Hi there!
Even though you are looking at sponsorship structures through the marketing department and not the development office, what the above commenter said is correct. If you are a nonprofit, the AFP Code of Ethics does not allow for compensating by commission. There is a great explanation of all the reasons why this is considered unethical and inadvisable here:
https://afpglobal.org/sites/default/files/attachments/2018-10/EthicsFAQ2016_0.pdfEven if your organization or anyone in your organization is NOT a member of AFP, it's still considered standard to follow the AFP guidelines for anything to do with revenue from outside the nonprofit organization. To quote the article:
"There are three primary principles underlying this standard:
1. Support for a nonprofit organization in any form is a voluntary action for the public
benefit.
2. The seeking or acceptance of charity revenues should not result in the personal benefit
of any employees, contractor, or representatives of a charitable organization.
3. Donor attitudes can be unalterably damaged in reaction to undue pressure and the
awareness that a commission will be paid to a fundraiser from his or her gift, thus
compromising the trust on which charity relies."
I would also add that the ability to raise money--be it from individuals or business--takes time and expertise. We are not acknowledging the work and professional nature of the salesperson when we only offer them commission. Sometimes a "no" this year is only a "not yet" and a good fundraiser will cultivate those relationships over time. A commission won't reflect the effort it takes to even acquire that sponsorship or donor.
A method some organizations use is a bonus structure that rewards levels of acquisition. But be aware that if one department or set of staff are receiving bonuses, others in other departments should be offered them as well based on goals and metrics your organization has clearly communicated to the staff.
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Angie Albright
Director
Clinton House Museum
Fayetteville AR
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Original Message:
Sent: 02-01-2019 10:00 AM
From: Richard Glover
Subject: Sponsorship sales compensation
John,
Thank you for your reply. I should have been more specific. The sponsorships I am speaking of are marketing sponsorships, not philanthropic. The staff selling these are under our marketing umbrella and are not part of philanthropic efforts.
Thank you,
Richard E. Glover, Jr.
Vice President of Communications & Marketing
Space Center Houston
Manned Space Flight Education Foundation
1601 NASA Parkway | Houston, TX 77058 | USA
Office: +1 281 244 2135 | Mobile +1 512 771 1573
rglover@spacecenter.org
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Original Message------
Richard:
In my experience most Museums and their development professionals adhere to the Code of Ethics of the Association of Fundraising Professionals (AFP), which prohibits compensation via a commission based on a percentage of donated funds successfully secured by the employee or independent contractor. There are several reasons for this prohibition, primarily based on the understanding that museum development activities are a long-term effort building relationships between the institution and prospective and current donors. Percentage commissions reward only short-term results, which can skew a development office's activity away from the long-term relationship building that builds a sustainable donor base and thus are detrimental to the long-term goals of the institution. A more common practice is to offer development professionals an appropriate compensation and benefit package and to recruit individuals who have a track record of managing sustainable development programs at other comparable non-profit institutions.
It should be noted that this practice differs notably from political fundraising where obtaining short-term results prior to the upcoming election is a absolute necessity. Money coming in after you've lost the election due to lack of sufficient funding doesn't help a politician much. Consequently, governing bodies for government owned institutions often fail to understand why non-profit organizations avoid commission-based fundraising.
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John E. Coraor
Cultural Management Partners LLC
Huntington, NY
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