A Dynamic Model for the Financial Sustainability of the Restoration Sponsorship

TLDR: In this article, an existing dynamic model through which it was possible to estimate the optimal annual amount to be invested in sponsorship to maximize the current value of expected profits has been analyzed, reworked and for the first time applied to an Italian company.

Abstract: The paper addresses the theme of sponsorship as the main form of public–private partnership through which to finance restoration/recovery interventions for the historical–architectural heritage. The goal is the maximization of sponsorship profitability for companies. Specifically, an existing dynamic model through which it was possible to estimate the optimal annual amount to be invested in sponsorship to maximize the current value of expected profits has been analyzed, reworked and for the first time applied to an Italian company. It was therefore assumed that the company is intent on supporting a multi-year program of sponsorship investment. It is also assumed that the corporation is a single-product company, operating in monopolistic competition and characterized by a Cobb–Douglas production function with decreasing returns to scale. The work is in continuity with a previous publication focused on the application and validation of a static model. The final goal is to provide tools for applied analysis of the financial sustainability of the sponsorship that forms incentive for companies to implement its use, facilitating the recovery of the historical–architectural heritage. Public bodies can thus benefit from the greater contribution of resources from private financiers for a zero-cost and sustainable valorization of cultural heritage.