I ran a plethora of these events at my college for developer and game developer students (Great Canadian Appathon, Global Game Jam, and numerous Microsoft-centric hackathons for WinPhone7 and Win10). The sponsorship, prizes, catering (massive food budget!), and swag was insane. All the college really contributed was the space and staff to run the 48-hour weekend events, caffeinated soap for the washrooms, and the occasional medical attention (we had a few NOS-induced nosebleeds the year Coca-Cola was one of the sponsors).
But what was developed during these intense hackathons was nothing short of spectacular, and the collaborative skill-building was massive. I still hear from former students who attended them during that time that they consider them as one of the best experiences of their lives.