Knowledge Centre Blog

Ethical Considerations in Sponsorship

By Jane Brennan

The Irish sponsorship market was estimated to be worth €152m in 2015, representing a record high, and is on track for continued growth in 2016. Arts sponsorships form an integral part of that market, with 68% of sponsors viewing arts sponsorship as being capable of greater customer engagement than other types of sponsorship (Arts, Festival and Music Sponsorships Survey 2015, Allianz and Business to Arts). There are exciting opportunities out there for sponsors and cultural rights-holders alike, but these should be considered against the current environment of increased transparency and accountability in business practices. Now is therefore an opportune time to consider what ethical considerations may arise in arts sponsorship, and how best to deal with them.

Some considerations for Sponsors

  • Arts sponsorship offers a truly unique way to engage with new and potential customers in their leisure time, outside of traditional marketing channels, and has the additional benefit of positively giving back to the community. Consider how you can capitalise on or leverage your association with this uniqueness and positive message, rather than overwhelming it entirely with your own marketing message, which might turn the audience off.
  • In extreme cases, arts organisations have found themselves the subject of negative publicity and protest where sponsors appeared to drown out an event or project with their own branding or agenda, rather than genuinely appearing to want to help create a great event for the audience, or to support the arts. Such negative publicity is detrimental to sponsors and arts organisations alike.
  • Be respectful of the autonomy of an artist or arts organisation, in particular over curatorial decisions. If the quality of work on display or being performed was part of what attracted you to it in the first place, don’t try to influence decisions in ways that could diminish that quality.
  • Networks are an integral, necessary and, for the most part, positive element of the business world. For example, a member of an arts organisation’s board may also work in a company that sponsors that organisation, and the sponsorship might have come about because he or she is passionate about the organisation’s work. However, it is important to be aware of the potential for conflicts of interest to arise in such circumstances. Having a conflicts policy in place will assist, but not guarantee, that such conflicts do not occur.

Cultural Rights-holders’ Considerations

  • As sponsorship, unlike philanthropy, involves a commercial exchange and therefore requires give and take, be realistic about what you can deliver effectively to a sponsor. Be mindful at all times of your mission, your audience, and your core values and don’t agree to anything that compromises them. A good barometer for successful decision-making when negotiating a sponsorship is whether you would be happy for your discussions and decisions to be in the public domain – as it may well be, if you find yourself subject to a freedom of information request.
  • Particularly where funding or time is short, it may be tempting to enter a sponsorship partnership without the usual consideration of what is being exchanged and whether the brand alliance is right for your organisation. Remember that to end a sponsorship that is not proving beneficial takes leadership, and could attract publicity which creates negative sentiment, which damages future sponsorship discussions with corporates who might seek sponsorship opportunities elsewhere.
  • When considering a potential sponsor, research the company well and consider whether the partnership could send out mixed messages to your audience. For example, could your organisation’s integrity, reputation or even mission be jeopardised by publicly endorsing environmentally sustainable business practices, whilst also accepting sponsorship from a sponsor that engages in environmentally harmful practices?
  • Good governance means not just signing up to codes of practice, but adhering to them too. It may be more beneficial to adhere fully with one code of practice than partially adhere to several. Consider what’s most important to your organisation and what you can realistically commit resources and time to, and determine, on that basis, what codes are suitable. Similarly, if you have ethical fundraising guidelines in place, use them! Best practice is only best practice insofar as it is actually practiced.
  • Reassess current, and in particular, long-standing sponsorships at least annually to ensure that they remain acceptable in the current economy and business landscape.

Jane Brennan is a company lawyer with a strong interest in ethical business practices, governance, sponsorship and the arts

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