It’s nearly impossible to host a serious hackathon without money. That said, landing quality sponsorship is manageable if you break the process into small steps and give yourself plenty of lead time. The more practice you get approaching and negotiating with potential backers, the better you’ll become at the art of fundraising.
With the right communication and target, you can expect a lot of positive response from the sponsors' side even for a digital hackathon. However, be diligent to communicate with your sponsors at every step of the process. Explain to them the reasons for making your event digital, outline how you will support them throughout the event, and let them know about the success at other digital events.
One thing to keep in mind as you work your way through this process: sponsors are like investors — they want to see you’re serious before they give you capital. In the same way, you wouldn’t approach a VC without a product prototype, don’t reach out to sponsors until you’ve got evidence that your hackathon is well on its way to happening: a confirmed date and time, pre-registrations from students, etc.