If you are looking to become a sponsor or trying to develop some type of sponsorship program to fund a person or business, then the process should definitely start with a sponsorship agreement to protect everyone involved. A sponsorship contract is a relatively simple document that defines what the funding is for, the responsibilities of the sponsored party, how assets will be distributed, and a number of other variables. Even though many of these factors may not be completely clear at the onset of the project, it is important that the sponsorship package accounts for unforeseeable changes so there is no misunderstanding later on. The best sponsorship agreement covers every possible scenario that could later affect the business relationship between the two parties.
The first step in writing a sponsorship agreement is to define the scope of the project. If the sponsorship funding is for a college student that needs help with tuition, for example, then the sponsor would have to decide beforehand if this was to be an annual contract or a four-year agreement. Things like when the student would receive funding and his overall responsibilities would also have to be within the contract as well. There would also have to be sections that explained what would happen if his grade point average dropped or if he had to miss a semester due to illness. Each of these clauses has to be exact, meaning that both parties clearly know how the partnership will work and what will happen if someone violates the agreement.
Even though a sponsorship contract can be intimidating with all the definitions and exclusions, those terms and clauses are what protect you from the other party's negligence. Remember that a sponsorship contract can always be edited at a later date to allow the other party some leeway if unforeseen circumstances occur, or you could also verbally agree to a short reprieve from the terms. It will be very difficult for you to negotiate a stricter contract once the original goes into effect, so be sure that your best interests are always protected in writing the first time around.
It is also important to remember that when a person or business is trying to get a sponsor, the documented research is rarely as thorough as it should be. This means that you should be an expert within those types of business dealings before you even consider writing a sponsorship agreement; if you are not, then it is probably time to seek professional assistance. Attorneys are often hired to write sponsorship agreements on behalf of the sponsor for this very reason — they will research various loopholes to ensure that the contract protects you in every possible situation. If you are unsure about your ability to write a thorough sponsorship agreement, contact a professional.