What is In-Kind Sponsorship & Are There Benefits?

What’s the difference between “In-Kind Sponsorships” and “Cash Sponsorships”? A cash sponsorship is when the sponsor pays a fee in the form of cash, whereas an in-kind sponsor provides a value in the form of goods and services.

In-kind sponsorship may also be referred to as “value in-kind sponsorship” or by its acronym, “VIK”.

In-kind sponsorships can add a ton of value and be super helpful to the bottom-line. Not to mention, it can also open you up to a much larger pool of potential sponsors.

Aside from opening the rightsholder to more potential sponsors, it could also allow for expanding on a cash sponsorship agreement, since in-kind offers can be added on top of cash offers.

In-Kind Sponsorship VS Donation

The sponsor, regardless of the type of sponsorship (cash or VIK), will expect—and rightly so—to receive benefits from the rightsholder. If there was no return on their investment, it would simply be a donation and that is not what we’re talking about here.

In-kind sponsorship deals are deemed commercial transactions.

If you want a donation, ask for that.

But do not ask a company to provide goods and services if you have no assets to offer in exchange. Sponsorships are always meant to be mutually beneficial relationships and partners should be treated equally, regardless of their investment type (or level, for that matter).

Budget Relieving

Budget relieving in-kind sponsorships help rightsholders (you!) eliminate cost of goods and services.

This enables a sponsor to participate when they may otherwise not have been able to due to budget constraints. Meanwhile it helps rightsholders save on operational expenses.

Sales Tip: It’s a good idea for rightsholders to approach companies later in the year when these potential sponsors would be most likely to have excess inventory.

Budget relieving deals are typically valued at the retail cost.

Let’s say for example, that you need 30 room nights for your staff and speakers attending your annual event and you’ve budgeted $4,500 for this as a cash expense. But your sponsorship team secures an in-kind deal with a local hotel who is offering you those same 30 room nights on a complimentary basis in exchange for mentions and signage. That deal translates into a savings of $4,500 for your event!

Non-Essential

Another type of in-kind offer is the non-essential sponsorship where a partner provides a products you (the rightsholder) don’t need from an operations standpoint, but can offer a benefit, nonetheless. For example, it could be for products or services that contribute to the attendee experience.

Think water bottles being distributed at a hot outdoor event, or even items that can be included for raffle prizes.

IEG recommends that non-essential in-kind sponsorships be valued at 50% of their cash value. Again, this can vary and like with anything, is always negotiable.

Examples of Powerful In-Kind Opportunities

• In-kind sponsorships can vary widely depending on the property’s needs and partner capabilities, but here are some of the most popular types of deals:
• Media Sponsors can offer TV, radio, and digital or print advertising
• Airline sponsors can offer seats for staff, speakers, artists, and other VIP guests
• Hotel sponsors can offer discounted or complimentary rooms for staff, speakers, artists, and other VIP guests
  • For example, Hilton and Live Nation are in the middle of a five-year partnership that includes:
    • Hilton members can use their HHonors points to get into exclusive events, concerts, and related experiences
    • Live Nation (and its ticket brand, Ticketmaster, are driving concertgoers to partner hotels by featuring Hilton rooms on the site after guests purchase tickets
    • Artists and executives under the Live Nation umbrella qualify for reduced rates at the brand’s hotels
• Printing sponsors can offer their services to help off-set the cost of on-site signage and paper collateral
  • We saw this done when Hallmark Cards Inc. sponsored the ’02 Olympic Winter Games and U.S. Olympic Team by providing printing services which significantly cut costs.
• Electronic sponsors can offer audio visual equipment for events and properties

The Value of In-Kind Sponsorships

While all types of in-kind sponsorships can be beneficial, the most valuable ones are budget relieving – the type of deal that actually offsets hard costs for your organization. And if doing a non-essential deal, it’s important to factor in any cost you may incur to implement the benefits such as labor to distribute items for attendees.

We have found that while in-kind sponsorships can add significant value, they’re typically most valuable when combined with a cash value.