 Corporate Social
Responsibility Best Practices
Philanthropy vs. Sponsorship What Gives?
By Debra Kent Faulk
Published: January 2009
An always interesting debate is the difference between
corporate philanthropy and corporate sponsorship. Bring
up this topic in marketing circles and you will play
witness to the confusion that exists between the two.
Historically, philanthropy was managed by the community
investment department or corporate foundation and was
altruistic in nature. A philanthropic activity — such as
the act of donating money, goods, services, time, and/or
effort — was intended to support a socially beneficial
cause without financial or material reward to the donor.
In contrast, sponsorship was the responsibility of the
marketing department and the objectives directly linked
to marketing goals, such as brand awareness and product
sales. The basic purpose of company sponsorship, as
distinct from philanthropy, is that the company expects
some kind of marketing opportunity as a result of their
support; generally in the form of advertising or
publicity in connection to the sponsored event.
The line between philanthropy and sponsorship has begun
to blur. As it exists today, corporate philanthropy has
become, in many ways, a compromise or a hybrid of the
two. During the past decade, the majority of corporate
dollars going to nonprofit groups have come from the
marketing rather than philanthropic budgets. The
relationship is moving from “grantor-grantee” to one in
which projects are set up to benefit both the company
and the partnering nonprofit organization.
No matter what you call it or how you structure it,
corporate partnerships with nonprofit organizations must
be bi-directional. That is, both sides need to be very
clear and honest about what they are looking for in a
relationship and to help each other achieve those
explicit goals.
Before these goals can be reached, it’s important to
take a step back and understand the differences between
philanthropy and sponsorship at a very basic level. It
is important to understand the basic tenets of each
application, because only then can you develop sound and
effective philanthropic and sponsor programs for your
own business.
The following chart, from The Sponsorship Report, is a
good starting point to address the distinct aspects of
philanthropy versus marketing:
| |
Sponsorship |
Philanthropy |
|
Objective |
To sell more
products/services; to increase positive awareness
in markets and among distant stakeholders.
|
To be a good corporate
citizen; to enhance the corporate image with
closest stakeholders. |
|
Partner / Recipient |
Events; teams; arts or
cultural organizations, projects, programs.
|
Typically
cause-related, but can also be cultural, artistic,
or sports- related. Funding may be designated for
a project, program or operating budgets. |
|
Funding Source |
Typically from
marketing, advertising, or communications budgets. |
From charitable
donations or philanthropy budgets. |
|
Accounting |
A full business
expense, like promotional printing or media
placement expenses. |
As a result of
write-offs, limited to 75% of net income.
Accounting/tax considerations less likely to
influence the way a company designates funding.
|
|
Publicity |
Highly public. |
Generally, little
widespread fanfare. |
|
Where the money goes … |
Sports get the lion’s
share of the sponsorship dollars, likely more than
50%. |
Education, social
services, and health sectors get 75% of charitable
donations. |
Debra Kent Faulk is
principal of DKF Connects, a socially conscious
marketing services firm specializing in public
relations, social marketing, and strategic partnerships.
For more information, call (813) 258-2599 or visit
www.DKFconnects.com.
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