Corporate sponsorship: the complete guide for nonprofits 

Corporate sponsorships are a win-win solution! Corporate sponsorships are a fantastic way businesses can make a difference; nonprofits get the support they need to keep doing their good work, while companies get tax perks and a promotion of their brand image.  

Companies step up with support, whether that’s through funding a huge event like an annual 5K or donating awesome products for an auction. But it’s not just about giving. It’s also about visibility!  

Why is corporate philanthropy a big thing right now? 

When companies align themselves with a cause, they not only show they care, but they also get public recognition for it. This partnership often leads to the “halo effect” — where the goodwill from the nonprofit rubs off on the business, hyping its reputation and drawing in new customers. 

Did you know? Over 77% of American consumers are more likely to buy from businesses that are committed to making the world a better place! And 25% won’t touch companies with shady business practices. 

Handbook for responsible P-philanthropy  

Choosing the right corporate sponsors  

With the spotlight on both your nonprofit and the companies you team up with, it’s clear why choosing the right corporate sponsor matters so much. 

As partnerships between nonprofits, government agencies, and for-profits grow, having solid policies in place is key.  

Here are some questions to consider before jumping into a partnership: 

1. Would we be proud to be publicly associated with this partner? 
2. Do they share our mission and values? 
3. Can we stand behind their products, services, and positions? 
4. Are their ethical standards and business practices in line with ours? 
5. If a disreputable or unethical source offers funding, would we turn it down if it were a smaller amount? If so, the bigger gift should be rejected, too. Otherwise, integrity has a price. 
6. If the partner has a history of harmful or unethical behavior, have we verified that they’ve truly changed? 

Choose wisely — it’s all about keeping your mission strong and your reputation spotless! 

What role will the sponsor play?  

Evaluate potential relationships based on these guidelines: 

1. If it’s a funding partnership, are there any strings or constraints attached? Are those requirements — like reporting or budget rules — really in line with responsible giving? Make sure that these rules don’t get in the way of doing good work or push you to do things that don’t fit with your mission. 
2. Is the partner trying to push us in a certain direction? Does that fit with our mission? 
3. Will the partner have a say in designing, executing, or promoting a project? Will they need to approve materials before they go public? 
4. Are your independence, objectivity, and credibility fully protected — both behind the scenes and out in the open? 
5. Does the partner have any unspoken expectations? If so, let’s get those in writing before you get started. 

Make sure everyone’s on the same page before moving forward.  

Be smart about who you pitch for sponsorships. If you go after the wrong partners, it could backfire. Aligning with companies that don’t share your mission can hurt your nonprofit’s reputation.  

For example, in 2009, the American Academy of Family Physicians (AAFP) teamed up with Coca-Cola and faced serious backlash. Why? Because sugary drinks are often linked to the obesity epidemic. 

Pick sponsors who fit your cause and keep your reputation strong! 

How to get sponsors?  

The secret to a successful sponsorship pitch? Knowing exactly who to reach out to first! 

Personal contacts and supporters  

1. Companies that already have your back. They’re giving you money, and they may even have a CEO who’s a major donor or a business that sponsors your events. They’re your friends and allies.  
2. You know these people, and they know you. But here’s the difference: they haven’t given you money yet. They’re familiar with your organization — maybe even vendors you’ve worked with. 

If you’re at a larger nonprofit, you’ve likely spent plenty with some vendors who could join you in a cause-marketing effort or if you’re at a larger nonprofit, you’ve likely spent plenty with some vendors who could join you in a cause-marketing effort, or they might connect you with a company that can. Board members’ networks are another goldmine for new contacts! 

Always start with the people who already know and love your cause! 

Local businesses 

Reach out to the businesses near you. Local businesses are the perfect starting point for building a solid, long-term partnership. You’re more likely to share the same audience, making your partnership’s cross-marketing efforts super valuable for both sides. 

• Check out your local chamber of commerce directory 
• Attend networking events 
• Dive into LinkedIn 
• Explore social media platforms 

Your board members, volunteers, and the nonprofit team probably know a lot of small business owners. Tap into those connections! 

Look online 

These companies aren’t even close to being prospects. There’s zero connection. They don’t know you, and you don’t know them. It’s the toughest circle to crack but also the one with the most potential. Why? Because a whopping 95% of companies aren’t yet supporters or contacts! 

There are tons of lists online of companies that donate to nonprofits. These companies already have a reputation for giving back, making them great potential partners. 

Pro tip: Big corporations sponsor only a small slice of nonprofits, so don’t put all your eggs in that basket when searching for corporate sponsorships. 

Think about your sponsor’s audience 

Know your audience! For sponsors, your audience is gold. You just need to frame it the right way. When you do, you’ll show your potential sponsors just how much exposure they’ll get from partnering with you. 

Here’s how to gather the info that’ll make your pitch shine: 

• Social media analytics 
• Demographic info 
• Membership engagement surveys 
• Google Analytics 
• Post-event surveys 

Show them the value of your audience! 

When your nonprofit and sponsor’s audiences overlap, you’ve got a winning combo! Your events and programs will reach potential donors and future advocates. Plus, your sponsor gets the bonus of turning your supporters into their customers. 

Sure, your donor base and sponsor’s customers won’t be exactly the same. But the goal? Bring in people who are most likely to become passionate about your cause.  

Weigh your sponsor’s goals and values! 

The nonprofit has the power to build trust and reinforce the sponsor’s brand. That’s why it’s so important to choose sponsors who align with your mission and values. If a sponsor clashes with your cause, it could feel like a betrayal of trust. For example, if you’re all about the environment, team up with a business that values sustainability and conservation. 

Before locking in a partnership, do your due diligence. This will help you make sure the partnership is a perfect fit. 

• Check out their history with philanthropy and charitable causes. 
• Look into any past scandals or controversial opinions. 

Invest in the right software 

Did you know that 51% of high-wealth donors ($200k+) prefer to give online and 66% of charities are worried they will miss out on opportunities for digital fundraising? 

With the right tools, you’ll zoom through potential partners in and beyond your community, set your criteria, and build lasting relationships with the best sponsors in no time. RallyUp offers a range of tools that can streamline that process. Customizable fundraising campaigns, donation tracking, campaign management tools, real-time analytics and much more – check it out! 

How does charity sponsorship work? 

What can your sponsor offer in return for cause marketing? Corporate sponsorships come in all shapes and sizes, and each one has its perks, depending on your nonprofit’s needs. 

Let’s kick things off! There are two main types of corporate sponsors you can partner with: 

• Organization sponsors: These businesses offer year-round support. Think of matching donations during a fundraising campaign or a big donation for a major project. 
• Event sponsors: These sponsors focus on a specific event. They might donate goods, services, or money to help make your event a success. 

Now, there are five ways your sponsors can step up and support your cause! 

Monetary sponsorships  

Businesses provide cash to fund your events, activities, or programs, and you can return the favor by featuring their brand on event merch or marketing materials. Plus, give them a chance to speak or have a booth! 

In-kind sponsorships  

These are non-cash contributions like gifts of goods, services, or experiences — like free tickets, pro bono services, gift certificates, and so on. For instance, a restaurant offering catering or a spa giving away free packages for your event raffle. 

This goes way beyond just fundraising events! Need marketing help? Tax assistance? Many companies are eager to offer these free services to nonprofits! 

In-kind sponsorships can cut your event costs significantly and are perfect for businesses that may not have a huge cash budget but have valuable resources to share.  

Check out these examples: 

• Venue partner: They provide the event space — for free or at a discounted rate! In return, they get branding opportunities like signage or mentions in your promotional materials. 
• Prize sponsor: These sponsors donate awesome items or experiences for raffles, giveaways, or contests. It’s a deal that works both ways — their products get exposure, and your attendees are engaged! 
• Food sponsor: From catering to snacks and drinks, food sponsors feed your guests and get branding at food stations, menus, or in thank-you announcements. Delicious exposure! 
• Digital sponsor: A digital sponsor can contribute resources like event apps, social media filters, or digital displays. These perks also give the sponsor visibility across all your digital platforms. 

In-kind sponsorship is a fantastic way to hype your event while keeping costs down! 

Media sponsorships 

It’s a sizeable way to get more eyes on your event! A sponsor covers the cost of promoting your event—think ads, print coverage, social media campaigns, TV promos, and podcasts/radio shout-outs. A local TV station might run a segment, or a newspaper could offer free ad placements. 

Corporate and employee giving 

Beyond traditional sponsorships, there are other awesome ways businesses can support your nonprofit! Think automatic payroll deductions, volunteer programs, and corporate matching gifts.  

1. Corporate matching gifts 

Corporate matching gifts are a huge deal! 65% of Fortune 500 companies offer matching gift programs. And an estimated $4–$7 billion in matching gift funds go unclaimed annually. Companies match the donations their employees make to nonprofits. Usually, it’s a 1:1 match, but some companies go above and beyond! That means your donors’ gifts could be doubled or even tripled — all at no extra cost to them! 

2. Corporate grants 

Corporate grants are business gifts to nonprofits, usually for a specific purpose. Like other grants, they may come with an application process and the need to report how the money was used. These grants can be:  

• Cash 
• In-kind donations  
• Other resources  

3. Volunteer grants 

Here’s another great way companies give back: volunteer grants! Businesses give money to nonprofits where their employees volunteer regularly. If you tap into this with your corporate partners, you could get extra funds for your mission! Ask sponsors to encourage their employees to volunteer at your events. If those employees have special skills, even better! With a volunteer grant, you get hands-on help and raise more money. 

4. Payroll giving 

Finally, payroll giving (or automatic payroll deductions) is a super easy way for employees to donate regularly. They can set up a deduction from their paycheck to go straight to a nonprofit. This creates reliable, ongoing donations — like a monthly giving program that gives your nonprofit steady support. 

Promotional partner sponsorship 

Promotional partners are individuals or organizations that use their platforms to spread the word about your event. This could be a social media influencer, a local blogger, or even a thought leader with a strong following in your target audience. For example, an influencer might shout out your event, driving awareness and encouraging attendance. 

Benefits of corporate sponsorships 

Corporate sponsorships create a buzz for both companies and nonprofits! Here’s how: 

For nonprofits

• Increased awareness: With the company’s audience on your side, more people hear about your mission! 
• Acquisition of new supporters: The company’s customers can become your supporters, too. 
• Growing credibility: Seeing a respected company backing your nonprofit makes potential donors feel confident they’re supporting something real and meaningful. 

It’s a powerful partnership — for both sides! 

For companies 

Nonprofit support is a smart business move. Corporate leaders are choosing to back charitable causes for some pretty awesome benefits: 

•  Positive brand recognition: Supporting nonprofits lets companies live their values and show their community spirit! 
• Customer loyalty: Companies that support good causes build trust with customers who care about social responsibility. And guess what? 63% of people buy or advocate for brands and businesses based on beliefs and values! And 55% of consumers are paying more attention to brand values than they did a few years ago. 
• Attracting new customers: It’s a two-way street — your supporters can become their customers, and vice versa. 
• Happy employees: When companies support good causes, their employees feel proud to work for a company that shares their values and makes a difference! Companies with workplace-giving programs see higher satisfaction and better retention. 
• Tax benefits & financial perks: Donations to 501(c)(3) nonprofits come with tax deductions up to 25% of taxable income. Plus, companies can also deduct the value of donated products or services. 
• Community goodwill & market growth: Local companies that donate build goodwill in their communities and get positive media coverage that boosts brand awareness. 

Leading companies in corporate philanthropy 

In 2024, numerous U.S. corporations were recognized for their significant contributions to nonprofit organizations. Here are the top 5 corporate sponsors: 

1. Wells Fargo 
2. Marriott 
3. Dick’s Sporting Goods 
4. Whole Foods Market 
5. State Farm 

Corporate Sponsorship Companies 

Looking for a sponsor? These companies are pros at making the process easier and know the sponsorship game inside and out: 

• Sponsor Match: A digital marketplace that connects you with sponsors in a flash. It’s all about streamlining the sponsorship process! 
•  Sponsora Platform: The place where brands and creators meet! It’s a marketplace and social network that makes sponsorship deals happen. 
•  NOCAP Sports: This company helps athletes and brands team up, execute, and grow successful collaborations. 
•  Voray: A B2B marketplace that connects business development pros with events. It’s reinventing event sponsorship and shaking up in-person advertising. 
•  FrameUs: This one’s all about bringing celebrities and fans together while creating new opportunities for endorsements and brand collabs. 
• ZipSprout hand-matches national, regional, and local businesses seeking targeted marketing opportunities. 

Examples of companies that donate to nonprofits 

Check out these awesome examples: 

• UncommonGoods: With their Better to Give program, customers can choose a nonprofit to receive a $1 donation with every purchase. 
• New Belgium Brewing Company: They give back $1 per barrel of beer to environmental causes. That’s millions going to good causes! 
• Bombas: Over 150 million clothing items donated through their giving program! For every item purchased, they donate socks, underwear, and T-shirts to shelters and community groups. 
• Kroger’s Zero Hunger, Zero Waste Foundation: They’ve donated 700 million pounds of surplus fresh food and invested $66 million in nonprofit grants to fight hunger. 
• Trader Joe’s Neighborhood Shares program is all about giving back! They provide fresh produce, dairy, and prepared foods to local food banks. In 2023, they donated a whopping $470 million in food and have given 104 million pounds since the program started. 
• Chewy.com: Since 2012, they’ve donated over $180 million in products to shelters and rescues across all 50 states. They work with 11,000 partners and also support organizations with food, supplies, and marketing through their Shelter and Rescue Network. 

Put together a sponsorship proposal 

Ready to wow businesses with your proposal? A killer sponsorship pitch is key to landing those big sponsors. Without a solid proposal, it’s tough to get support for your cause. 

Start with a story 

Kick things off with a story that shows the real impact of your work! Share it from a beneficiary’s point of view. A first-person story from someone you’ve helped makes an emotional connection and pulls the reader in. 

Introduce your organization & mission 

Make sure to introduce your nonprofit and what you stand for! Share your mission, a quick history, and info on your programs and services. Give them a snapshot of who you are and what you do! 

Share benefits of sponsorship 

Now, show them what’s in it for them! 

• Are you offering naming opportunities for higher-level sponsors? 
• Will you feature their logo on your website? 
• Are they included in your communications program? 
• Will they get an exhibitor’s table at your event? 
• Are their names featured on event banners, merchandise, and programs? 
• Will you issue a press release about the sponsorship? 
• Which demographics will they be in front of if they support you? 

Include a list of sponsorship pricing 

Make sure your sponsorship levels reflect your costs. If a program costs $100,000 a year, you could target a single big sponsor (think a huge company) or break it down into $10,000 levels and aim for 10 sponsors. You can create different levels with perks or offer sponsors the chance to support specific parts of your event — like a refreshment sponsor, entertainment sponsor, or venue sponsor. 

Be easy to reach and communicate regularly 

Make it easy for sponsors to reach you. Stay in touch and keep the communication flowing! 

Also, offer flexible payment plans. If you make the process simple and enjoyable, your sponsors will thank you and stick around for future events! 

What is a sponsorship packet, and how does it help?

A sponsorship packet is a marketing and informational tool arranged to attract potential sponsors for a nonprofit organization’s events, programs, or initiatives. It shows the benefits and opportunities for companies or individuals who choose to sponsor the nonprofit. 

It’s your chance to show them why they should partner with you, and what benefits they’ll get in return! 

Check out some other sponsorship packets (Example 1, Example 2) to see what’s included. You’ll get a good idea of what works! 

You can even personalize your packet to target specific businesses, use sponsorship proposal templates, share demographics, and highlight what makes your organization a perfect fit for them. Tailor it to land those bigger donations! 

Thousands of nonprofits are crushing it with RallyUp! We help you create fundraising pages and donation forms that make it super easy for sponsors to pay online. 

And guess what? The RallyUp team is here to support you with expert coaching and powerful tools to take your fundraising to the next level! 

Tax and corporate sponsorships 

Here’s something to keep in mind: corporate sponsorships can sometimes trigger tax liabilities, even for tax-exempt nonprofits. Yep, that’s right!  

Make sure to check out the Council of Nonprofits’ resources to get the lowdown on how the IRS sees sponsorships. You’ll need to distinguish between what’s considered a non-taxable charitable contribution and what might be labeled as “unrelated business income.”              

And don’t forget, nonprofits, anytime you’re working with a for-profit, make sure you’re staying on the right side of the line — no private benefits! If the for-profit’s gains outweigh the nonprofit’s, you could run into some serious penalties. 

In many cases, a corporate donation is a qualified sponsorship payment. This means it’s treated just like any other donation, and it’s tax-free! But, sometimes, corporate sponsorship can trigger unrelated business income taxes. 

Here’s how: 

If the donation comes with the condition that the company will be the exclusive provider for your event, limiting the sale or use of competitors’ products, services, or facilities, the IRS sees that as a “substantial return benefit.” That means the donation becomes taxable. 

Another tax trigger: If you advertise for a sponsor. For example, if you link to a specific product, endorse a product, or share pricing info, the sponsorship is no longer tax-free. Sometimes, a corporate sponsorship is part charitable donation, part advertising payment, meaning part of the sponsorship could be taxable. 

To keep it tax-free, make sure you provide value-neutral displays of the sponsor’s product, and only link to their home page on your website. If your sponsor gives you free product samples, you can hand them out but don’t endorse them. 

Nonprofits usually don’t pay federal taxes on income, but certain corporate sponsorship deals could create tax responsibilities. Plus, tax rules differ by state, so do your homework and ensure everything is reported correctly when tax season rolls around! 

The corporate giving wave is here – catch it with RallyUp 

The number of companies donating to nonprofits is growing fast! The trick? Finding corporate partners who align with your mission and values, plus using the right tools to power your online fundraising. 

That’s where RallyUp comes in! We help organizations step-up their corporate support with really powerful fundraising tools. With RallyUp as your alley, you can proudly showcase your corporate sponsors.  

FAQ about charitable sponsorships and taxes 

1. What can we do under the corporate sponsorship exception? 

A charity can accept any payment — whether it’s cash or in-kind donations like property or services — without being taxed, as long as there’s no expectation of a big return benefit for the sponsor, according to IRS rules. 

2. What’s a “substantial return benefit” that will trigger taxes? 

Any benefit given to the sponsor is considered a substantial return benefit, except: 

1. Acknowledging the sponsor’s name, logo, or product lines (without getting into details about product quality or comparisons). 
2. Giving disregarded benefits like small, low-value items (think giveaways that don’t add much value). 

3. What acknowledgment can we give our sponsor without triggering a substantial return benefit? 

You can thank the sponsor by displaying their name, logo, product lines, or slogans. Just keep it neutral! No qualitative descriptions or comparisons and no phone numbers, URLs, or value-based descriptions. You can also call them your exclusive sponsor or exclusive sponsor in a certain industry or trade. 

4. Can we give our sponsor exclusive rights, like being the only soda supplier at our event? 

If you grant exclusive provider rights, this income won’t count as “corporate sponsorship” income. While exclusivity as a sponsor is fine, exclusivity as a provider is seen as a “substantial return benefit” — though it may not always be taxed under UBIT, depending on how often you host events.