How to Write Sponsorship Agreements

A sponsorship is more or less a donation. For example, sponsorships can mean an individual providing financial assistance to a child or to a community. Sponsorships also apply to the corporate setting, in which individuals or companies provide financial and technical assistance to support a private or public event. Sponsorships add to a company’s exposure, and most of the time the exposure is intended for a company’s advertisement and promotional efforts. Regardless of what the intention of the sponsorship is, a sponsorship agreement is needed. 

What is a Sponsorship Agreement?

The sponsorship agreement serves as the binding relationship between the sponsor and the recipient. There are two types of sponsorship agreements: informal sponsorship agreement and formal sponsorship agreement.

A sponsorship, although not mandatory, aids the business exponentially. The difference between an informal and formal sponsorship agreement is that the formal sponsorship agreement is a written contract. A formal sponsorship agreement consists of the terms and conditions of the agreed assistance. It will define what kind of sponsorship deal will take effect and it will also serve as a protection to both parties.

What is the Importance of Sponsorship Agreements?

  • It defines the specific sponsorship deal.
  • It serves as a guarantee (for a formal sponsorship).
  • It defines the role of the benefactor.
  • It defines the obligations of the receiver.
  • It sets the parameters of using the company products (trademark) in terms of commercializing sponsorship.
  • It balances the interest of both parties.
  • It defines the length of the agreement (in a formal sponsorship).
  • It sets limitations for both parties.
  • It serves as a proof of agreement.

Tips in Writing a Sponsorship Agreement

1. Identify what kind of Sponsorship you will be giving

Financial or Cash Sponsorship

This can either be in an informal or formal form of sponsorship. The financial assistance can either be a long-term commitment or a one time event. The sponsor will provide payment or compensation depending on the sponsorship agreement outline, and usually the beneficiaries for cash sponsorships are child welfare and animal rescue organizations, and also environment awareness groups.

Large corporations engage in cash sponsorships as part of their corporate social responsibility. They also help contribute to community empowerment as well as to nation-building.

Goods or In-kind Sponsorship

Similar to financial sponsorships, this sponsorship can either be an informal or formal agreement. This sponsorship occurs during annual one-time events, or events arising from natural and man-made calamities where emergency sponsorships are needed by the victims.

For example, a beverage company decides to sponsor a major sporting event held only once every four years. The beverage company will have to write an agreement proposal since sports events involve numerous public and private organizations. Through an agreement, the sponsorship will be recognized in a formal manner.

Media Sponsorship

Sponsorships can also equate to media activities sponsored by media companies. They can provide free media coverage through advertisements in newspapers, billboards, television, radio and social media. A written sponsorship agreement is also needed in a media sponsorship because this will help define the limits of privacy and publicity of the event, as well to protect the organizations and individuals involved.

Location and Manpower Sponsorship

As the name suggests, location and manpower sponsorship is providing a location or allowing the other party to use or rent facilities and equipment. For manpower sponsporships meanwhile, it usually involves manpower support usually used in organizing charity events such feeding programs, sporting events, concerts, art exhibits and auctions to name a few.

2. Create an outline or draft and include the important details

Most of the time, a sponsorship agreement follows this outline:

  • Basic information of the benefactor
  • Basic information of the recipient
  • Definition of terms and agreement (obligation of the benefactor and the receiver)
  • Payment for fees and other trademarks
  • Limitations or exclusivity  (confidentiality clause or non-disclosure agreements)
  • Termination clause
  • Signature line

3. Make sure that the other party will be able to participate

While writing a sponsorship agreement, one must consider the availability of the other party. If you are planning to provide sponsorship to children, a legal consent should be prepared by the beneficaries to prevent any form of legal action. Before any form of sponsorship is executed, both parties need to meet constantly with each meeting being documented and signed by both parties.

4. Aim for a smooth agreement

When to comes to sponsorship agreements, aim for a win-win situation for both parties. Just because a sponsorship is an act of helping or assistance, it doesn’t mean that the benefactor or the recipient should be at the losing end. Both parties need to agree on all points of the agreement as it can benefit both parties long-term.

5. Make sure to define the termination clause

This is one of the most crucial parts of any agreement. This will define the continuation or termination of the contract. If both parties are satisfied with the result of the sponsorship and want to continue the partnership, it should be indicated in the contract. Otherwise, if one or both parties are not satisfied, it should also indicated in the agreement.

6. Align the agreement to the company policy

Your sponsorship agreements should not contradict with your company goals and policies. For example, if you want to provide $1,000,000 cash sponsorship to a school but your company policy clearly states cash sponsorships are prohibited, then steer clear from that kind of sponsorship, no matter how clean your intentions are.

7. Make space for the signature lines and dates

Signature and dates might be a minimal detail but this is also an important part of the agreement. This will prove that the agreement was agreed by both parties.

8. Be open to amendments

Be open for amendments or changes when it comes to creating and revising a sponsorship agreement. Contracts are meant to be revised or amended due to a number of external factors. The amendments can either be changes in terminologies, payment terms, limitations and liabilities of both parties, etc.

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Learn more about sponsorship, you may check the following:

  1. Sponsorship Application & Samples
  2. Sponsorship Proposal Examples
  3. Sponsorship Proposal Examples & Samples

We hope you found our article on how to write a sponsorship agreement to be informative. Follow the tips listed above and write one for your own company.

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