Sponsorship pricing can be a thorny issue. And with the growing complexity of npo/corporate partnerships, the task is not getting any easier. In this two-part series, we’ll explore pricing for the sponsorship-seeking organization.

At the outset, let me clarify where I stand on pricing. My preferred approach is not “What the market will bear”. (But I do think it is enormously important for sponsorship-seekers to know what others are charging for similar benefits in similar situations.) “Value for money” is where I come from – with a sharp eye on the long-term. In an earlier article, we explored the importance of building an inventory of benefits which your organization can potentially offer to a corporate sponsor. Potentially here is a key word. When you start to list the variety of benefits you have available, you want to stretch your imagination, always keeping in mind that you will not necessarily offer every benefit you identify to every – or even any – corporate sponsor.

You may not, for example, be prepared to share all your various mailing lists (donors, inquiries, prospects) with a corporate sponsor. But you do want to recognize that a mailing list is one of your valuable assets that belongs on your list of potential sponsor benefits. Whether you decide to include a list in what you offer your corporate partners is another matter.

As another example, the use of your logo is a powerful benefit you will want to include on your list. You will then likely want to set strict parameters on the situations in which its use can occur. Don’t overlook anything. Your list of benefits should be a list of every single benefit – tangible or intangible, quantifiable, or qualifiable – that you might offer a corporate sponsor.

Now for step two . . .

The next step is to determine which of the potential benefits you have identified you actually want to include in a package of benefits to be offered to a corporate sponsor.

At this stage you will want to have in mind possible levels of sponsorship and the concept that not every benefit will go to every corporate sponsor. We are all familiar with the “gold, silver, bronze” – or similar – designations. In theory, the more precious the metal – and the higher the sponsorship fee – the more valuable the bundle of benefits provided to the sponsor. All too often at The Sponsorship Report we have noted that the most valuable benefits are provided to all, and the less significant benefits are used to define categories.

So think carefully about the gradations of sponsor benefits. And remember that no one is as qualified as your existing sponsors to help you understand which of your sponsor benefits are the most valuable. Type size on the event programme, for example, is not enormously significant to most sponsors. Special access to fellow sponsors or to the media can be.

Finally . . .

Price each of the benefits you have identified. The price list which you develop at this point is an internal document and is not a part of your proposal package. In time you will determine how to present the benefit/price structure to your prospects.

If you are pricing an event or another one-off, discrete project, begin your pricing deliberations by coming to grips with your budget. Determine production, advertising/promotion, on-site elements, and all other costs associated with the event. Don’t overlook the necessity to build in the profit you want to go toward your cause, your organization, or your designated project. Then look at revenue factors such as ticket sales, entry fees, program sales, licensing, merchandise sales, TV rights fees – everything that will generate revenue.

That done, you are ready to consider what your revenue goals from sponsorship need to be, given your costs. And that’s where we will continue in my second article about pricing.

Judith Barker is publisher of The Sponsorship Report and consults with nonprofit organizations interested in exploring their sponsorship options. She can be reached at (416) 466-4714.