In-kind vs. Cash sponsors
This is my 2nd year directing a local 5K/10K race with about 1500 participants. The local running shoe store owner declined to be a cash sponsor this year, but did offer to donate 10 certificates for free running shoes (up to $100 each) redeemable at his store. Then he decided to purchase towels with the store logo on them to hand out at the finish line to cool people off. He says he's spending $2,000 on the towels, and now wants top billing on the shirt over and above our two $2,000 cash sponsors. He claims it's customary for in-kind sponsors to be recognized on the back of the shirt according to the cash equivalent of their donation. I'm of the opinion that cash is more valuable than towels. He is really giving me a hard time.
How do you handle in-kind sponsors vs. cash sponsors? Some in-kind sponsorships save us dollar-per-dollar cost off the bottom line, such as the porta-potty service taking $500 off our bill and Coca-cola giving us free Powerade, but other in-kind sponsorships are less essential to the running of the race and maybe add perks to the race but don't benefit the bottom line. Any suggestions would be appreciated!
Ask him how much of that towel expense is going into printing his logo on the towels. (Don't actually do this, it will just create animosity with someone you want to play nice with, just a way of thinking about it.)
In my opinion, he's already getting his logo out there quite well by placing it on the towels and the gift certificates, while being an expense, are not as big of an expense for him as the face value. Besides, both of these contributions already amount to marketing for his store and are giving him a lot of visibility before the shirts even come into the discussion.
I don't think it's customary for in-kind contributors, especially those that use the contributions for advertising and especially if the advertising is counted as part of the cost, to be recognized according to the cash value of the contributions. I do help out with one event that receives both cash and in-kind contributions. They recognize all contributors over certain levels but set a higher standard for in-kind contributions. I'm not exactly sure of the difference in levels, I'd have to check with some people on that.
This is a very tricky situation. When it comes to running shoe stores, the in-kind sponsorship they can provide (race bibs, gift certificates for awards, runner bags, randome prizes, race marketing) can be more valuable to a race than some of the cash sponsorship. It sounds like this one wants to help your race fairly significantly. Has this running shoe store already bought the towels and printed the certificates? If not, I would go to the owner and suggest that instead of towels, he provide all the bibs and runner bags. He can have them printed with his store name on them. Then, see if you can restructure the $1,000 worth of certificates for the awards (either open or age group). Also, ask if they'll publicize your race in their newsletter, on their website and ask if you could have in-person registration/bib pick up at the store. If he he'll do this for you, I would equate it with a high-dollar sponsor (worth between $2,000 and $3,000) and I would be willing to place their logo at the same place as the other cash sponsors of that level. If your biggest cash sponsor is not comfortable with sharing the spotlight with an in-kind sponsor, offer the running shoe store the designation of official shoe store of the race in your race literature, advertising, etc.
I concur with a lot of what has been said. In Kind should not normally be valued the same as 100% cash and if it is not saving you the actual cash.
If you wold not have given towels and could care less about them,that is not the same as someone handing you cash for awards you buy.
However if you have all tee shirts donated and had in the past spent $8000 for them ,that is a worthy in kind donation and worth more than some others.
Best bet is to make clear upfront what expposure is in a written document.The calculations are yours to make .Again you want to take into account what you are saving or able to do with the inkind donation,what it costs the donor and how it enhances the race and the donor to come up with your calculation. Bottom line all inkind donations are not treated equally or dollar for dollar much of the time.For some inkind donations I have required cash for the privelege/exposure of donating.
Not exactly as billed
Many gift certificates come from the shoe companies, rather than the store, so it costs the store nothing or only a little (comes out of their co-op advertising budget from the shoe co.). Also, I know one store that gives out $25 G.C.s without hesitation b/c they have found the winners wind up spending far more than that amount when they come to the store to redeem them (they're kind of "loss leaders").
The towels seem like they would provide even more exposure than being on the back of a T-shirt, no matter where the logo is located. People might use the towels several dozen times all summer, whereas they might only wear the shirt a couple times.
In Kind = Cash only sometimes
As someone who has dealt with this problem on several occasions, I think your instincts are perfectly correct.
Specifically, in kind sponsorship DOES equal cash ONLY IF it directly offsets your budget and impacts your bottom line. If you had planned to spend $2,000 on towels to give out at the finish then yes indeed, they saved you that amount. If, on the other hand, you view the towels as a nice perk but would not have voluntarily purchased them then you must view them as what they are - local promotion by a running store.
It sounds like it was HIS idea to spend $2,000 on the towels to promote his business. That was his choice and you are under no obligation to provide additional promotional exposure when you had no intention of purchasing those towels in the first place. Tell him next year to simply give you $2,000 cash to have his logo appear on every t-shirt (which are worn numerous times after the event) as opposed to spending that money on the towels (which are only used once and probably thrown away). Given the choice, any intelligent person choosing to spend $2,000 on promotional exposure would use it to put their logo on the t-shirts as opposed to the towels. If he rejects simply giving over the cash for acknowledgment on the t-shirts, he probably did not spend $2,000 on the towels.
P.S. What are the odds that his bill for the towels just happened to be exactly $2,000, your major sponsor fee??? In the words of Church Lady from Saturday Night Live, "HOW CONVEEEEEENIENT!"
Thanks, guys, I feel much better now. It's amazing to me that the one local running store in town wouldn't make it a priority to be lead sponsor for the one longest-running and most-participated in local race of the year, but it's his business to run as he chooses. It often seems more a case of the club being used to promote his store rather than the store promoting the club. I never see club newsletters or membership forms posted when I go in there. He even got upset when gals on our website forum discussed the best source of cheap running bras (how dare anyone buy running clothing from anyone but him!). He didn't ask ahead of time whether we wanted to provide towels, just went ahead and did it. And yes, I did mention to him that we could not give him credit for the cost of printing his store logo on the towels. I may be new, but I'm not stupid! I pointed out that he could have been a $2,000 cash sponsor and gotten top billing on the shirts rather than spending $2,000 on the towels and could only assume he'd decided the towels were a better use of his advertising dollars, to which he replied, yes, they were (but then still complained about not being on top on the shirt). I stayed calm in the face of his insults, but it sure is awkward.
Next year I'll know to have clarification on the sponsor sign-up form as to how in-kind sponsors will be classified. Thanks for letting me know I'm not being unreasonable.
It sounds like this running shoe store owner needs a time out. It's a real shame because races and shoe stores can leverage each other in very productive ways.
Cultivating a good relationship with running stores is key for local clubs. And it can work both ways!
Around us several running stores provide free race services, like displaying race apps in the months leading up to the races, and then doing in store registration during the two weeks prior to the race. (Taking the app and money, giving out the race number and shirts). The closest store to me has a counter dedicated just to race services. The benefits work both ways, runners can do in person registration and they get regular foot traffic from their target market.
The exposure local races get from the local running stores can be significant, but only if that's where people in the community go to pickup race apps and do registration. Sounds like the store in your case is not actively promoting the race.
The 10 certificates for free running shoes are a significant real cost to him and a boost to your race. The towels are also good, but you don't indicate if this is a common past practice or just something he dreamed up for this year.
Whatever the total donation may be, the problem is one you have caused you self. You have sort out sponsors and then failed to set out what you will do in return, before the donations or commitments were made.
As some of the other posters mentioned, it does depend if the towels were his self promotion idea, or if they are something the race said they would applicate having. Maybe you can reach a solution by promoting his logo to the sleeve or shoulder of the shirt.
We don't such problems becuase we don't normally have much in the way of sponsors. The race entry's basically cover the cost of race production. We are not attempting to raise money for charity, so if we cover costs we are happy. Our measurement of success is not how much money we raised but, if we covered costs and if we and the runners had fun!
Of the sponsors we do have, most are in-kind and are smaller amounts. We don't put sponsors on the back of the shirts. Just to much hassle. We do sometimes put a small running store logo on the sleeves (short sleeve shirts). We will do this if the store has done something like help us get a technical shirt for a t-shirt price, or contributed in a significant way, like your partnering store has. For example, in one race series of three races every person who places in age group gets a $20 of their next pair of shoes, (as well as some other prizes.) That's around 150 coupons. For that, and other help, they get the honored sleeve position. (We only use that position for occasional running store logos.)
Our club races don't normally have any other sponsors on the shirts. We do credit them on the apps, and on the microphone, and with simple thank you wall packs, but the backs of our race shirts are almost always blank.
Some may think we are missing out, but honestly people are more likely to wear the race shirt again if it is not plastered with advertising. It also saves a lot of grief. We don't have to deal with who's on top, using the correct logo, etc.
As a club we work with several of the running stores in the three counties, and work even more closely with one of the stores: We have held parties out side the store on the covered sidewalk and parking lot. We also have a weekly training run starting from the store. This sort of give and take seems to help both our clubs and the stores.
We try not to strain the relationship by asking running stores to coff up products just so we can give them away.
For raffle items we tend to work on starbucks cards and similar restaurant based gift coupons. That is also in line with our general principle that it's better to have lots of smaller items than only one or two big ones.
We also make sure volenteers get more than their fair share of raffle loot. For example, last Saturday the volenteers got everything cleaned up and back in the club trailer only one hour and thirty minutes after the start. So we had a volunteer raffle, and we had enough prises for everyone of them. Then took the volunteers to breakfast at IHOP, on the club.
If you are going to have a host of sponsors then I think you need to setup sponsor rules ahead of time, or find other ways to smooth things over. For example you could offer the store the opertunity to setup a 10x10 tent and table at the event. This costs you nothing and gets them more evolved with race day. They get more exposure but in a different way.
Be creative. You can say "Listen I can't give you top billing on the back of the shirt becuase the race committee already laid out the criteria for that, but I can offer you something better, how about ........"
You trade you in-kind, like letting him bring tent and table to the event, and maybe sleeve logo location, for his in-kind.
If you can get two weeks of in-store registration what is that worth to your race ??