This article appeared previously in Canadian FundRaiser

“More individuals are interested in your cause than corporations.” According to Dory Vanderhoof, you will on the whole be better off by developing an individual major gifts program than by going for sponsorship support. Individual donors, he points out, will give more money and demand less recognition.

Addressing last year’s NSFRE Fund Raising Congress, Vanderhoof said that where an individual will often give from $100,000 to $1 million, you’ll have to fight for $50,000 to $100,000 from a corporation. This, he said, is becoming a significant factor in the USA, but not yet in Canada, where we haven’t developed major gift programs to the same extent. Take time first, he stressed, to build a major gifts program, and it will take time.

Vanderhoof identified two main types of sponsorships:

Quid pro quo – a mutually beneficial, balanced relationship, such as you would enter into with a major corporation such as a bank.

Philanthropic Relationship – in which the decision-maker (often a corporate owner-manager) has a personal interest in the charity. If this is the case, the evidence will usually be the presence on the charity’s board of senior executives from the corporate sponsors.

In the USA, Vanderhoof pointed out, “we’re finding that you can’t develop a really successful sponsorship program unless you can get a group of CEOs on board … and this of course is not ‘sponsorship’, but rather corporate philanthropy.”

Give them good reasons to follow their interest

Whether or not you have a special relationship with a corporate CEO, Vanderhoof said, you’ll have a better chance of success if you can give them good commercial reasons to support their personal inclination to work with your charity. Rather than looking for ways that they can help you, begin by asking yourself “How can we help this company achieve its corporate goals?” To do this, however, you will need a detailed knowledge of your constituency and your reach within it, as well as similar information on your prospective sponsor’s market and goals.

Research your market carefully, Vanderhoof stressed. A common fallacy of surveys and market research, he argued, is that they identify the ‘average’ client, who by definition does not exist. Instead, sophisticated organizations are increasingly turning to geodemographic segmentation, which identifies a series of different audiences, stratified by wealth, consumption patterns, media choices and other factors, which can be combined in different ways to target your marketing efforts more precisely. This, he pointed out, will help eliminate the wasted marketing costs that result from broad reach, rather than targeted advertising.

While they’re not easy to find and develop, said Vanderhoof, in fact sponsorships can help corporations reach highly-segmented markets very cost-effectively. Compusearch Micromarketing Data, for example, segments the Canadian population into eight ‘clusters’. Any charity can apply these categories to its client and donor base, and then use the results to identify the corporations that are most likely to be interested in gaining access to the audiences it can deliver.

Scan and segment your audience

For as little as $1,500 to $2,000, Vanderhoof reminded the NSFRE audience, you can scan and segment your audience. All you need is their postal codes. This will allow you to think much more precisely about the audiences you are serving, and the type of corporations that might benefit from access to them to expand their customer base, for public relations purposes, or to gain media impact.

Where to look for sponsors

Smaller corporations can be good bets, either because they are located within your immediate community or because of an interest in the markets you serve. Larger corporations can only be identified by a series of well-orchestrated and on-going information gathering processes: keeping up-to-date on business news and corporate activities; monitoring annual reports, which often talk about their interests and goals; and attending presentations and speeches by corporate leaders.

In the process, you will develop a short-list of organizations that may after preliminary consideration, be interested. Recruit corporate decision-makers for your board and volunteer committees. Get out and call on them, says Vanderhoof. Build relationships and contacts. Go in pairs, and listen and learn. Ask them first for help in developing your sponsorship program. Those that are good prospects will self-identify, and others will come up with good advice and suggestions. Don’t try to sell your ideas at the first meeting. Use it rather to gather information, and then return later with an idea that meets their expressed needs.

But first, ensure that you have done everything possible to build your individual major gifts program.

For more information, call Dory Vanderhoof, Genovese, Vanderhoof & Associates, 1103-77 Carleton St, Toronto, ON M5B 2J7, 416-340-2762.