Sponsorship: generosity or strategic philanthropy?

The tradition was prolonged within royal courts and then had extended to modern states before large companies adopted it, becoming its major stakeholders. Nowadays, banks and insurances have been renowned for being the uncontested champions in their support for art and culture.

Sponsorship - Definitions

Maecenas: The term maecenas dates back to 1526. It derives from the Latin term Maecenas, which is the name of a minister under the rule of the emperor Augustus. Ever since, it has referred to a wealthy and generous person who helps writers and artists.

In its current meaning, the corporate philanthropy's first concern is to promote art and culture irrespective of the firm's commercial strategy or marketing policy. It refers to any action undertaken by the firm outside its direct object but which aims at promoting its image and improving its notoriety.

This practice may ultimately be used as an accessory means of communication for the company, yet it is not its major goal. Its objective is to enhance the value of the company as a player entrusted with a social responsibility devoid of any mercantile scope.

In practical terms, the philanthropist provides a gift and does not expect any financial or other reward in return. Corporate philanthropy is associated to an athletic, cultural or humanitarian event without expecting a direct financial or commercial result. It is a neutral action that is devoid of content for the company's strategy. Being laden with strong historic and moral connotations, it is explicitly free of charge.

Sponsorship is the equivalent of the French “patronage”. The concept is openly significant and formalised as such. For the sponsor, it is a communication move, an advertising and commercial action without a philanthropic purpose. The sponsor requires something in return from the sponsored association. Such move could be equally interesting for the sponsors in view of their rights to deduction from taxable results.

The boundaries in terms of scope between the different concepts are vague and variable. Even analysts and business bosses have disagreed on their use and their definition. Despite these differences which have significant legal and fiscal impacts, many practitioners tend to confuse the two concepts deriving from the term “sponsorship”.

Objectives of corporate sponsorship

As a management technique, sponsorship aims at enhancing the social value and the notoriety of the company through the elaboration of a clean institutional image endowed with an independent personality for the brands and products that it sells.

By getting involved in the event, the firm does not restrict its activities to its clients, suppliers, distributors and potential consumers.

The principle of philanthropy meets the company's need to go public and be known and acknowledged as a socially responsible player.

Walking man © Sven Teschke, CC BY-SA 3.0

An enhancing image

The creation of an institutional image requires confidence and credibility building among all interlocutors through a strong tie. It is an investment to benefit a dynamic management of reputation. In a philanthropy plan, the pledge of a social message goes through facts.

For the business, profit results from the contribution of a positive image, a widening of its public, the enhancement of its capital in sympathy and trust and an investment for the sake of recruitment.

Corporate culture

Another project of internal nature to be attributed to philanthropy which contributes to the cohesion of staff through the mobilisation of all wage earners around cultural and humanitarian projects and their voluntary adherence to an enhancing image of general interest. It provides a sense of pride and a feeling of membership which contribute to the progressive institution of a corporate culture.

Corporate sponsorship, a privileged vector of communication

Outside

Through the event, communication goes through action and not through fiction. Cultural sponsorship deals with the daily life of the spectators by inviting them to share the symbolic, aesthetic and social dimension of the event, which, alone, must be put forward.

Unlike conventional advertisement, and in order to convey its message, event communication is not necessarily or exclusively channelled through large media. This message must be emitted in a discrete way without media uproar, without any direct link with commercial activities avoiding all abusive recovery of any profit to the company through sponsorship moves.

Inside

Artistic sponsorship requires a convincing methodological action for the staff. Its objective is to ensure the participation of wage earners in the artistic project which is often deemed as elitist. To remove any form of reluctance on part of the staff and their trade union representatives, companies are more and more required to integrate more federative humanitarian causes for the promotion of an artistic work or event. They also make recourse to associate sponsorship based on staff initiatives.

Limitations and evolution of corporate sponsorship

During the 1990s, the context of the international economic crisis and unemployment rise, mainly in Europe, has had a negative impact on the way sponsorship was perceived. Criticism and suspicion started to emerge within public union as well as inside companies blaming art sponsorship for being archaic, its lack of operational efficiency and social concrete substance.

The contradictory debate has extended to questioning even the company's function. Should the company restrict its action to technical innovation and just to the manager's economic objectives and give up once and for all the art field and its passive contemplation?

Even though sponsorship has always been questioned in the most recurrent way as regards its social use, it remains a practice that relates to culture itself of society. It is particularly anchored in the United States through the foundations and the philanthropic actions of famous personalities. Just for the year 2002, for instance, the amount of private sponsorship in the USA reached 10.483 billion USD, that is 2.1% of GDP while in France this figure was limited to 359 million USD, that is, 0.09% of GDP. This figure amounted to 1.184 billion USD in 2005.

In Switzerland, philanthropic companies support art for the approximate sum of 243 million USD per year. In Ireland, art sponsorship has reached the amount of 112 million USD in 2005.

Sponsorship and insurance

For the insurance business, in particular, engaging in cultural and patrimonial sponsorship actions is but a natural extension of the task of art works insurer. This commitment comes within the framework of a group rationale and within a long-term communication strategy. Numerous insurance companies stand as foundations dedicated to art sponsorship, which develop their activities at an international scale.

In such a framework, sponsorship materializes, also, through a financial contribution to research and training programs pertaining to the techniques of restoring and preserving artistic heritage. Sponsorship, eventually, stands as a means of raising awareness among the general public to art works by making it easier for companies' wage earners to access museums and exhibitions.