There are a variety of different benefits of sponsorship from a business perspective, though the specifics can vary depending on the particular sponsorship package. The main benefits of sponsorship can be categorized based on whether they directly help the sponsoring business or do so indirectly by benefiting the community as a whole. Direct benefits may include increased name or brand recognition and an improved public sentiment towards the business. A business can sometimes benefit indirectly as well if the cause, event, or organization being sponsored has a positive effect on the community. In some cases, there may also be potential tax benefits.
When determining whether to sponsor an event or organization, a business will typically examine the sponsorship package. This is generally a document that outlines the specific benefits of sponsorship to the business. There are often several sponsorship levels, each of which can offer different benefits for corresponding amounts of money. Most of these benefits increase name awareness or help the business to stand out from its competition.
Specific benefits of sponsorship can vary widely depending on what is being sponsored. An organization that produces reports or studies may offer to place the sponsoring business's name on these documents. Events with printed programs or other media may also offer to place the corporate name or logo on these items. Banners may also be available to show that an event has been sponsored by the business in question. A charity golf tournament, for example, may offer the ability to sponsor individual holes, with the business name displayed prominently at the tee boxes.
There are often indirect benefits of sponsorship as well. Many businesses choose to sponsor local groups and activities in order to help improve the community. Local youth sports, community events, and homeless shelters are all ways that a business can invest in its community through sponsorship. This can often help generate business directly through name recognition, but the community building effect can also provide a long term indirect benefit.
Another potential benefit in becoming a sponsor is tax related. If the organization that is being sponsored is a qualifying charity, sponsorship donations may be tax deductible. The laws regarding this differ between areas, though in many cases any other tangible benefits must be taken into account before calculating the tax deduction. This means if any advertising or other benefits were provided in exchange for the sponsorship, the monetary value may need to be subtracted from the sponsorship amount before claiming it as a tax deduction.