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Monday, January 6, 2014

Turning donors in to customers: The product sale fundraiser

By Alan Rosinski

Fundraiser competition is influenced by the effectiveness of the campaign
Donor customers increase fundraising success

Fundraising for church groups and schools is never easy and in difficult economic times it’s harder still. Across the US donations to charity groups have seen a significant drop, with some charity groups and projects going under just as frequently as big well-known commercial groups. To add to the problem, the number of people depending on charities has risen rapidly. While many people are keen to support a local school or church, the fact is that with incomes stretched they simply cannot always afford to.  

One area of fundraising that has had a mixed press in the past is the product sales variety. This can range from humble cookie stalls to full scale catalogues. Despite being considered, by some, to be at the less positive end of charitable fund raising activities, these remain popular and generate an estimate $1.5 billion dollars per year for good causes. Yes, that was a ‘b’. 

Given that household budgets are tight this may seem the worst time to run this kind of fundraising scheme; however, these techniques can actually work more effectively in this type of economic climate. Donors become “customers” – getting something in return for helping your good cause – which can make the transaction more attractive.  

Creating profits for charity

With over two thousand product fundraising firms operating in Canada and the US it’s clear that this model of fundraising is pretty big business. For any group it can be an incredibly effective way of raising funds over the short term – for specific goals – or on a longer term basis to provide additional funds for regular activities. At one time product sale fundraising was largely dominated by gift wrap sales and cookie or candy sales. Today, as the industry expands, catalogue sales are another popular and growing branch. Other single item products such as the logo magnets are also joining the market. Logo magnets and similar products, are suitable, in particular, for schools and sports teams and have the added benefit that they raise your school or team’s profile and can act as advertising in the future! Other popular products that can be customised with your group’s logo include t-shirts, mugs and key-rings. These products are all equally good though are often best suited to one off fundraising events for a specific project.  

Dealing with product providers

Various different product fundraising providers work in different ways. Some allow for you to set the price of the item or items in question for yourself. This gives you control over how much profit you can make during each campaign. This is probably the best method to employ with products such as logo car magnets, mug etc. Catalogue fundraising works in a slightly different way and choosing the right firm to work with is an essential part of the decision that your group will need to make. In general, catalogues will offer a wide range of products that people actually want or need. This is part of the secret to the success of this type of fundraising. Most firms will offer a dedicated sales rep for your group – this puts some people off as it can feel too commercial and also many may distrust the term sales rep! However, these representatives usually have a commission element to their salaries and your success is in their interests; you are after all both hoping to raise money!

Choosing the right provider

Where your takings are represented by a percentage then you’ll have to decide between a large number of companies offering different rates. Typical rates are 40 – 50 per cent; most of us will choose the higher percentage rate, eager to make the best return. However, successful product fundraising requires some thought on this matter. Factors to consider should include the product ranges, prices to the customer and the quality of products. High quality products (with a lower percentage share) at a good price are likely to sell more effectively than lower quality products (with a higher percentage share). Quality is important when selling for charitable causes; even for a well-supported school or church, ‘customers’ may be less willing to purchase from you if you’ve supplied products that are low quality in the past. While this mainly applies to product catalogues it’s also the case with one off sales of items like logo car magnets or mugs and key-rings.

Positive transactions

While it may seem an overly commercial way of raising funds, product sale fundraising can be extremely effective and lucrative. Given that your ‘customers’ not only get the opportunity to support your group or school, but also get something that they want or need in return, this should be no surprise. For schools, churches and charities, this kind of fundraising can make a real, long term difference to your sources of funding and ability to continue to provide your services.

About the author: Writer Alan Rosinski takes a look at how product fundraising can be one of the most effective types of charity fundraising, especially in difficult economic times.  

Image license: Howard Lake, Creative Commons