When you hear the term "sponsorship letter" – also called a sponsorship proposal – it usually has to do with a request from a nonprofit organization for cash or donations. But whether you run a nonprofit or a for-profit small business, you can still use a sponsorship letter to help rally support for events.

As the name implies, a sponsorship letter is basically just a sponsorship request. This letter asks the recipient to provide money or an in-kind donation – probably the latter when sent from a small business – while detailing what sort of incentives are in it for the donating party. This sort of outside-of-the-box soliciting can get a little awkward, so it helps to know when to use a sponsorship letter and get a leg up on effective tactics for writing one.

Assess the Situation

Let's get this out of the way – sponsorship letters aren't an excuse for your small business to go around soliciting money like your own private Kickstarter. But nonprofits and small businesses alike can be involved in organizing events that strengthen the community, including the local business community, and that's where these letters come into play.

If your business is heading up a fundraiser for your favorite local animal shelter or national scholarship charity, reaching out to other businesses or organizations via a sponsorship letter can be crucial. Likewise, if you're involved in a community day, local business engagement event or a neighborhood event such as a gala or marathon. If it's for a good cause, a sponsorship letter might just be the key to netting finger foods from the local vegan bakery, rides and a karaoke machine from the party supply company or banners, posters and invites from the printer.

Nail Your Sponsorship Letter

Like virtually any good letter, a sponsorship letter includes all the header basics, like your name, company name, address and contact info. Know who the decision-maker in this department is and address your letter to them specifically. Now let's get to the good stuff.

First, focus on the event. In addition to logistical details like time and place, hook the reader with a description of how much fun it'll be or how it'll engage the community and exactly what sort of good it will do for its cause, as well as what sort of promotional value it offers for sponsors. If you've already snagged a few sponsors, front-load the letter with their names to help legitimize your cause and build trust (it's OK to name drop in this case). Similarly, use this opportunity to briefly highlight past success you may have had with similar initiatives.

Keep it concise – less than a page is ideal – and after you've established the "what" and "why" of your event in an engaging fashion, don't beat around the bush about what you're asking for from the recipient. Do, however, provide the recipient with options, or even ask for suggestions about what they may be able to contribute. This helps them feel like a more integral part of the event and, who knows, they might even surprise you with some stellar ideas of their own.

Keep in Mind

Don't limit your sponsorship requests to just money or products. Local businesses may be willing to contribute in a variety of ways, such as offering volunteers to work your fundraiser, putting up fliers in their place of business or even getting creative, like a local coffee shop naming a limited-time latte in honor of the cause and donating a share of the profits.

Many established businesses dedicate a portion of their budget to sponsorship opportunities and the like, but you can make it easier for them by helping them avoid conflicts. Give at least a few months worth of heads-up when sending out your sponsorship letters.

If you feel still feel a little lost in the reeds, numerous universities and services such as Fundly or Qgiv offer sponsorship letter templates online – even if they don't fit your company's request to a tee, these sample letters make for solid springboards.