As a nonprofit organization, you rely on the charitable contributions, grants and gifts from foundations and other donors.

If your organization produces events specific for your fundraising and/or as a community service, your sponsors are a valuable asset in making sure you meet expenses and, hopefully, add to your revenue for operating costs and future events.

Some of your sponsorships will stem from local businesses, both large and small.

But asking your sponsors for corporate foundation grants is a different aspect of giving they may not fully understand. And if you have had a sponsorship relationship with your larger businesses and corporations for some time, it might take some effort to educate them on the difference and why it matters to you.

Sponsorships versus foundation grants

A sponsorship is financial support to help fund an event.

A grant is a financial reward given to an organization for a specific program or to help them reach its goals.

Sponsorships and foundation grants have a couple similarities, but are otherwise vastly different. Both are tax deductible. Also, corporations require recognition for both sponsorships and grants.

Sponsorships generally stem from the marketing department, whereas grants are awarded through the foundation.

Sponsorships have little to no guidelines as to how the funds will be used. The nonprofit can use the funds toward operating expenses and other needs as it sees fit for that event.

Grants have specific guidelines for how the money is to be used for a particular purpose or program. The money usually cannot be used for salaries, operating expenses or other general needs (although grants vary and there are some that are for these purposes). And there is typically a budget and timeline attached to the grant award.

Return on investment and impact (ROI) for corporate sponsors

Corporate sponsors lean on the “what’s in it for me?” mentality and strive to benefit in some way from any sponsorship. This includes such benefits as receiving acknowledgment as a sponsor in nearly all communications; gifts, such as tickets to the event, prime seating and other benefits that attendees might otherwise be charged for; name recognition; and employee volunteer opportunities.

Corporate foundations also desire corporate acknowledgment and recognition, but are vastly concerned with how the money is being used.

Both sponsors and foundations require follow-up for the outcome and its results. Corporate sponsors are interested in how many attended the event, the financial amount raised, where they and their employee volunteers were mentioned, all the communications they were in, and any other relevant details so they can see the impression they had in the community. This information is also helpful for future sponsorship requests when the nonprofit plans its next event.

Community impact is crucial for the corporate sponsors. To them, while they do feel good about helping their community, the business is interested in building trust with its customers and investors, raising its own awareness and having a positive effect in the community to increase profits.

The corporation will consider the financial balance of its sponsorship against the community impact to decide if there is value in that sponsorship.

Foundations that award grants also want to understand their community impact and how their funds affect the program(s) they help finance.

Foundations are interested in the results of the awarded program, and their guidelines spell out what specifically they need. The reports from the nonprofit are generally more detailed. All communications regarding the program, how the money is being used and the benefits to the program from the award are items that foundations will want to see. Keeping your donors updated is a must to build upon the relationship and help the foundation feel it made the right decision in awarding the grant.

In many cases, foundations want to be involved in the program. Including corporate employees in volunteer activities for the program is an ideal way to help the foundation be an active partner and collaborator.

So how can you transition your corporate sponsorship to foundation grants, or better yet, add them in addition?

Build relationships to strengthen support

Moving from the sponsorship request to grant request can be a smooth transition if the corporate and nonprofit relationship is intact.

As with any funder, the relationship is a key component for continued financial support. Have consistent conversations with your corporate sponsor. Find out how the corporation feels about the results of the event it sponsored. Share the benefits to the community that came about from its sponsorship.

Following the event is an ideal time to move the conversation toward grants. If the corporation feels strongly that sponsoring your event had a positive community impact, and it realized a return on that investment, use that connection to support your goals. These details can be a strong advocate for your mission.

This is especially helpful if the corporate foundation considers grant applications only from organizations it has invited to apply. Not all corporate foundation grants are necessarily made public, so this is a time when who you know is imperative.

This is not to say that because you have an “in” with your sponsor that you will receive the grant. Grants have specific criteria and scoring that ultimately determine whether an organization will be funded. The amount of money the corporation awards could also be limited. What it does mean is that you have already established a partnership with the corporation through the sponsorship, and this could be helpful in showing how you have used its funding, and the impact within the community.

Although the program you specifically seek a grant for will be different from your sponsored event, the results of that event that show the significant community impact affecting the sponsor will go a long way in securing grant funds.