The main difference between a sponsorship and a donation is that sponsorships are based on reciprocity – where cash or in-kind gifts are contributed, usually in exchange for marketing or advertising consideration.
They are typically bound by a written agreement between the two parties stating the value of the sponsorship and the benefits for all involved. The public sector receives cash or goods in kind and in exchange, the sponsor receives publicity designed to enhance its reputation (e.g. flyers, posters, advertisements.)
Sponsorship usually means supporting special or ongoing events, activities, or organizations. This is done financially or through the provision of products or services.
Sponsorship has a material advantage to the company in terms of raising the company’s public profile (i.e. to sell more products and services) and to increase positive awareness of the company or product by associating it with a good cause.
Sponsorship is highly public.
Money usually comes from the marketing, advertising or communications budget and is decided by the person(s) managing these areas.