Fundraising and sponsorship
29 June 2017
Information for clubs about fundraising, sponsorship and grants.
Many sport and recreation clubs operate with limited finances and need to raise additional funds through fundraising, sponsorship or grants. There is often money available through local businesses, charities, sport and recreation governing bodies and government agencies, but clubs and other groups also compete for it.
Appointing a sponsorship, fundraising and grants coordinator
The club should consider appointing a dedicated fundraising person or establishing a fundraising committee. Their role is to:
- decide which of the club’s projects or activities need additional funding
- develop a fundraising plan
- identify potential sources of funds, for example, sponsorship or grants
- write the grant application or sponsorship proposal
- ensure the funds raised are used for the designated purpose
- maintain relationships with donors, grant agencies and sponsors.
What is sponsorship?
Sponsorship is when businesses and companies provide funds, resources or services to a club in return for rights and/or associations with the club. These rights or associations help the business commercially. This may take the form of a logo on a football, signs at an oval, or free advertising in a newsletter.
Sponsorship links a club with a sponsor in a mutually beneficial relationship and it is not just about money. A good sponsor can add considerable value by, for example, becoming the club’s primary promoter. In the longer term, this may be of more value than the sponsorship income initially received.
It can be useful to think of sponsorship in this way: “Don’t ask what your sponsor can do for you, ask what you can do for your sponsor". Remember that donations are different to sponsorships. Businesses or individuals do not expect any commercial advantage in return for their donation.
Types of sponsorship
Marketing sponsorship promotes products and services to very specific target markets or niche markets. Corporate sponsorship is the provision of cash or in-kind services for an independent activity not directly related to the company’s normal business. Often companies sponsor in this manner to develop a positive public perception, to communicate to a defined target market, or to build or maintain a desired image. Philanthropic sponsorship is a donation or a gift from a sponsor who wants little or no return.
Who to approach
- Club members, family and friends. Start locally with your members, friends and relatives. If people know the club and understand what you do, then they are more likely to listen and give the support required. There may be someone in the club who has a small business and is willing to offer sponsorship.
- Local businesses and suppliers. Check with suppliers of sports clothing, food and equipment. Research local businesses and target those who could benefit from a partnership with your club.
- Larger organisations. They may have more resources, but bear in mind they may not have the interest or commitment the club needs. Your club may be too small to attract enough value for their sponsorship. Unless you have a contact, it may be more difficult to approach them as they are often inundated with requests for sponsorship.
Before embarking on a sponsorship drive, the club should identify:
- the type of support, for example, cash or in-kind services
- the types of businesses that could provide appropriate support
- the benefits offered to sponsors
- if members of the club have links with any potential sponsors.
At some stage in the club’s life a sponsorship proposal with need to be prepared. The proposal is an offer to do business. It is extremely important that it is a well-presented and concise business document that contains enough information for a company to understand what they are being offered. Be aware that you are not the only club out there looking for sponsors so make sure your sponsorship proposal stands out from the rest.
Tailor the proposal to the individual needs of the company being approached. Do your homework. Find out as much as you can about the business you are approaching, for example, its desired image, products and services, its corporate objectives. Writing proposals, contacting companies and making your approach can be time-consuming. It is important to decide how much tailoring of the proposal will take place to meet the specific requirements of potential sponsors. Be aware how much time is required per proposal.
Below are examples of typical contents for sponsorship proposals:
- A cover letter. Address the proposal to the most appropriate person in the sponsor’s organisation.
- Overview. Provide an outline of the project and/or the club. What are you asking sponsorship for? What and where does it happen? Relevant statistical information in sponsorship proposals can help the assessor get a picture of the club or event and identify cost benefits. Market demographics define your membership, public and audience. Identify niche markets the club can deliver to, as this makes it easy for a product or company to be matched to a particular audience.
- Objectives. Outline the objectives of the project and/or the club.
- The investment. Outline the funding amount or in-kind support being sought. What is it going to cost the sponsor and for how long, that is,what is the period of the agreement?
- Sponsorship benefits. This is a critical component. Look to include benefits such as naming rights, promotion strategies, signage, media, brand awareness opportunities, articles in newsletters or websites etc. For 99% of companies, media exposure is an important part of sponsorship. Wherever possible outline how you can get radio, TV and newspaper coverage, as well as community access in the sponsorship proposal.
- Target market. Outline who the project is aimed at or provide a membership profile. Identify how it matches the target market of the proposed sponsor or how it could benefit them. A successful outcome is more likely if you tailor the proposal to a specific sponsor.
- Exclusivity. Detail other sponsors and/or supporters of the project or the club. Make sure sponsors are not in competition with each other.
- Servicing the sponsor's needs. Outline how you will cater to their needs. Identify a designated employee or volunteer to be the contact for the sponsor.
- Evaluation strategy. Outline how you plan to evaluate and measure the success of the agreement.
- Conclusion. Summarise the proposal, identify a follow-up procedure, and supply contact details.
Other issues to consider
The following tips will also help improve your proposal:
- provide a clear and attractive cover page featuring the proposed sponsor and the club
- format the document so that it can be read easily, that is, don’t squash all your information onto one page unless you have been asked to
- provide a contents page for larger proposals
- examine additional information and determine whether it is best placed within the body of the document or as an attachment
- number the pages
- provide examples of past programmes, newsletters etc, which show how previous sponsors have been acknowledged.
Finally, don’t do it at the last minute. Give the club and your potential sponsor plenty of time. The assessment, negotiation and planning involved in managing a sponsorship can take a while. Allow plenty of lead-in and planning time.
What is fundraising?
Fundraising is the process that your club undertakes to secure additional funds. It shouldn’t be considered in order to pay for the everyday operational costs of the club. Rather it should fund special activities such as new buildings, special events, overseas team trips, and new programmes or projects.
Raffles, stalls and special functions such as dinners, lunches and dances can be very successful ways to raise money for specific projects, for example, sending the under 16's soccer team to Australia to compete in a competition. Bear in mind that fundraising can be labour-intensive and there is a lot of competition from other community groups who are also relying on community generosity.
Establish a fundraising committee
Form a fundraising committee for the club. Fundraising is not easy and it’s not fair that one person bears the burden of it. Allocate duties within the fundraising committee and agree to meet at regular intervals to decide on activities and monitor progress.
Ten fundraising principles to remember:
- The 80/20 rule applies to fundraising - 80% of your income usually comes from 20% of your supporters. Identify who your supporters are and develop a long-term relationship with them.
- People give to people. Ensure your potential donors know the faces behind the names, understand your cause, and can relate to the purpose of your project. Can you identify some patrons who would be prepared to become the public face of your project? Patrons may be high-profile and respected sports people, business people or other community figures.
- Always say "thank you". Acknowledge donors in numerous ways such as honour boards, annual reports, certificates of appreciation, phone calls and letters from your members.
- Always let people know how much you would like them to give. It makes them feel comfortable and makes you look competent.
- Explain what the donor will receive for their donation, for example, a tax deduction and knowing that they are helping the local community.
- Until you try something, you won’t know whether it will work. Be prepared to test an idea on a small scale and assess its success before going to a lot of expense.
- Try something different. All products go through cycles. Fundraising activities need modifying from time to time. Look at how you can make some simple changes. Your idea might be good, but may need refreshing.
- Do not confuse the donor – keep everything simple, clear and easy to understand.
- Fundraising is not easy. Gather committed volunteers who will support the project through to the end.
- Always tell the truth. Don’t be tempted to make your case stronger than it is.
For many clubs, funds are usually raised through club members and their family and friends. There are many novel ways to raise funds beyond a club raffle and selling chocolates. Think outside the square, and regularly review fundraising activities to ensure you are getting the best value for the time and effort the club is putting in.
The NSW Department for Sport and Recreation has some excellent ideas for club fundraising. We have also provided some great fundraising ideas in the Clubkit resources section.
What are grants?
Grants are funds received from statutory, voluntary or philanthropic agencies established with the primary purpose of giving grants. They give grants to meet their own objectives and strategies, such as government policy, community development, or supporting the local community.
Grants are not the same as sponsorship or fundraising as there are usually strict criteria that an organisation must meet to qualify for one. It is therefore important to complete any application forms correctly with as much detail as has been requested.
Tips for successfully attracting grants
Clubs that are successful in attracting grants usually:
- prepare a yearly calendar of closing dates for all funding sources
- request application forms well before the closing date
- prepare the application in advance
- pay careful attention to the details required and the presentation of the application
- clearly outline the goals and objectives of the project
- describe why the project is needed and support this with facts and figures
- detail the methods used to conduct the project
- indicate the expected outcomes of the project
- consult advisory officers
- submit applications before the closing date.
The most common grant agencies include the government, charitable trusts, foundations and businesses:
- Government. Local and regional councils are most likely to be able to help you at club level. Contact your local regional sports trust (RST) or council to see what they have available.
- Charitable trusts and foundations. Most charitable trusts and foundations provide financial assistance to clubs that can offer the a tax deduction. They will help disadvantaged groups, such as sporting organisations for people with a disability. Checking a directory can determine whether there is a match between the interests of your club and the funding agency. Several grants directories are available in New Zealand.
- Corporate/businesses. Some corporations like AMP and Telecom have established foundations that provide grants for particular causes. These foundations cannot be used to promote the business interests of the corporation, nor can they seek sponsorship benefits like signage and naming rights.
To be successful, applications should be well prepared and clearly written. Grant applications must demonstrate that the project is feasible and meets the appropriate policy goals or priorities of the particular grant agency. Although specific criteria may vary with each grant scheme, most grant applications require similar information:
- contact information
- programme/project description
- brief description of the organisation applying
- programme/project budget
- amount of assistance requested
- all other sources of funding for the project
- how the organisation meets the grant criteria
- guarantee that the programme will proceed and the money received will be spent on the purpose for which it is given
- copies of the latest annual report and audited financial statements.
- CommunityNet Aotearoa is an internet resource for New Zealand communities. It takes a comprehensive look at the different ways local community groups can seek sponsorship, fundraise and apply for grants.
- Philanthropy New Zealand has information on grants available in New Zealand.
- The Funding Information Service has information on available grants as well as useful information about applying.
- The Department of Internal Affairs has a website dedicated to grants available through the Community Organisation Grants Scheme and the Lottery Grants Board.
- The NSW Department for Sport and Recreation has some excellent resources on club sponsorship.
Other resources you can use for your club’s sponsorship, fundraising and grants include: