Fundraising Ideas That Work

How to raise $500 to $5000 quickly for your school, church, sports, or public service charity.

 

 

Selling goods or services as a fundraiser

Philip Copitch, Ph.D.
(CC) FundraisingIdeasThatWork.com
 

I believe it was comedian George Carlin who first pointed out that, your stuff is considered crap by others. I know it is true in my living room. If one of my kids leaves their homework stuff strewn out all over the couch, I am tempted to say, “Whose crap is on the couch!”

Truth be told, when it comes to the stuff your non-profit sells, the potential donor/buyer may think to themselves… “Who needs this crap?”

For the charity, selling stuff like candy, gift wrap, or calendars, is a tough process. From the fundraiser’s point of view, “My cause is so good who wouldn’t buy from us?” From the donor/buyer’s point of view, “Another charity with its hand out.”

The problem is usually in the math

For a charity to make any money selling, let’s say - candy bars, it has to buy candy bars from a retailer first, and then sell them to a customer. At first glance this seems easy - almost everyone gives into the temptation of candy bars. Stores sell millions of dollars worth of candy every month, why can’t your organization get a small piece of that pie?

Most people, outside of sales, do not understand that the profit margin on a candy bar is small. A store has the infrastructure to hold its inventory and sell it when a willing customer wants to buy it. Over the course of a year, candy bar sales can add up to a nice piece of income for a store. But, your organization is not a store.

In this section we are going to look at the realities of selling goods and services for a nonprofit.

Is it legal

Most places allow for groups to sell things with just a few restrictions. That being said, your group still has to report, and pay taxes on, the income according to the type of non-profit you are. (See IRS regulations for non-profits.)

There are some restricted items such as tobacco, alcohol, gaming, and firearms. Special permits are needed to sell these types of items.

Is your group a good fit for selling goods or services?

Almost any nonprofit can add sales to their income stream. Back of room  sales are very good for events. When I speak at a charity event, I often sell my books. The charity gets the “bookstore” profit of 35% that would typically go to the store that sells the book. This is good for the charity because there is no upfront cost, and it is good for the attendees that may want a copy of one of my titles.

Selling goods or services is not much of a community builder for most charities, but it is often a good way for them to make money.

Sales is work and not everyone is cut out for it. One school I know sold magazines in the fall and Easter candy in spring. Each child was asked to take a shinny printed brochure and sign-up sheet and ask everyone they knew to help out. What really happened is that the parent needed to be highly involved. A few motivated parents, with access to coworkers or extended family, were able to get lots of orders, while other kids got orders just from their parents. One mom told me that she emailed and asked everyone she knew on Facebook, which led to lots of orders. The problems started for her a few weeks later when everyone she had contacted, now “expected me to buy from their child’s school fundraiser. I just couldn’t do it, and I felt terrible.”

Does your group have…

The space to store, organize and secure a goods fundraiser.

A network of sales people, the more the better, that will give of themselves to ask everyone they know to buy from your group.

In-house expertise to organize a sales force of inexperienced workers with kind support and solid organization skills.

Community support to help with the fundraiser. Maybe someone to donate needed space, or a sponsor to help offset the upfront cost, in exchange for their company name aligned with your organization.

What about companies that help schools or churches sell stuff?

There are companies, in fact lots, that sell items at wholesale to charities for their fundraising sales. These companies specialize in packing stuff to make it easier for your organization to re-sell (retail). But, this help comes at a cost.

You have to do your homework. The fundraiser company will have experience selling and will have nice looking fliers and forms to help you sell, but all that stuff and support is included in your item cost. This is why many charities have to sell candy, cookie dough, or Christmas wrapping paper at higher prices than can be found in local stores. Many donors think the higher price difference is money that goes to the organization, but often it does not.

One soccer coach told me, “We had to buy 10 cases of candy bars to start. I put it on my credit card figuring the fundraiser would be over in about a month. Selling candy bars at movie theater prices was hard. Most parents ended up buying about half of their kids’ candy themselves. A lot of ill will came out of that fundraiser. One parent gave most of her child’s candy bars back. They melted in her car and she couldn't afford to pay for them.”

For many, using a sales program gives them the support they need. The sales materials, organizational support, and proven track record help to get the fundraiser off and running. Just make sure that your group will be able to sell enough of the product to make it worth the time, trouble, and unexpected hiccups.

I personally like Fundraising.com. Their free guide is very helpful as a starting point.

Get your free fundraising guide volunteer group clipart

Buy product or ask for ‘in kind’ donations to resell

The basic idea behind a group selling a product to raise funds is that people like to buy from charities. All things being equal, they would rather buy a cookie from an angel faced Girl Scout than from a large chain store. But, the caveat is, people are also price conscious.

Let’s look at Girl Scout cookie sale stats according to http://www.statisticbrain.com:

First year of Girl Scout cookie sales- 1917

Annual sales revenue from Girl Scout cookies $656 million

Annual number of Girl Scout cookie boxes sold 175 million

Record for most boxes sold by a single girl (Jennifer Sharpe, age 15) 17,328

You would think that must add up to a lot of money for the troop. Well... the stats are:

Percent of sales that go to local troops 10%

Percent of sales that goes to the council 50%

That would leave 40% for the purchase of the cookies from the manufacturer. The largest chunk (50%) of the funds raised goes to the fundraising organizer (the GS council) where I assume it is used for running the nonprofit organization. Only 10% remains with the troop of angel faced girls.

This year in my office building, cookie sales were brisk. And so was the talk about the cookies. The basic conversation was about how expensive the boxes were and how few cookies were in each box.

Watch out for unsold stuff filling your garage.

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