Sponsoring an event or organization can bring more than just a day’s worth of exposure, providing the benefits of year-round affiliation with a charity, social group, celebrity or trade association. The very things that make a corporate sponsorship attractive can also cause problems for you, in addition to other aspects of cross-promotions that are out of your control. Reviewing the benefits and disadvantages of sponsorships will help you decide how, or if, they are right for you.

Loss of Goodwill

If you associate yourself with an individual or group that later gets bad press, your reputation might be temporarily sullied or the value of your sponsorship greatly diminished. Check out any organization you consider sponsoring, whether it’s a nonprofit, an individual or an events company running a for-profit promotion. Visit a website such as Guidestar or the Foundation Center to download a free copy of a nonprofit’s annual tax return. Look for Better Business Bureau reports or online reviews of for-profit companies. Talk to an attorney about putting a morals clause in any celebrity sponsorship that lets you out of a contract if an individual is arrested or is involved in questionable behavior.

Lack of Control

When you sponsor an event, individual or organization, you’re relying on them to fulfill all aspects of the contract, to the best of their ability. During a large event, an organizer might not worry about whether one sponsor sign is missing or your brochures are carefully displayed. Celebrities often forget to wear sponsor clothing or caps when on TV or being photographed, or they wear logoed items of competitors without thinking. Put one person in charge of any sponsorship contract you negotiate to ensure all aspects of your contract are fulfilled.

Surprise Costs

A common event industry formula for calculating the cost of some sponsorships is that you’ll spend $2 in non-contract costs for every $1 you agree to pay for the sponsorship. This takes into account the amount of staff time you spend researching, negotiating and planning your involvement, your efforts to promote your involvement, time spent at the event and travel, lodging and meal. Add the cost of any goods or services you provide for the event, such a free samples, t-shirts or caps. If you create any signage, brochures, press releases, t-shirt designs, social media alerts or website page updates, you might have marketing contractor fees.

Inclement Weather

Because much of the money to run an event is spent before the race, concert, festival or tournament, you most likely won’t get your money back if it’s canceled due to bad weather. If the success of a sponsorship is dependent on high turnout, even the threat of bad weather can damage your sponsorship if it significantly decreases attendance at events that aren’t canceled. Try to include as much non-event benefit as possible when you sign a sponsorship contract. Include year-round exposure on the organization’s website, access to attendee or member lists and the right to use the organization’s or event’s name and logo on your marketing materials.