Sponsorships to financially support public projects in return for promotion, advertisement or awareness raising can be a source of revenue for a municipality project, particularly if the project offers high visibility. Sponsors may be interested to support green and climate friendly projects as part of their Corporate Social Responsibility (CSR) activities. CSR activities are efforts, usually by businesses or corporations, that aim at raising awareness on the kind of impact these entities are having on all aspects of society (economic, social, and environmental) and the policies and practices undertaken to have a positive influence on the society at large. Depending on the size of the portfolio of the foundation, the CSR funds or corporations, grants for causes with social and environmental components are available. Such grants can supplement the capital required by a municipality and be invested in the social and environmental components of the project.
Advantages:
This financing type can finance the social components of the projects as well undertake operation and maintainence costs of public infrastructure. As it is in the form of a grant, the Municipality does not need to repay the capital received as well as it does not reflect on the balance sheet.
Disadvantages
In many cases the sponsors need visibility in terms of display of advertisements. Moreover most sponsors finance local projects where they have a market presence. There is limited access to capital.
Project financed by this model:
Depening on the type of sponsorship, this model can finance small to medium scale projects. Planting trees, operation and maintainence of public infrastructure, awareness raising and community engagement are few of the examples.
Further Reading: