Audit or Valuation of Facilities Events or Programs

Audit or Valuation of Facilities, Events or Programs Presented By Deborah Wilson Performance Sponsorship Group www. performancesponsorship. com

Sponsorship can be defined as the exchange of cash or in-kind services for a commercial reward. Corporate sponsorship is most often driven through the marketing department and typically the corporation receives crediting on marketing and advertising materials, hospitality opportunities and on-site sales promotions in exchange for the sponsorship fee. Tax receipts are not offered for corporate sponsorships. . Page 2 of 29

Philanthropy can be defined as the exchange of cash or in-kind services for little to no commercial advantage. Within corporations, this type of charitable giving most often originates with corporate affairs, or in larger organizations, with a specific donations department. The corporation receives limited crediting and visibility for its gift but unlike sponsorship, the corporation may receive a tax receipt. Traditionally, Naming Gifts have been made in perpetuity but now some donations are being made over a limited term. Page 3 of 29

Asset Analysis Identification of Tangible and Intangible Assets Tangible Assets n Tangible assets are items associated with properties/spaces/events that have a quantifiable marketplace value as determined by advertising or public relations agency benchmarks. Tangible assets include such items as print, signage, electronic messaging such as billboards, posters/ticket backs/brochures/letterhead, etc. Page 4 of 29

Asset Analysis Identification of Tangible and Intangible Assets Continued…. . Intangible Assets § Intangible assets are items associated with properties/spaces/events that have no quantifiable marketplace value. Intangible assets include items such as prestige of property, geographic reach, leadership, value of exclusivity, etc. Some advertising agencies will not accept a value for intangible assets that is any higher than 50% of the value of the tangible assets. An argument could be made that in some projects intangible assets outweigh the value of the tangible assets. Typically, valuation criteria is determined, a subjective judgment occurs grading that criteria relative to the established criteria, the criteria is weighted within the industry classification, and a total value is assigned to be used as a percentage of the tangible asset total. Page 5 of 29

Examples of Typical Facility Assets Tangible § Hosting & hospitality; § Tickets; § Signature events; § Access to special privileges; § Signage—internal and external; § Media communications—media kits, press releases; § Stakeholder communications— posters, brochures; § Advertising—print and electronic; § Billboards; § Foundation materials; § Direct mail; and, § Online. Intangible § Category exclusivity; § First right of refusal; § Showcase; § Sampling; § Prestige of property; § Management competency; § Networking through access; § Use of wordmark; § Brand Linkage; § Strength of market position; § Corporate culture; and, § Quality of public relations. Page 6 of 29

Return on Investment In Canada, it is common to offer a return on investment for Naming Rights of facilities in the range of 3: 1 - 5: 1 or for every $1 spent in sponsorship, the sponsor receives the value of $3 or $5 in return. Events and activities generally have an ROI of 2: 1. This ROI prevents sponsors from ‘cherry picking’ through a proposal, discarding benefits that are of little to no interest to the corporate agenda and thus decreasing the asking price. Page 7 of 29

Case Study Woolwich Dairy Golf Classic Event Owner: Family Transition Place (FTP), a not-for-profit organization which assists women and children who are suffering from abuse. Page 8 of 29

Event Background n n The Family Transition Golf Classic has been held for 3 years at a variety of sites in Dufferin County. The event has traditionally been operated at approximately 80% participation rates. Included in the event is an 18 -hole shotgun golf tournament, a boxed lunch, a dinner following the golf and a silent auction. The annual net profit from the event is approximately $15, 000 $20, 000 annually. The event is operated by 6 staff and 20 volunteers with the staff running the golf event and the volunteers helping with the golf event and running the silent auction. In order to increase revenue, FTP wanted to attract a sponsorship agency or sponsorship individual to assist the organization with securing event sponsorship. PSG provided pro bono services to FTP for a three year period. Page 9 of 29

PSG Sponsorship Goal, Strategy and Tactics n n PSG arbitrarily established an annual net profit target of $50, 000 for Year 1, $60, 000 for Year 2 and $80, 000 for Year 3 Strategy to achieve the sponsorship goal: 1) sell Title rights to the event; 2) develop a number of ancillary activities/events that could be titled or packaged and sold to corporate sponsors; 3) secure media partners for cash and services if possible but for services only if cash is not possible; and, 4) secure media partners prior to auditing and packaging the event. Page 10 of 29

Tactics n Develop additional activities and events that could be sold. n Develop a rate card that illustrates the valuation of assets. n n Develop a full event audit that justifies the sponsorship fee, based upon a solid return on investment (ROI). Review participant list from previous events in order to help create a new prospect list. Involve Board members in the creation of a prospect list. Sell all sponsorships for a three-year term based upon performance criteria of full participation, achieving net profit goal, and survey analysis to illustrate sponsor name retention. Page 11 of 29

Key Facts Dufferin County has a population of 54, 436 (2006) occupying an area of 359, 812 acres. Orangeville is the largest town in Dufferin County and acts as the administrative centre for the County. Orangeville has a population of 28, 000 with 9, 636 households and acts primarily as a bedroom community for the Toronto area which is a 60 minutes drive from Orangeville has a number of manufacturing plants focused primarily in the automotive category. Billboard on Highway #9 west of Orangeville has a rate card of $840. 00 per month and a discount value of $750. 00 per month or $25. 00 per day ($750 ÷ 30 days = $25. 00). Daily traffic east and west bound is 8, 325. Daily billboard value is 2, 500 cents ÷ 8, 325 = $0. 3003003 cents x 10% media value or $0. 03 per impression. Page 12 of 29

Key Facts Continued…. . FTP An average of 8, 000 women, children and men use the services of Family Transition Place annually. 143 women and 96 children stayed in emergency shelter (2007). 871 women and 32 children received counselling, legal and transitional support (2007). 3, 239 callers received crisis support and information. 75% of high school students report being sexually harassed at school. 1 in 5 students are victims of major physical aggressions; 1 in 2 verbal aggressions. three 14 year old area high school students were charged with assault and criminal harassment after 4 months of bullying (2007). In September 2005, 11 requests for violence prevention workshops delivered by FTP were turned down because FTP lacked the resources to deliver the sessions. In 2007 a total of 3, 954 students attended FTP Youth Programs highlighting gender stereotyping, teen relationship: abuse prevention (TR: AP) and Go Grrls. Page 13 of 29

Audit of Assetsof Asset Number Unit Value % of Audience Total Value Description Impressions roadway signage (vehicular and pedestrian) pixel board sign at 1 st St. and Broadway – duration 4 weeks 6, 000 daily x 7 days x 4 weeks = 168, 000 $0. 03 25% 1, 260. 00 Temporary banner (vehicular) On-building banner 10’ x 3’ – duration 8 weeks 800 daily x 7 days x 8 weeks = 44, 800 $0. 03 20% 268. 80 Town hall backlit sign (vehicular and pedestrian) Rotating sign at Town Hall – 2 hours daily for 21 days (veh 300/hr, ped 150/hr) Vehicular = 600 Pedestrian = 300 Total of 900 daily $0. 03 Average of 40% 226. 80 Golf course sign Pixel board sign 5’ x 5’ – 2 weeks prior to event – hwy #124 12, 000 daily x 14 days for total of 168, 000 impressions $0. 03 25% 1, 260. 00 On-site signage 10 signs around course (1 week prior) 1, 000 daily x 7 days x 10 signs = 70, 000 $0. 03 75% 1, 575. 00 Web site Home page and email blast to donors, event participants, media Hits 30, 000 (6 months), email blast total of 3, 000 $0. 02 20% for web = $120. 00, 80% for email blast = $48. 00 168. 00 Page 14 of 29

Audit of Assets Continued…. . Asset Description Number of Unit Value Impressions % of Audience Total Value Advertising - radio 3 week campaign – 20 rotating ads per day – on-site promos during event – follow-up ads thanking sponsors Paid value of $20, 000, in-kind value of $40, 000 @ 10% of overall cash and in-kind value = $6, 000 Rate card 6, 000. 00 print 4 week campaign in The Banner with editorial and ads – one ¼ page ad per week, 3 half page ads in In The Hills Paid value of $1, 500, in-kind value of $6, 000 @10% of overall cash and inkind value = $750. 00 In the Hill value of $3, 000 @ 10% of overall cash and inkind value = $300 Rate card 1, 050. 00 Page 15 of 29

Audit of Assets Continued…. . Asset Description Number of Impressions Unit Value % of Audience Street flags/banners 4 week campaign with 30 flags/banners in Orangeville 10 , 000 vehicles/pedestrian per day x 7 days x 4 weeks = 280, 000 $0. 03 60% 3 rd party Sponsor tagged advertising Assume value of $30, 000 @ 10% of value = $3, 000 newsletter Distribution to donors, sponsors, media, government, schools, health care clinics, hospitals, police, lawyers, 4 annually for total of 40, 000 Total Value 5, 040. 00 3, 000. 00 $0. 02 20% 160. 00 Page 16 of 29

Audit of Assets Continued…. . Asset Description Number of Impressions Unit Value % of Audience brochure School brochure 1, 000 $0. 03 30% 9. 00 poster Event poster distributed throughout Orangeville, Mono, Bellfountain, Grand Valley, Bolton, Caledon, 4 wks prior 200 posters x 4 weeks x 2, 000 /wk = 1, 600, 000 $0. 01 20% 3, 200. 00 press conference To be held at Town Hall press kit Total Value Intangible value Page 17 of 29

Audit of Assets Continued…. . Asset Description Number of Impressions Unit Value % of Total Audience Value press releases Intangible value hats/t-shirts/bags Hats and logoed golf balls Total of 600 items $0. 02 80% 9. 60 VIP services Valet parking, bag pickup, sleeve of balls 144 participants $2. 00 90% 259. 20 Total Tangible Assets 23, 486. 40 Page 18 of 29

Intangible Assets n n 1. 2. 3. n 1. n Criteria Score (1 -10, 1 is low) Rights and Privileges 3 Use of logo/wordmark Category exclusivity Product display Brand Linkage 4 Leading edge, prestige of property Quality of Experience 5 Signage, advertising, access to database Hospitality, ID in media buy Strength of Market Position 8 Leadership, efficiency Level of customer satisfaction Service failure rates Community Involvement 8 Ability to attract users, retain staff Total 28 Weighting 20 Total 60 10 40 35 175 20 160 15 120 100 555 Page 19 of 29

Summary n 1. 2. 3. n n n Intangible assets are graded on the following scale Totals of 750 + receive a score of 50% Totals of 600 – 750 receive a score of 40% Totals of 500 – 600 receive a score of 30% Value of Tangible Assets Value of Intangible Assets 40% of $23, 486. 40 Total Value of Tangible & Intangible Assets $23, 486. 40 $ 9, 394. 56 $32, 880. 96 ROI of 2: 1 demonstrates a fee of $16, 440. 48 Recommended Title Rights Fee $20, 000. 00 Page 20 of 29

Case Study – n n n Trans. Alta Tri Leisure Centre In 2002, Trans. Alta – Alberta energy provider – purchased Naming Rights to the Tri Leisure Centre for $1. 5 million over 10 -years Renewal to be undertaken in 2012 Audit completed in August, 2011 found an annual value of $577, 000 ROI of 3: 1 offered or sponsorship fee of $190, 000 annually for a total of $1. 9 million over a 10 year term Secondary Naming Rights opportunities were identified within the facility – aquatic centre, ice pads, fitness centre, gyms, and these facilities were awarded a value equal to the percentage of usage, e. g. , the fitness centre had 22% of the overall usage of the Tri Leisure Centre, therefore creating a annual Naming Rights fee of 22% of the overall annual fee of $190, 000. Page 21 of 29

Summary of Naming Rights Values n Signage – external $227, 774. 15 n Signage – internal $167, 841. 07 n Communications Material $ 5, 945. 65 n Advertising $ 6, 500. 00 n Special Events/Third Party $ 4, 596. 00 n Total Tangible Assets $412, 656. 87 n Total Intangible Assets @ 40% of Tangible Assets $165, 062. 75 n Total Naming Rights Value $577, 719. 62 n Return on Investment of 3: 1 $192, 573. 21 n Recommended Total Annual Naming Rights Fee $190, 000. 00 Page 22 of 29

Sample Audit – External Signage TLC Asset Description Traffic Vehicular – northbound 3, 876, 300 $0. 02 60% 46, 515. 60 Vehicular southbound 3, 960, 615 $0. 02 60% 47, 527. 38 On-building 7, 836, 915 $0. 02 20% 31, 347, 66 North and south bound 12, 500 $0. 02 80% 200. 00 On-building 12, 500 $0. 02 80% 200. 00 Traffic – pedestrian # of Impressions Cost per Impression % of Audience Total Value Freestanding Message board 2, 023, 143 $0. 02 15% 6, 069. 43 On-vehicle TLC truck 1, 000 $0. 02 10% 2, 000. 00 On-vehicle Zamboni 515, 502 $0. 02 30% 3, 093. 01 Page 23 of 29

Sample Audit – external signage TLC - Continued Asset Description Parking lot Electronic Highway #16 # of Impressions Cost per Impression % of Audience Total Value 809, 257 $0. 02 30% 4, 855. 54 Eastbound – 17, 220 daily 6, 285, 300 $0. 01 10% 6, 285. 30 Highway # 16 Westbound– 17, 210 daily 6, 281, 650 $0. 01 10% 6, 281. 65 Highway – 16 A Eastbound – 12, 350 daily 4, 507, 750 $0. 01 10% 4, 507. 75 Highway – 16 A Westbound– 13, 322 daily 4, 862, 530 $0. 01 10% 4, 862. 53 Reader board 16 A - loop 901, 550 $0. 02 30% 5, 409. 30 Page 24 of 29

Sample Audit – external signage TLC - Continued Asset Description Reader board Zone 3 Acheson Flags and banners 2, 023, 143 Total # of Impressions Cost per Impression % of Audience Total Value 328, 500 $0. 02 30% 1, 971. 00 28, 324, 002 $0. 02 10% 56, 648. 00 $227, 774. 15 Page 25 of 29

Methodology to Determine Key Values In determining the value of external signage, a ‘typical’ Trans. Alta Tri Leisure Centre sign has been compared to the Pattison Outdoor signage reduced rate card of $1, 400 per billboard (regular cost of $2, 800 per month). A per unit cost of $0. 02 can be determined - $1, 400 reduced rate card rate/30 days or $46. 67 per day (4, 667 cents per day) divided by 19, 420 vehicles per day = $0. 24 per day per vehicle with the TLC brand message receiving the standard media equivalency of 10% of the overall value ($0. 24 x 10% ) or $0. 02 per impressions for brand visibility. For all advertising, use 10% of the overall media buy as the sponsorship value. For example, if the media buy is $100, 000 the value to the sponsor is $10, 000 or 10% of the total buy. Determine which asset is the key component, develop a valuation methodology for that asset and compare all other assets to the key asset. For example, if external signage is the key asset and it’s value is $0. 02 per impression, a poster would be $0. 01. You don’t have to vary the price per impression too much because you can vary the % of audience seeing that asset. Page 26 of 29

Canadian Mental Health Commission – Partners for Mental Health Canadian Mental Health Commission established by the Prime Minister in 2009 – Partners for Mental Health established by the Commission in 2010 Goal – to raise $10 million over 3 years to ‘fund’ a social change strategy regarding mental health Sponsorship Strategy – acquire four (4) Anchor Partners at $2. 5 million each to fund a social movement strategy called “Not Myself Today” Tactics – national campaign with shared experience (everyone has had a day when they don’t quite feel like themselves (Not Myself Today – NMT) Sign a pledge affirming the importance of mental health to them, their loved ones and their country with the goal of mobilizing 100, 000 Canadians in year one (2012) Page 27 of 29

Day of Action n n n Day of Action to focus on mental health, to acknowledge that dealing with NMT is dealing with mental health and mental illness, to demonstrate compassion and solidarity for those who know mental illness firsthand, to learn about mental health and mental illness and to create an annual mental health day Three phases over a six-week timeframe Pre NMT - comprised of advertising, campaign promotions, direct Marketing/Outreach, mobilizing pledges, make a donation On NMT - workplace and campus events, media events and programming, legislature events, mobilizing pledges Post NMT – announce results, campaign close communications, deliver pledge to government tied to national mental health strategy launch The Anchor Partners will receive: n Prominent involvement in the launch campaign of NMT n Involvement in a least two (2) high-profile marketing campaigns each year, including at least one (1) major annual fundraising event of a national scope, at which they will have significant name presence n Continuing presence in all ongoing activities, including customer relationship management, the website and social media Page 28 of 29

Cost and Benefits n n Cost: $600, 000 annually for 3 years plus in-kind support through Hockey Night in Canada, CFL and integration into activities and events such as Photography Festival, Nuit Blanche, national junior hockey programs, etc. Benefits: n Paid media (an estimated $750, 000 buy each year, expected to deliver at 2: 1, including online, print, direct marketing and other collateral) expected to reach 12 million Canadians n 30 -second PSAs in Cineplex and Empire theatres for the NMT launch – enabling movie-goers to receive points for signing the NMT pledge n Media relations targeting major news outlets n Social and online media n Contests, promotional activities and merchandise Page 29 of 29