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Sponsorship Management

The difference between sponsorship marketing and philanthropy

by Ornella Schillaci
May 15, 2022 - Reading time: 4min30
The difference between sponsorship marketing and philanthropy

Sponsorship is considered as a CSR strategy. But there, a lot of experts disagree. As a matter of fact, some feel that sponsoring strategies resemble more marketing tactics than pure CSR and social impact projects. In this context, it makes sense to incorporate some marketing ideas to effectively sponsor a project, but of course, just like any other project, it might be complex to build the processes and make sure that every thing runs smoothly. To get some insight on this wide topic, we figured that it'd be so much better to have an expert's opinion. That's why we met with Brent Barootes.

Brent Barootes is the president and CEO of the partnership group Sponsorship Specialist, which is a sponsorship marketing consulting firm. He has worked with a lot of Canadian brands, charities, nonprofits to help them strengthening their sponsorship programs, and is also the author of Reality Check - Straight Talk about sponsorship marketing. He met us to discuss marketing and sponsoring for the CSR Connect podcast, you can find the episode here or you can learn more about the topic in the article below.

Optimy: So when we talk about philanthropy, sponsorship and the nation's corporate giving, all those words might seem a bit confusing, like are just synonyms or they're not synonyms. What do you think about how would you how would you define philanthropy and sponsorship, really?

Brent Barootes: It's a great question, and it's an Age-Old situation to try to find and understand the difference between them. The way I look at it: philanthropy is when a business or an individual gives altruistically, it's a gift, it's a warm feeling in their heart. They know they did right. They are helping the mission. And it's all about the mission. That's what philanthropy is about. So I or my company would give to help support the mission, and the mission would then use that money to achieve their goals and objectives. And if I had concerns about the mission, then I may not give them money. It is all about giving and it is looking for nothing in return other than a thank you and maybe a charitable tax receipt.

On the other side, sponsorship or in the full length "sponsorship marketing",'s truly a marketing investment. And that's where a company, not an individual, but a company looks to provide money to that same charity, but they're not looking for the warm feeling inside, necessarily. That may be an offspring of it. But what they're trying to do is achieve a business goal so they may put their name on a building, or they may sponsor a program being run at a women's shelter, or they may sponsor a gala at a fundraising event. When it's truly sponsorship marketing, the goal and objective is to either raise awareness, build brand, drive traffic to the website. These are all marketing terms and objectives and goals. So when they give that money, it's not so much about the charity and the mission. It's about giving the money in order to reach an audience.

At the end, philanthropy is when a person or an individual gives altruistically, they give because they care and they want to help the mission. Sponsorship marketing is when a company gives money or contributes money in exchange to reach that organization's audience to gain commercial benefit.

It's really a marketing strategy that is meant for marketing exposure of the brand that the company represents.

Optimy: Could we understand it as advertising then? Is it is it the same thing or is there a tiny difference that actually make them different and specific?

Brent Barootes: I think there is truly a difference between sponsorship, marketing and advertising. It's a gain, a really great question because it's confused all the time. "Oh, sponsorship, that's advertising. So I'm going to I'm going to sponsor that gala. I'm going to put up a banner."

If you hang a banner, you're right, that's advertising. If you integrate your investment then it's sponsorship. Marketing, advertising is what we call a push medium. It's where a message gets pushed out and the goal is to sell more parts or sell more hamburgers or drive more traffic to the website. That advertising is very intrusive.

In sponsorship, when it's done right, it enhances the experience. It would be maybe you do get the hang the banner, but you also get a table which allows you to bring a bunch of your clients or employees to that event, or that you've got items on the on the silent auction table and you're working that side of it. It's a big event and there's high profile people there and your name's associated and you want to. It's a PR or public relations move.

So sponsorship is an amalgamation of several marketing or communication mediums. So sponsorship would include advertising, probably. If you're sponsoring a sports team, you might buy a record for buying a record at an arena or a football game or whatever.

Optimy: OK, so there are indeed standard practices that can be applied both to sponsorship and advertising like we discuss the banners, for instance. I do agree that sometimes you can feel like it's sponsorship, but it's actually advertising because it's more intrusive and aggressive somehow. But then they can also be sponsorship. But then how can you do to improve build an experience? Like is it generational? Like if you want to build a sponsorship program and you want to target? Would you go on the internet? Would you go social media? Is it still possible to use digitalization and to take advantage of everything that is possible digitally and to actually build a sponsorship program with digital tools?

Brent Barootes: Absolutely. Your sponsorship is that you're going to create digital programs for certain audiences, and you're going to deliver on site experiences for others. And this is what we've seen - and this started before the pandemic, but it's been enhanced dramatically by the pandemic because let's face it, for two years, you couldn't have that gala and have people that it couldn't have that conference and have people at. You had to go online. So sponsorship got pushed like everybody else got pushed into digitizing enormously.

We ran a conference called the Western Sponsorship Conference Congress, and I think it was 12 years ago we ran it digitally. We created a gaming experience. This was 12 years ago, so people could come on and they could play this game, and it was like multiple choice questions. You got 10 questions and how quickly you answered them and how many you got right. Determine your score depending on your score. You got a prize or an option to pick up a prize. But the whole concept behind it was people played this game and they learned information about the sponsorship industry as a 3.2 billion dollar industry, or is it one hundred thousand dollar industry? So we were educating, but the other part that was fully integrated into it was sponsors messages.

And that, from a digital perspective, delivered way better return on investment than hanging a banner at a conference of the three hundred people up. So when you add it, all those values up which everybody took them, it was well over a million dollars. So gain its spend in marketing, but that got people to play and people played it over and over and over and over again. It was it was incredible. So you can go that digitize side. I know that in North America, restaurants you go into due to COVID, you typically don't get a menu anymore. You get a QR code on the tables.

And it was 14 years ago that we focused on QR codes at that conference, talking about their impact in sponsorship and being able to take consumers or fans or donors and get them way more information than putting a piece of paper in front of their place. So the use of digital and technology and  the use of augmented reality is there a lot in sponsorships. Yes, the target audience will determine how you're going to interact and engage and that will make the experience better for that audience. And that's how it becomes sponsorship.

Optimy: Since it's in sponsorship, marketing is something that you can develop to build experiences and relationship also with the audience. Would we say that it's something that is restricted to big brands, big companies that actually have the means, whether it's material or human or financial, to actually build them? Because I'm thinking of small companies, small brands that don't have all these means and all these ideas. Does it mean that if they just turn to logos and banners and more standard ways to sponsorship to sponsor an event, it's not going to work as efficiently?

Brent Barootes: One of the things that I tell small businesses who quite often get involved with a gala event  and they donate a silent auction item is that if "you're going to donate an item, there's a couple of things number one, require. " That the person that ends up with that product at the end of the gala. They paid the highest so forth and so on. You want their name and contact information because you want to be able to follow up. So why don't you get the list of all the people? Or better yet, why don't you make sure that one of your staff is at that event instead of just donating the the item? Have a staff person there so they can be around the table and be able to see what different people are bidding on, and talkto them. The goal is to create experiential opportunities. You don't have to buy a lot of technology as a small business, you don't have to do a lot of those things. But if you are sponsoring a program at the at the Boys and Girls Club, for instance, or you're sponsoring a program for an environmental organization that they're running, then why aren't you tweeting about it? Why aren't you posting on TikTok? Why aren't you sharing the knowledge you're already maybe have a social media person, which is the business owner themselves?

Optimy: But the thing is, right now I can see the marketing point of view and the angle and the fact that you have to build a relationship, a kind of customized experience so that everyone feels involved and understood by the brand. And yes, the sponsorship experience is there and is for real. But how can sponsorship marketing fit into a CSR program since we said that it's mostly about marketing exposure?

Brent Barootes: It's interesting because when you look at a corporate social responsibility program, there's so many dollars there. But if I am a local charity, a local sports team or an international sports team or international charity, if my goals and objectives are business, I want to have a return on investment. Then typically you don't want CSR money, you want marketing money. (...)

Optimy: Does it mean does it mean then that sponsorship in itself or CSR in itself nowadays cannot be 100% altruistic? Is it something like it's all black or white?

Brent Barootes: I don't think it's all black and all white. It can be both. And we see that a lot. (...) When I compare sponsorship to major gift giving, for example, when we do a major gift as an organization, we go out, we talk to the right people. We ultimately make the right ask for the right amount from the right person to the right person. And that typically could be two years, depending on what a major gift is of one organization. A major gift is $1500. It might still take 10 or 20 visits to meet that donor, that individual and understand why they're interested in our charity and why they want to help and how they want to help and all that type of stuff. We don't walk in and say, Hey, can you give me $1500? We cultivate them, we nurture them, we understand them before we make the ask, whether it's for fifteen hundred dollars or fifteen million dollars when we make the major gift ask. We understand that individual that's making the gift in sponsorship. (...)

Optimy: We talked about making employees feel good and their well-being and the fact that they feel engaged within the company because they're actually participating in something good in a good initiative. Do you think that this was this increased during the pandemic and the COVID 19 period? Because we saw a lot of volunteering programs being born because of COVID 19, because people wanted to help. And there are also a lot of researches that showed that, especially younger generations now they do expect their employers and company as their coworkers to get involved  in volunteering activities and corporate giving activities and philanthropic activities in general or sponsorship programs. Do you think that is something that is now a must have for companies to have these CSR philanthropic sponsorship programs within the within the companies?

Brent Barootes: I think absolutely, and I think it existed as as a must have before, but it's even greater now. And when we look at it from a philanthropic side, I mean, you can give money you can give based on your ability to give. And sometimes that's volunteering. That's all I can give, right? And as a company, you know, I watch many companies really abuse the sponsorship process. You know, they greenwashyou know, so that they can be looked upon as an environmentally focused company or a pink washed with breast cancer and those types of things, right? And what consumers see through big time is that type of stuff. (...) If a company is not doing it authentically, then their employees will know it and their consumers will know it. And they will be they will be flushed out really quickly, either by their employees. So the engagement part for employees is huge and always has been. But it's even more so as you identified coming through the pandemic because people wanted something to do, and we're seeing way more digital and online volunteering as opposed to, let's face it, volunteering at the food bank. (...)

Optimy: OK, so it's true that for volunteering, the whole purpose is to see what your employees actually want to make sure that you can just do them, you know, customized volunteering activities they fit, they need and their interests. Is it the same for sponsorship? Like, are there specific fields that are more common to get a sponsor? Which one? Why? I mean, what is so special about them? Do you think in general there are fields that are more common to receive a sponsor?

Brent Baroots: Absolutely a great question, because most people will always say, Oh, sponsorship is that sports thing? You know, it doesn't have anything to do with charity. We can't get sponsorship money in charity. That's people sponsor company, sponsor sport programs. Whether it's international sport, local sport, that's what they sponsor. And it's true that a lot of money goes to in sponsorship money goes to sport. It's a 3.2 billion dollar industry in Canada.(...)

Optimy: Now that we've discussed the difference between philanthropy, sponsorship of the sponsorship is more linked to to marketing. Is there a kind of philanthropic sponsorship or is it like a myth, something that is like a unicorn imaginary doesn't exist? Is there something that we invent to make us feel better or is it actually real?

Brent Barootes: It is real.  It is what philanthropic sponsorship tends to be.

The companyor the organization, let's take a charity, that says, Oh, please be a sponsor of my gala. Here's the package. You're going to get so many seats, you're going to get a banner, you're going to get a logo and I want $10000 or I want $5000. The value isn't there. There is no five thousand dollars worth of value, but they label on a sponsorship. And what happens is that quite often the organizations still give a charitable tax receipt and a marketing receipt. So but that's not legal. The government collects taxes and the government collects taxes from companies that make profits. And if I get a charitable tax receipt, I usually get a credit on my taxes. But if I get a marketing marketing receipt, that means I can write off those expenses as expenses rather than than a charity gift. And it's worth way more to me as a business because I all of a sudden wrote off that $10000 as an expense. Whereas if I made a donation, it's probably only 10 or 15 percent credit that I get. So the $10000 I get credit for fifteen hundred rather than writing off the whole thing. So what I call philanthropic sponsorship is really just a gray area. We've seen this with our clients. There can be a partnership between a charity and a business of which the charity gives X number of dollars philanthropically. And they also provide X number of dollars in sponsorship and that you may call philanthropic sponsorship. But I always refer to philanthropic sponsorship as that sort of gray area where people are. People are calling it sponsorship, and it's really philanthropy for that. (...)

Are they giving because they care? Is that business giving you money because they care and want to help the mission? Or are they giving because they want people to know they're associated with it? (...) true philanthropy is altruistic.

Optimy: The world is constantly changing, in sponsorship too. What would you say the upcoming trends in sponsorship are?

Brent Barootes: I think if I was to pull out my little crystal ball and take a look at what the future holds, I'd say that the trends that we're seeing right now and especially coming out of COVID are (and this is based on Canada more than  internationally because we don't do a lot of international work) is that they will still be altruistic to some extent, but they're going to need a return on that investment. And as a result, they will give more money to fewer organizations. So it's the ones that are going to step up and make a difference to help them achieve their goals, whether that's engaged employees driving traffic to the website, building their brand, all of those things.

Number two is that we're seeing a huge shift in again due to the pandemic, a huge shift into the technology side. And as you pointed out earlier, I mean, your generation, you're not interested in certain things that my generation would have been, but yours is more technologically based and more online and more digital and all those elements. So we're seeing that shift, and that means that you know what? Silent auctions are now available online. You can actually go and sign up on the paper they are. But even if most events now, you're not putting your name and price down on a piece of paper, you're doing it online off of your phone. And now all of a sudden, the medium is larger because somebody that's not actually at the event can still bid on an item. So the charity is going to do better. And if we look at the art sector, whether it's the ballet or the live theater or the opera, they're  in a scenario that they used to have a facility that's five hundred people and they would do 10 shows. And you know, that's that's 5000 people they're reaching on behalf of the sponsor. But during the pandemic, they produced virtual productions. So why can't they hybrid it and now continue to reach the 5000 that are coming to put their problems in the seats in the theater, but also reach another 15000 online?

So the two big things are there's going to be a shift in those dollars, more dollars to less organizations. And number two, that we're going to see the continued growth in the technology and the digital side. I hope that crystal ball prediction works out and and that it that it meets the needs of your audience.

Want to know more about the topic? Listen the complete episode!

Or find out more about sponsorship management with Optimy.

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