools, and donate to these in way of funds, the Foundation will also contribute. Annual donations are matched by the Foundation up to first $500 per person.

Charitable selection can be channeled to intermediary parties, for example Trade Me to One Percent Collective. This allows a greater amount of funds to pre-selected parties. If staff are involved in selecting preferred parties (including from Company sponsorship arrangements) greater funds can be pooled for transformative outcomes.

5. Forming a Charitable Trust or Foundation

A number of Corporates, and / or their major shareholders have set up structures to pool both fund and time contribution. This includes leveraging funds e.g. Spark with Give a Little, and In-kind value from Mediaworks in 2016 with advertising fees in lieu.

Listed Australian software company Atlassian has created the Atlassian Foundation with the vision of helping make the world better. As a company, they contribute 1% of annual profits, 1% of employee time, and 1% of company equity to the foundation”.

The importance of any sponsorship or partnership model is that there is business alignment. With that in mind, no matter what form the partnership takes you will achieve a level of success for your business.  Lawyers Buddle Findlay have a specific Child Health focus, while Karma Cola provide funds and management time to where they source their Cola at 6c per bottle. The NEXT Foundation meanwhile adopt a Private Equity approach to working alongside capable partners who tackle major issues in Education and the Environment.

If you want to explore which partnership model(s) could benefit your business, and which community partners align well with your brand and values, then get in touch today and let’s talk.


Disclosure: www.GiddyUp.net.nz connects business and donors, with strategically aligned community partners. Brian has a beneficial shareholding in Flick Electric and an equity stake in Conscious Consumers.

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InsightsBrian Steele