You have heard it a million times. “It’s all about relationship building!” 

Whether you are working to build an A-list board, grow a strong volunteer base, secure in-kind contributions, or generate dollars to fund your mission, at the end of the day your success depends on your ability to connect with the right people at the right time!

In the nonprofit world, we are quick to put labels on relationships, and we love calling everyone a “partner” because we feel connected by a greater cause.

Putting a label on a relationship can be a little tricky for organizations who are cultivating relationships with businesses and aren’t quite sure if the appropriate label is “sponsor” or “partner.”

So, what exactly is the difference between a SPONSOR and a PARTNER?

Simply put, sponsors are individuals or entities that provide support to your organization in exchange for marketing opportunities. Sponsorships can involve dollars or in-kind contributions, but at the end of the day, the sponsor does achieve promotional advantages by being associated with your organization’s worthy cause! If you are offering “perks” to a contributor to entice them, publicly acknowledge them or award their support, it’s safe to label that donor as a sponsor.

Also, remember that sponsors are often seeking to make tax-deductible contributions. It’s important that you consult with your CPA to determine whether your sponsorship perks can be classified as “non-taxable acknowledgments” or if they are considered “taxable” due to the substantial benefit that your sponsor will enjoy. If the contribution is taxable be sure to notify potential sponsors, so they are aware that their contribution will not be eligible for a tax-deductible receipt.

For a helpful guide to “Corporate Sponsorship: Charitable Contribution or Taxable Income” check out this resource from the National Council of Nonprofits.

Partners, on the other hand, have a vested interest and shared responsibility with your organization. This relationship might be limited to a specific program, event, or initiative but at the end of the day, a partnership often shares both the responsibilities and risks of your joint ventures.

As with any healthy relationship, it is important that organizations clearly outline both sponsorship and partnership agreements in writing. This practice can eliminate confusion and ensure the long-term success of the relationship. Check out Funding for Good’s free Memorandum of Understanding Templates as you define current and future partnerships!

Regardless of the label, it is always best practice to seek creative and consistent ways to connect with both sponsors and partners, express your sincere appreciation for their support, and celebrate the positive impact your collaboration created in your community!