This article will walk you through each component that should be included in a formal nonprofit sponsorship agreement and point you in the direction of the templates to help your organization get started.
Who is this template for?
This template is for all nonprofit organizations.
What are the main sections covered in this template?
Editable, nicely designed 4-page sponsorship agreement template you can adjust to your nonprofit's branding.
Corporate sponsorships are key sources of revenue for many nonprofit organizations.
The most successful corporate sponsorships are held together by the framework of a nonprofit sponsorship agreement.
This article will walk you through each component that should be included in a formal nonprofit sponsorship agreement and point you in the direction of nonprofit sponsorship agreement templates to help your organization get started.
Let’s dive in!
What Is a Nonprofit Sponsorship Agreement?
Let’s start at the beginning. What exactly is a nonprofit sponsorship?
Sponsorships are mutually beneficial relationships in which a corporation supports a nonprofit organization with direct financial or in-kind gifts in exchange for being recognized publicly as a supporter of that organization.
A nonprofit sponsorship agreement is a document that outlines the terms and conditions of this partnership to ensure its legitimacy. The agreement makes certain that both entities (the corporation and nonprofit) understand the terms of the sponsorship and both benefit from the relationship.
Typically a corporation benefits from being a sponsor by being recognized for their contribution—typically in the media or highlighted at a special event or within publications released by the nonprofit in question. In exchange, the nonprofit organization receives financial or in-kind support from the corporation.
Take Bank of America, for example. Bank of America could partner with your organization as a corporate sponsor for a special event and in exchange their logo could be printed on banners, printed materials, programs, and other official marketing collateral produced for the event.
For Bank of America, it is great PR to have their name associated with the work your nonprofit does and with their support you can pull off an amazing event that will bring in key sources of revenue for your organization.
What to Include in a Nonprofit Sponsorship Agreement?
Nonprofit sponsorship agreements will differ depending on the nature of the relationship, as well as the needs and expectations of the partnership. However, there are typically a few key components that are crucial to any such document that is drawn up between two entities.
Let’s take a closer look at each of the elements that make up a nonprofit sponsorship agreement.
Perhaps the most crucial components of a sponsorship agreement are the specifics of the sponsor recognition.
It is important to lay out exactly how and when a sponsor will be recognized for their contribution.
For example, if you will be recognizing a sponsor via social media channels, note exactly which platforms the sponsor will be recognized on, how many times, and how many “impressions” can be achieved through each recognition.
If the sponsor is being recognized in person at a physical location, such as a special event, note specifically what this recognition will look like. Will the sponsor have signage with their logos present? Will a representative from the corporation speak at the event in support of the nonprofit organization? This should all be figured out between both parties ahead of time and laid out exactly in the agreement.
For developed corporate giving campaigns, nonprofits sometimes develop sponsorship packages with different recognition tiers for businesses to choose from.
For example perhaps at the “Bronze” sponsorship tier a corporation will get their logo featured on the website but at the “Gold” sponsorship tier a corporation will get their logo featured on the website, social media platforms, and in printed materials at special events.
In your agreement, it is also important to note if the corporate sponsor does not want to be recognized. While corporate sponsorships most commonly exist as a means for positive brand recognition, many businesses simply want to give back anonymously.
Always ensure that the sponsor is aiming to be recognized and approves of the recognition you propose. If not, ensure any agreement includes a stipulation about the anonymity of the organization so you can appropriately track their contribution internally without broadcasting their support publicly.
Payment and Use of Funds
In exchange for recognition, the corporation should be expected to pay in some manner. This could be through direct financial support, but it could also be in the form of in-kind donations.
In-kind donations are non-monetary donations made to nonprofit organizations. For example, in-kind donations could be goods such as food, clothing, equipment, or furniture. A corporation could even provide an in-kind donation by allowing the nonprofit to use their space/venue free of charge for a special event.
Every nonprofit sponsorship agreement should clearly lay out how the nonprofit organization should be paid, how much, and when. If payment is in the form of in-kind donations or services, stipulate exactly what that looks like, when it will happen, etc.
This payment and use of funds section is also important to ensure that your organization is above board in the way in which it utilizes the contribution from the corporation.
For example, if funding is supposed to go to a specific program or a special event, that funding cannot be used to cover general operating expenses. Expect to report back to the sponsor on how these funds were used and make sure that they are in accordance with the agreement.
Businesses and corporations frequently support charities and nonprofit organizations. However, at the end of the day, their number one concern is how to best promote their enterprise and increase revenue.
Sometimes corporations may be under the impression that a partnership with a nonprofit organization means the nonprofit should endorse their products or services. This is not the case and it is certainly something that should be addressed in any nonprofit sponsorship agreement.
While it is expected that the corporation should be recognized for their contribution to the nonprofit, a sponsorship does not come along with an endorsement—endorsements and recognitions are different, afterall.
For example, if your nonprofit organization is sponsored by the Coca Cola Company, they may expect you to recognize them in your nonprofit’s annual report. However, the corporation should never expect a nonprofit to also promote Coca Cola products.
Be sure to include specifically in your agreement that the sponsor should not expect an endorsement from the nonprofit organization. You never want to be caught in an awkward situation where you feel pressured to promote a sponsor. Including this in your agreement will help empower you to set appropriate boundaries in these types of partnerships.
Likewise, simply because the corporation is sponsoring your organization does not mean you should expect them to advocate for your work outside of the context of the sponsorship.
If a corporation provides an agreed upon in-kind donation to one of your programs, this does not mean that they are expected to give in other ways throughout the year or promote your work beyond the context of the in-kind gift. The sponsorship agreement should lay out both parties’ expectations clearly.
Sometimes a sponsorship needs to be cut short. The termination of a sponsorship is unfortunate, but something that you should prepare for when drawing up your agreement regardless.
Both parties in a sponsorship agreement should understand what the termination of a sponsorship would look like and under what conditions the relationship would be terminated.
Perhaps it is due to a breach in the agreement, conduct on behalf of one of the entities’ representatives, or more likely something like the cancellation of an event due to extreme weather conditions or an emergency. Consider the types of issues that could arise and result in the termination of the agreement.
Now let’s go ahead and dive into some handy nonprofit sponsorship agreement templates!
Free Nonprofit Sponsorship Agreement Templates
Now that you have a strong understanding of some of the key components that should be included in any successful nonprofit sponsorship agreement it is time to dive a little more deeply into what a nonprofit sponsorship agreement looks like.
Below are two really great nonprofit sponsorship agreement templates:
Stanford Law: Who better to look to than the experts? Stanford Law provides sample materials to support nonprofit organizations in creating sponsorship agreements. This nonprofit sponsorship template is a comprehensive overview of what you could expect to include in a document such as this.
Legal Zoom: Legal Zoom provides a clear cut, simple sponsorship agreement template while also offering step by step guidance on how to complete the form.
Please note that in the creation of any binding agreements you should always seek the advice of an attorney. This article and the content therein should serve only as a summary and overview of the type of agreement you might come across when entering a corporate sponsorship partnership.
Tips for Negotiating a Sponsorship Agreement
Effectively negotiating a sponsorship agreement can be challenging. It can be a delicate balance to strike, achieving a productive relationship that benefits your nonprofit organization while appeasing the sponsor and meeting their needs.
Here are a few helpful tips for navigating the process:
Be Transparent: Great partnerships are always built on trust and the same can be said for sponsorship agreements. Be open and honest about your expectations and boundaries when dealing with corporate sponsors.
Develop Sponsorship Tiers: Developing effective corporate sponsorship packages can make the negotiation process much more simple. If you have predetermined levels at which a sponsor can buy in, you already have set expectations for either party.
Be Realistic: A corporation is like any organization—they are tethered to their own internal budgets, guidelines, processes, and regulations just like your nonprofit. Be realistic in your expectations of them and what you ask of them to provide. Negotiations could deteriorate rapidly if you do not come to the table with asks that are reasonable for the corporation to accommodate.
Wrapping Up: The Next Steps
Nonprofit sponsorship agreements are key to fostering healthy relationships with corporate partners and developing new streams of sustainable revenue for your nonprofit organization. With the aid of helpful nonprofit sponsorship agreement templates and resources provided in this article, you have what you need to get started.
Also take a look at our comprehensive overview for navigating relationships with charitable corporations with guest speaker Jenni Hargrove. Browse our blog for additional insight on other topics related to fundraising, grants, corporate sponsorships and other elements of nonprofit fundraising.
With the right tools, nonprofits can quickly scale fundraising and programming and take back their time. But, what makes something the “best” tool? And how do you justify an additional expense in a resource-constrained organization? Download this guide to learn more.